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
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