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 Residential
Letting Glossary of Terms - Jargon used in the UK
If
you have never rented or let a property before some of the words used can be rather
confusing. Listed below is a short glossary of jargon used in the UK rental market.
Agent: A letting - rent collection - management - estate
agent or other duly authorised person (or company / organisation) who is acting
on behalf of the landlord. AST:
(Assured Shorthold Tenancy). An assured shorthold tenancy is a kind of assured
tenancy, which offers the landlord a guaranteed right to repossess his/her property
at the end of the term. (See also Tenancy Agreement)
Bankers Draft: It is similar to a cheque, however the money has been debited
to your bank account and it means the person receiving this will know it is safe
money. You will normally need to give a bank in the UK 24 hours notice. You will
normally be charged an administration fee. Block
Management: Agents who act for the freeholders and leaseholds for block of
apartments and flats. Normally will organise internal cleaning, garden maintenance,
arrange the insurance and arrange re-decoration
Break Clause: Also referred to as a Release Clause. This is a clause sometimes
inserted in a fixed term tenancy, typically if the initial fixed term is for a
year or more. It will not normally be applicable during the first six months of
an Assured Shorthold Tenancy. If the initial tenancy is renewed either party will
often request a break clause if they do not know if the can continue renting or
not. A break clause will usually be worded in such a way as to allow either landlord
or tenant to give two months written notice at any stage after a particular date
or period of the tenancy, thus terminating the tenancy earlier than the end of
the original fixed term. Buy
to let: Thinking
of buying a Buy-to-let property and want to read up on the subject? Click Below 
Credit Search references: References taken up on a tenant applying for
rented accommodation. Many agents and individual landlords use an outside company
who for a fee will contact the applicant's employer, landlord and also check out
the tenant's credit history. They will be providing a report on the prospective
tenant's financial suitability. See also references. Company
let: Let to a bona fide company. Council Tax: Local authority tax for England,
Wales and Scotland. In most cases this will be the responsibility of a tenant
to pay. Covenants:
The terms of the tenancy agreement - obligations - "promises" made by either Landlord
or Tenant. Deposit: Amount of money held by the landlord or agent for security
against damage. In Britain approximately the equivalent to six week rental is
held. Direct
Debit: See section on Standing Orders Fixtures
and fittings: Items usually provided in a letting - curtains, carpets, blinds,
light fittings, kitchen units, appliances, (in the case of some lettings there
will beds, chairs, tables and other items of fixtures and fittings provided).
It is advisable to always check as to what is provided and not to assume that
items will be provided.
Gas safety regulations: The Landlord of a rented property must have a gas
safety check carried out prior to a let and then annually. A copy of the record
must be given to the tenant. An authorised CORGI Registered engineer can only
carry out the check.
Guarantor: A person who is prepared to guarantee rental payments and other
obligations of a tenancy. The guarantor will be liable for rental payments if
a tenant is unable to pay them, so the guarantor will need to have a regular income.
Normally references or credit search references will be taken up on a guarantor.
High Rent tenancy: Tenancy agreement when the annual rent is over £25,000
per annum and known as a contractual tenancy. Holding Deposit: This is usually
a nominal amount (£100 +) that will be asked for when a tenant applies for a tenancy
of a property. If the tenancy does not proceed - tenant pulling out - references
not acceptable this is then often retained by the agent. Assuming the tenancy
proceeds, then the amount is normally deducted from the first months rental/ deposit.
HMO:
House in multiple occupation - Bedsits / flatlets normally self-contained room
with either cooking facilities in the room or a shared kitchen or shared bathroom
and toilet facilities. Under the Housing Act 2004 it will cover any property occupied
by more than one household that is a converted building even if the flats are
nort self contained. A converted building that does not comply with the 1991 Building
Regulations and some of the flats are let out on AST — Assured Shorthold
Tenancies. There will be 29 national standards that will appear in secondary legislation.
Inventory:
Listing of the contents of a property. This can include the state and condition
of a property including the garden, the state of a property - clean - dirty etc
and also the structural fixtures and fittings - power points - windows etc. They
should be checked in with the tenant at the start of the tenancy and then checked
out with the tenant at the end. It is more and m ore usual that a professional
inventory clerk is employed. Joint
& several liability: Where there is to be more than one (adult) person living
in the property, the tenancy will say they are "jointly and severally" responsible.
This means that, jointly, the tenants are liable for the payment of all rents
and all liabilities falling upon the tenants during the tenancy, as well as any
breach of the Agreement. Individually each tenant is responsible for payment of
all rent and all liabilities falling upon the tenant, as well as any breach of
the Agreement until all payments have been made in full. Landlord:
Is a person, persons, company or body that has a formal interest in the premises
and has the right to let the property. Lease:
Often confused with tenancy agreement this is normally a long lease on an apartment
(see Superior Lease) where as the actual document governing a rental is normally
known as a Tenancy Agreement. PCM:
Rental figure "pcm" - per calendar month.
References: Checking a tenant applicant's suitability to be able to pay
the rent and also the applicant's track record in earlier rentals. This often
involves contacting previous landlords, the present employer or accountant if
self employed and bank (banks normally charge for providing references) See also
Credit search references.
Release Clause: see break clause
Services: See utilities Stamp
Duty: The tenant is responsible for paying any Stamp Duty (SDLT Stamp Duty
Land Tax) The starting point is currently is £125,000 in one agreement raised
from £120,000 in the UK March 2006 Budget, therefore unless for example
the rental (without any gardening / cleaning or other additions included) is under
£10,000 a month there will not be any Stamp Duty Land Tax to pay. Standing
order: Standing order mandate is an instruction that the tenant makes to his/her
bank for payment of rent. It can either be set up on a form or on line (by the
tenant). Normally payments are made each month and the instruction will state
the number of payments or will continue to be paid until cancelled by the tenant.
A landlord or agent cannot cancel a standing order mandate, only the person whose
bank account the fund are coming from. A
standing order should not be confused with a Direct Debit. This is not
often used for the payment of rent and is more common for payments that differ
each month and the company notifies the bank's customer in advance you are paying
money to of the amounts and dates. e.g. annual AA subscription 25th July, electricity
company £so much for next 10 months commencing 15th August etc.
Studio apartment/flat: Flat with bedroom/living room all in one either
with a separate kitchen or corner of the main room as a kitchen with separate
bathroom and toilet.
Superior Landlord: People or person to whom the ownership of a property
might revert to at a later stage. e.g. an apartment with a 99 year lease. See
also Superior Lease. Superior
Lease or Head Lease: This is the lease that the landlord holds. This is often
the case in an apartment/flat where the owner has the leasehold interest, but
another individual owns the freehold. There is then this lease under which the
landlord is responsible for the obligations / covenants. When a property is let
out the tenant renting a property then also has to comply with any of these obligations
- e.g. not to hang out washing on a balcony etc. Tenant:
A person, persons (company or organisation) who is entitled to occupy a property
under the terms and conditions of a tenancy agreement. Tenancy
agreement: This is a legal binding document containing details about the rental
terms. Sometimes known as a rental agreement. It will state the parties - landlord
- tenants the rental price and the property address along with the "Covenants"
/ obligations (promises) of the let. It should be written in plain clear language.
Term of Tenancy: Length of tenancy - most initial tenancy agreements are
for a minimum of six months, they can be shorter and longer. Utilities:
Or Services - These are normally electricity, gas and water. Under most circumstances
the tenant is responsible for paying for these.
Water Charges: see utilities The
above has been compiled to assist people with rental terminology. We advise that
this information is for guidance only and cannot be relied on for accuracy and
that you should consult a qualified legal representative if you require full explanation.
© jml Property Services June 2005
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