Preparation for September Flashcards
what does fee simple absolute in possession mean
freehold
when you own the building and the land it is built on. You can use the property how you wish, subject to legal regulations. You own the property for as long as you like
what does term of years absolute mean
leasehold
have the right to occupy or use the property for the specified time in the lease agreement but you do not own the land that the property is built on
what is severalty ownership
when you own the property by yourself
what is concurrent ownership
when you own the property with someone else
what is a deed
a legal document used to transfer ownership
what is a mortgage point
1 percent of your total loan amount . For example: on a £100,000 loan, one point would be £1,000. they are essentially pre-paid interest and for each point the borrower buys, their interest will go down
what is equity
the difference between what you owe on your mortgage and what your home is currently worth
what does LTV stand for and what does it mean
loan to value ratio
simple way to understand how much of a property’s value is being financed through a loan. Imagine you want to buy a house that costs £100,000. If you get a loan for £80,000, your LTV ratio would be 80%
why is a high LTV ratio better when investing in buy to let
gearing describes the relationship between debt (money borrowed) and equity (the borrowers own money). more money borrowed mean less money originally invested in the deposit
what does PITT stand for and what does it mean
the four unities that must apply for joint tenancy
P: possession, all tenants have the right to posses the whole property
I: Interest, they have the same interest in the property (freehold or leasehold)
T: title, their interest was acquired under the same document
T: time, their interest was acquired at the same time
why are early mortgage payments mostly interest
because the loan balance is still very high, as you pay more principal, the loan balance decreases and you owe less interest
what is a down payment
the initial payment or deposit for a house. the average first time buyer pays about 6 percent, the median is 15
what does amortization mean
the process of paying off a loan over time through regular payments
what is principal
the original amount of money borrowed to purchase the home
what is interest
the additional amount that you pay to the lender for the privilege of borrowing the money. can be fixed or variable
what is a covenant
a promise in the deed or lease
what does effluxion of time mean
the natural coming to an end of a lease at the expiry of the term
what does PITI stand for and what does it mean
represents the total monthly mortgage payment
P: principal
I: interest
T: taxes
I: Insurance
what is a lease
a contract for a specific agreed length of time
what does PESTEL stand for and what do they mean
factors that impact the real estate market
P: political
E: economic
S: sociocultural and demographic
T: technological
E: environmental
L: legal
what is a schedule of condition
a recording of the state of the property before the start of the lease
what is a schedule of dilapidations
a recording of the state of the property at the end of the lease
what is an easement
a right typically benefiting one property over another property that is owned by someone else.
dominant land, the land enjoying the benifit of the easement
serviant land, the land being burdened by the easement
Street V Mountford 1985
gives us the criteria to apply to determine whether an arrangement creates a lease
1. exclusive possession
2. certainty of term
Ashburn Anstalt V Arnold 1989
decided that rent is not an essential element of a lease although it is common
what does term mean
the period that the lease is active for
what are the four sections of a register
- property register - describes the property, along with any rights that benefit it such as an easement
- proprietorship register - displays the name(s) of the legal owners
- charges register - shows any matters affecting the property for example mortgages secured on the property and restrictive covenants that burden it
- title plan - plan of the property showing its boundaries
what are fixtures and chattels
fixtures - items which become attached to the land and form part of it
chattels - the personal belongings of the owner
useful tip for when speaking about case law»»»
legal professionals do not say “versus”. we write “buckland v butterfield” by we say “buckland AND butterfield”
what is the difference between the terms real estate and property
real estate - tangible land, it is a physical object and includes resources attached such as buildings
property - includes intangible rights connected with ownership such as rights of way and easements
what does reversion mean in relation to a lease
the landlord’s interest in the property once the lease has ended and the property reverts to the landlord
what are profits a prendre
right to take something from someone else’s land for example, to graze animals, catch fish or collect firewood
what is the definition of a mortgage
also known as a charge, it is an interest in a property granted by a borrower (the mortgagor) to a lender (the mortgagee) as security in return for a loan
does the buyer obtain a mortgage
strictly, the mortgage is the interest granted in the property in return for the loan. a buyer does not obtain a mortgage, they obtain a loan
what doe the terms FRI and IRI mean
FRI - full repairing and insuring (the tenant is responsible for repairs and insurance)
IRI - internal repairing and insuring (repairs and insurance are done for you)
what is the definition of market value
the estimated amount for which an asset or liability should exchange on the valuation date.
what does EPC stand for
energy performance certificate
GIA vs NIA
NIA - net internal area
GIA - gross internal area
NIA is the usable internal area
what is a sublease
when the tenant re-rents the property to a new third party
what are the four types of agency terms
sole selling rights (the agent gets a fee even if they didn’t introduce the buyer to the property)
sole agency
joint agency
multiple agency
what does instructing an estate agent mean
hiring their services
what is a ground lease
when the tenant is allowed to develop the property during the lease period
what is RV
rateable value
the estimated anuanl rental value of a commercial property
the energy act 2011 indicated that, from 2018, owners and agents would not be able to offer for sale or to let of a property with an energy rating of less than what value?
E
(EPC goes from A-G)
how long is an EPC valid for
10 years
