jml Property Services Fact
File 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.SEE
ALSO Professional Property Organisations 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 red-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 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. In April 2007
a new system has been introduced in England and Wales for Assured Shorthold Tenancies.
The Tenancy Deposit scheme
is a mixture of custodial and insurance backed deposit holding mechanism. The
landlord or agent has to register the tenancy details within 14 days of the start.
If an agent is holding the deposit it must be held as "stakeholder". At the end
of the tenancy the tenant has to be notified of any deductions within a given
time. In Scotland the Scottish Executive are looking to introduce similar legislation
in due course 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. SEE
ALSO IVENTORIES IN THE UK CLICK
HERE 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 £120,000 in one agreement, 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 The
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 See
also Check list for moving within the UK or out of the UK or to the UK from overseas
CLICK
HERE 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 Is
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