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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.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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