Jargon Buster

Agreement in principle (AIP) - This is an indication of how much a bank or building society will lend. The AIP will take account of the applicants monthly income and out goings and is based solely on the information provided

Assignment - This is the term used with you sell your flat, because you sell (or ‘assign’) the remaining years on your lease. The new leaseholder is the assignee.

Block/building - The building, as described in your lease, in which your flat is situated. It is usually shown on a plan attached to the lease.

Communal areas - The parts of the building that can be used by all residents such as stairs, lifts, paths, communal gardens.

Completion - This occurs when the solicitors from both sides complete the transaction on behalf of the buyer and seller. All documents, money, etc are handed over and the purchaser becomes the legal owner of the property.

Covenant - A covenant is a condition or rule in your lease.

Estate - The estate includes your flat and building, as well as other land and buildings. The boundary of the estate is shown on a plan attached to your lease.

Exchange of contracts - This is the point in the transaction when the purchaser and the seller agree to sign contracts prepared by the solicitors. The contract is legally binding and if either party pulls out after exchange of contracts substantial penalties will be imposed.

Fixtures - You are responsible for the fixtures and fittings in your flat. This includes kitchen units, the bathroom, light fittings and any central heating system.

Forfeiture - If you break (or ‘breach’) any of the conditions of you lease, Sentinel can apply to court to end your lease and repossess your property.

Freehold - Absolute ownership of the property and the land on which it stands

Home information Pack (HIP) - Prior to a property being offered for sale key information will be made available to purchasers enabling them to be better prepared and therefore better informed to make decisions. It will be the responsibility of the seller to pay for and make the report available to prospective purchasers.

Landlord - The business or person who owns the freehold of a property and grants a tenancy or lease to a tenant or leaseholder.

Lease - The lease is a contract that explains the responsibilities of Sentinel and of the leaseholder.

Leasehold - Ownership of a property for a set period of time

Leaseholder - The person(s) who has been granted the lease; also called the tenant some legal documents.

Lodger - This is someone who lives with you as part of the household i.e the owner remains in his or her home. All leaseholders have the right to take in a lodger and do not normally need our permission.

Mortgagee - This is the mortgage lender that gave you the money to buy your property.

Mortgage - This is a clause in shared ownership leases that gives protection assurance to the mortgage lender that money borrowed on the mortgage will be protected if the leaseholder does not pay.

Resale - This is a shared ownership property that was built and sold in the past but is now available to buy on part buy part rent basis because the existing owners want to sell.

Service Charge - This is a payment by a leaseholder to a freeholder in return for services the freeholder provides.

Sinking/Reserve Fund - This is a charge made in addition to the service charge for future repairs on the building. This is a separate fund that all leaseholders contribute to, so that they do not get one large bill when any major repairs are needed for the buildings common areas. It is only an estimate and future works may turn out to be more or less than in the fund. If it is more the leaseholders will be responsible for the shortfall if it is less it stays in the fund for future works.

Sublet - This means granting a tenancy of the whole or part of your property for an indefinate period of time. Your lease does not allow subletting, as it can cause management difficulties if conditions in the lease need to be enforced.