Further Information and Useful Terms

Buying a home can seem like a complex and daunting endeavour.

By doing your research, however, and by becoming familiar with the terms used in the industry, you can help set yourself up for success.

There are a number of resources available should you need to carry out more research on the road to buying your home.

Visit any of the below to discover detailed advice on each of steps, what to expect and how best to prepare.

Understanding the language used by professionals working in property can simplify the process, and help put your mind at ease.

The following are some legal and technical terms you may come across when buying your home:

APR: This is short for Annual Percentage Rate. APR is the total cost of your mortgage over its term, taking into account both interest rate charged and other fees, as well as whether interest is charged monthly or quarterly.

Booking Deposit: An initial payment made by a buyer to the seller’s estate agent, showing your commitment to buying the property, and is usually refundable until the formal contracts are exchanged.

Bridging Loan: A short-term loan used to finance the purchase of a property before the sale of your existing property, providing temporary financial cover during this interim period.

Caveat Emptor: This is a Latin phrase meaning “let the buyer beware”. It is a term sometimes used in property transactions since it describes the principle that as a buyer you buy on notice of the physical state, condition and repair of the property. The seller cannot mislead the buyer or act fraudulently but, short of this, it is up to the buyer to satisfy themselves that the property is sound and fit for purpose.

Collateral: Title deeds of your new property given as security against the repayment of the mortgage.

Closing Date: The date arranged for the final legal transfer of the property when the remaining balance is paid to the seller, the buyer receives the keys to the property and all legal formalities are completed.

Common Areas: In a “multi-unit development” (MUD) individual property “units” share a range of facilities, known as common areas. Common areas may include: structural parts of apartment/duplex blocks; lobby areas; car parking; stairwells/lifts; and garden or recreational areas.

Contract of Sale: The written legal agreement between the vendor, known as the seller, and the purchaser, known as the buyer, with regard to the property. When exchanged these agreements are legally binding for the sale and purchase of the property at an agreed price with a fixed completion date.

Conveyance: The transfer of ownership of property; the instrument effecting the transfer.

Conveyancing: The term used to describe the legal process of buying and selling property. It involves the legal transfer of the title and ownership rights of a property from the existing owner to the new owner of the property.

Covenants: Legally binding promises or conditions written into a property’s deeds or contract. They can impose restrictions or obligations regarding the use or maintenance of the property and are enforceable on the property owner, often affecting future transfers or changes to the property.

Deeds: Legal documents which confirm the owner’s legal entitlement to the property.

Deed of Transfer: A deed which transfers ownership of a property.

Deposit: This is normally paid in two parts. A booking deposit to the estate agent, which is refundable, and a contract deposit, both usually making up a total of 10% of the contract price.

Easement: A legal right allowing someone to use another person’s land for a specific purpose, such as access or utilities. It grants a non-owner limited rights over the property and is usually documented in the property’s deeds, binding successive owners.

Exchange of Contracts: When both the buyer and the seller sign the contract and the deposit has been paid and the Contract is exchanged. It is at this moment that both parties are legally bound by the transaction.

Family Home Protection Act, 1976: Every conveyance of residential property must comply with the provisions of the Family Home Protection Act, 1976. Consent of the spouse of a seller must be obtained and evidenced in writing for the sale of a family home owned by one spouse to avoid a conveyance been declared null and void. This matter will normally be covered by your solicitor as part of the conveyancing process and what is known as a 'Family Home Protection Act Declaration' may be needed.

Fixed Rate Mortgage: A type of home loan where the interest rate remains constant for a specified period, ensuring predictable monthly payments. This provides stability against interest rate fluctuations but might result in higher or lower costs compared to variable rate mortgages over time.

Freehold: The outright ownership of a property and the land on which it stands. The owner has complete control over the property, subject to legal regulations, and is responsible for its maintenance and any changes made to it. An interest in land being either a fee simple, a fee tail or a life estate. A fee simple is the largest estate in land where ownership is absolute.

Ground Rent: Rent paid by a tenant where the tenant has built the buildings and the landlord has provided the ground only and the amount reserved reflects that e.g. €12 per year; €25 per year.

Indemnity Bond: An insurance bond taken out by the lender as additional security, depending on the size of the loan.

Land Registry: A government department which keeps records of ownership of most land and property in the State. The Registry of Deeds is a similar government body where unregistered properties are registered, normally in cities.

Land Registry Fee: A charge payable to Tailte Éireann for registering a property transaction with the Land Registry. This fee is for recording the change in property ownership or any interest in the property, ensuring the details are updated on the public register. The fee varies depending on the property’s value and the type of transaction, such as first-time registration or transfer of ownership.[DM1]

Leasehold: A property tenure where the buyer owns the property, usually a building or part of a building, for a set period but not the land it stands on. The land is owned by the freeholder, to whom the leaseholder typically pays ground rent.

Legal Practitioner: A person who is a practising solicitor or a practising barrister.

Lessee: The person to whom a lease is granted.

Lessor: The person who grants a lease.

Mortgage: A loan against the security of a property.

Mortgage Approval in Principle (AIP): A statement from potential lenders on how much they are prepared to lend you (i.e. what you can afford when looking for a property).

Mortgage Approval: A statement from prospective lenders indicating the lender has agreed to lend you a specified amount.

Mortgagee: The lender - the financial institution which lends the money secured by mortgage.

Mortgagor: The borrower - the person who borrows money and whose property secures the loan.

Mortgage Protection Insurance: This is insurance that will pay off your mortgage if you die during the term of the policy.

Multi-Unit Development: A form of residential accommodation such as a house, an apartment or duplex in which individual property “units” share a range of facilities, known as common areas.

Party Wall: A shared wall or structure between two adjoining properties, typically situated on the boundary line. It is owned jointly by the property owners on either side, and any alterations or repairs to the wall may require mutual agreement and adherence to legal regulations.

Principal: The amount of the mortgage on which interest is calculated.

Private Treaty Contract: A contract that is negotiated outside an auction.

Probate: A grant of probate is made by the Probate Office (in the Courts Service) to allow the executor (the personal representative) of a deceased person to deal with the estate of the deceased person and to distribute their property to those who have inherited it.

Registered Property: A property is described as “registered” when its title or ownership is registered with the Land Registry (managed by Tailte Éireann) and the original title documents are retained by Tailte Éireann and permanently filed.

Rights of Way: A right of way allows you to travel over land that belongs to someone else. There are 2 types of right of way, a public right of way and a private right of way. There may be limits on how you can use a right of way.

Search: A legal investigation to establish what mortgages or judgements effect the property being bought and/or seller and buyer. There is a cost to you in procuring these searches.

Stamp Duty: A tax paid on the transfer of property, calculated as a percentage of the property’s purchase price or market value. The rate varies depending on the type of property (residential or commercial) and its value. Payment of Stamp Duty is required for the legal recognition of a change in property ownership in government records. It’s a key cost in the property-buying process. This is a cost that must be funded by a buyer ahead of the completion of the sale.

Subject to Contract: Generally, an offer or acceptance made subject to contract means that no legally binding agreement or contract will exist until the formal contract has been completed by the parties. There may be a binding contract if the court can conclude that all the terms of a bargain have been agreed and set down in writing.

Title: The legal right to own, use, and dispose of property. It signifies ownership and is evidenced by title deeds or registration. Ensuring clear and undisputed title is crucial in property transactions to confirm the seller’s right to sell and transfer ownership.

Undertaking: A solemn promise or pledge by a solicitor to a third party. It is a promise given with the consent and authority of a client to do something or give something at a date in the future. For example, your solicitor will normally call up the title deeds of the property you are buying with an undertaken into the vendor's mortgagee that they will discharge any remaining balance on the mortgage out of the proceeds of the sale and/or will make an undertaking to the purchaser's mortgagee to register the mortgage with Land Registry following the sale.

Unregistered Property: Unregistered property is property where the title has not been registered with the Land Registry. In this case, title deeds relating to the property will be registered in the Registry of Deeds and proof of ownership of the property is dependent on possession of the deeds.

Value Added Tax (VAT): VAT is a tax on consumer spending. It is charged and collected by businesses registered for VAT on their provision of goods and services. Presently, VAT is applied to new homes, whereas second-hand residential homes are exempt from this tax.