FAQ's and Jargon Busting the property industry

It can be a little overwhelming choosing the right property survey, so we created this handy guide, to help you decide which survey is best for your property and circumstances.

A Building Survey (previously known as a full Structural Survey) is a wide-ranging inspection of a property, dealing with hard to reach places and structural issues.

It is the most comprehensive of the surveys available for residential properties and provides a detailed evaluation of the condition of a property. Although one of the more expensive options of survey available, the level of detail in the final report makes it vital, especially when buying older properties.

The Reinstatement Cost (also known as rebuild cost or building sum insured) of your home, is the amount it would cost to completely rebuild the property from scratch if it were totally destroyed, by a fire for example. It is required for building insurance applications and is the amount of money for which your home is insured in case of total loss.

It includes costs of clearing the site, materials, labour and professional fees. It is not the same as the value of your home. Reinstatement costs are for an accurate reconstruction of your property whereas market value is simply what the property is worth as a whole finished product.

Market rent value is the amount of money a property would rent or lease for if it was available at a specific time.

It is an experts judgement based on knowledge, appraisal, intuition and comparison of the local rental market to discern a fair rental value for a property in the same condition in the same area.

A Condition report or Home condition report (HCR) is generally suitable for smaller and newer properties and serves as a valuable “MOT” for homeowners looking to assess the general condition of their home. It should be used for a conventional house, flat or bungalow built from common building materials which is in reasonable condition.

This report provides a succinct overview of a residential property and focuses purely on the condition of the property by giving ratings to the different parts of the building and flagging up any areas that need attention. It is a basic ‘traffic light’ survey.

An Expert Witness Report is a document setting out the opinion of an expert on matters within their area of skill, experience and knowledge. The report provides independent, impartial and unbiased evidence to a court or tribunal.

The ultimate use of the report is to inform the court of law on matters in which it has no expertise itself, to help reach a decision in order to resolve a dispute.

At Arnold & Baldwin we have a fantastic team of experts with experience in both representing claimants and defending the professionals within the property surveying world. Please contact us today to assess our expertise in your specific area.

A vesting order is a court order that creates or transfers legal ownership of a property instead of a legal conveyance (the act of transferring an ownership interest in property from one party to another). It is discretionary and results from a finding by a court that fairness demands that the court act in a way to transfer property from one party to another.

The First Tier Tribunal is part of the court system in the United Kingdom.

The First Tier Tribunal (Property Chamber) has 5 regional offices throughout England that deal with settling disputes in relation to leasehold property and the private rented sector.

Tribunal hearings are quite informal, you can state your own case or have a friend or professional speak for you. The tribunal normally sits as a panel of 3 consisting of one legally trained member, one surveyor and one lay (ordinary) person to provide a balanced view.

The panel have control over the court hearing and decide the order in which things are dealt with.

Leasehold means that you own the property, but the land upon which the property is built is owned by the freeholder (or landlord). This gives you the right to occupy the property for as long as the lease is valid.

A leasehold or freehold enfranchisement (also known as a collective enfranchisement) is the right for the owners of the flats in a building and sometimes part of a building, to join together and buy the freehold of that building or an extended lease of their premises.

Marriage value is applicable to leasehold properties. It is the increase in value of the property following the completion of a lease extension or collective enfranchisement, reflecting the increased market value of the longer lease.

Under the Landlord and Tenant Act 1987 leaseholders can acquire the freehold of their building where a landlord is in consistent breach of their management obligations over a long period of time.

This is obtained by application to the County Court for a compulsory acquisition order. The right to acquire the freehold via an acquisition order is only given to qualifying tenants - those under a long lease which was originally granted for a term of more than 21 years.

An expert witness report is used to inform a court of law on matters that are outside its expertise. An expert’s opinion is set out in a report as instructed by the court and is used to help reach a decision in order to resolve the dispute before it.

Property litigation is a field of law that deals with disputes relating to all kinds of property. It typically involves settling any disputes between property owners and their tenants and also includes a wide range of other matters involving the ownership of residential, commercial, industrial and agricultural property.

A market rent review clause is a provision within a lease to enable changes to the rent at regular intervals during the term of the lease to reflect the market value of the property.

A Freehold is the complete ownership of a piece of land and all immovable structures built on it. If you buy a freehold, you’re responsible for maintaining your property and land, so you’ll need to budget for both these costs. Most houses are freehold but some might be leasehold, usually through share-ownership schemes.

A participation agreement is a contract between all the leaseholders of a property participating together in the joint purchase of their freehold and it provides a legal basis for the action.

A Section 42 Notice (also known as a Tenant’s Notice) is served on the landlord/freeholder of a property and starts the purchase of the freehold or lease extension process. Once a valuation of the property has been carried out by your surveyor they will send the valuation on to your solicitor. Next, your solicitor will serve a Section 42 Notice on your landlord/freeholder advising the amount you are willing to pay for the freehold.

The First Tier Tribunal is part of the court system in the United Kingdom. The First tier tribunal (Property Chamber) has 5 regional offices throughout England that deal with settling disputes in relation to leasehold property and the private rented sector.

Put in basic terms, in this instance, it relates to which parts of the property have been transferred to you under your lease and which parts have been retained by the freeholder/landlord.

A Leasehold Enfranchisement Section 13 Notice also known as an Initial Notice, is the formal notice which, when it's sent through to your landlord/freeholder, triggers off the official statutory collective enfranchisement process.

This standard document is a landlord's counter notice under section 21 of the Leasehold Reform, Housing and Urban Development Act 1993 (LRHUDA 1993) admitting the tenants' claim to acquire the freehold. This process is sometimes referred to as a collective enfranchisement.

A homeBuyer report is the most popular Property Survey for buyers. An economic but detailed survey, suitable for most residential properties.

Leasehold means that you own the property, but the land upon which the property is built is owned by the freeholder (or landlord).

This gives you the right to occupy the property for as long as the lease is valid.

If your property is a leasehold property, you will have to pay an annual charge known as ground rent to the person who owns the freehold.

A Section 42 Notice (also known as a Tenant’s Notice) is served on the landlord/ freeholder of a property and starts the purchase of the freehold or lease extension process. Once a valuation of the property has been carried out by your surveyor they will send the valuation on to your solicitor.

Next your solicitor will serve a Section 42 Notice on your landlord/ freeholder advising the amount you are willing to pay for the freehold.

Leasehold means that you own the property, but the land upon which the property is built is owned by the freeholder (or landlord). This gives you the right to occupy the property for as long as the lease is valid.

If your property is a leasehold property you'll have to pay an annual charge, known as ground rent, to the person who owns the freehold as specified in the lease.

Capital gains tax (CGT) is payable when you sell an asset that has increased in value since you bought it. The rate varies based on a number of factors, such as your income and size of gain. For residential property it may be 18% or 28% of the gain (not the total sale price).

A non-domicile is a UK resident whose permanent home, or domicile, is outside of the UK. Key to non-dom tax status is that an individual must pay UK tax on UK earnings, but need not pay UK tax on foreign income or gains unless they bring that income back to the UK.

Whether you are securing a business loan against the value of a commercial or other premises or seeking finance to undertake a development project, a lender will require a valuation to ensure that the property they are lending against provides good security.

The purpose of having a loan valuation completed is to establish whether the amount of the loan can be secured against the value of the property and, should you default on the loan, whether the lender can realistically recoup the amount.

Whether you are selling your shared ownership property or buying further shares in it (known as staircasing), it’s important to know the true value of the 100% market value of your property so you can make informed decisions and to ensure the housing provider is demonstrating best practice. To do this you will require a RICS Market Valuation.

When selling a shared ownership property you have to offer your share of the property back to the housing association to sell on to their list of current affordable housing buyers at the property valuation price.

Our surveyors can provide your valuation quickly so you can make an informed confident decision armed with all of the facts.

Please note, often your shared ownership documentation will insist on a valuation being within 3 months of the date you go on the market or exchange contracts.

Capital gains tax (CGT) is payable when you sell an asset that has increased in value since you bought it. The rate varies based on a number of factors, such as your income and size of gain. For residential property it may be 18% or 28% of the gain (not the total sale price).

Inheritance Tax (IHT) is a tax on the estate of someone who has died, including all property, possessions and money.

A non-domicile is a UK resident whose permanent home, or domicile, is outside of the UK. Key to non-dom tax status is that an individual must pay UK tax on UK earnings, but need not pay UK tax on foreign income or gains unless they bring that income back to the UK.

Probate is the process of dealing with the estate of someone who has died - which generally means clearing their debts and distributing their assets in accordance with their will.

District Valuer Services (DVS) is the specialist property arm of the Valuation Office Agency (VOA).

They provide independent, impartial, valuation and professional property advice across the entire public sector, and where public money or public functions are involved.

Probate is the process of dealing with the estate of someone who has died - which generally means clearing their debts and distributing their assets in accordance with their will.

A non-domicile is a UK resident whose permanent home, or domicile, is outside of the UK. Key to non-dom tax status is that an individual must pay UK tax on UK earnings, but need not pay UK tax on foreign income or gains unless they bring that income back to the UK.