Lettings Jargon Buster

Lettings A-Z – The Jargon Buster

Read our A-Z guide of key lettings terms to help give you a clearer insight into the world of property rental.

Act –
The Housing Act 2004 states the statutory requirements for tenancy deposit protection. (See TDPS)

Agent –
A letting agent acts on behalf of a landlord. This involves advertising the property to potential tenants and arranging viewings, credit and reference checks, rent collection, management as well as other tasks.

Applicant –
An individual or group of people interested in renting the property.

Arrears –
Unpaid money owed by the tenant in whole or in part after the date due, as specified in the tenancy agreement.

Assured Shorthold Tenancy (AST) –
An assured shorthold tenancy allows the landlord a guaranteed right to repossess their property at the end of the term stated in the tenancy agreement.

Block Management –
Letting agents acting on behalf of freeholders and leaseholders for apartments and flats, this includes internal cleaning, garden maintenance, redecoration and insurance.

Buy to Let mortgage –
A mortgage designed for people buying a property with the intention of letting it.

Client Account –
A bank account, or building society account set up specifically to hold money held on behalf of clients.

Common Household –
Where a residential property is self-contained, shared and let as a whole house by two or more tenants. Tenants who share a common household are usually jointly liable under the tenancy agreement.

Company Let –
A letting to a company.

Company Tenancy –
A tenancy agreement where the company is the tenant.

Contractual obligation –
Tasks or rules agreed to in the tenancy agreement by both the landlord and tenant, if these aren’t complied with this breaches

Contractual Term –
A fixed period of time stated in the Tenants agreement which confirms a fixed period of time that the contract will last.

Contract race –
When two or more parties submit offers, the landlord will choose the tenants by credit checks as well as employer and character references.

Conversion (Converted house/flat/etc) –
The division of a residential property into self-contained flats, maisonettes or bedsits.

Corporate relocation –
An employee relocating for work or business reasons.

Council Tax –
Payable by the tenant, this is the local authority tax for England, Wales and Scotland.

Covenants –
An agreement to engage or refrain from specific actions as detailed in the tenancy agreement.

Credit Check –
A mandatory financial background check, this check may also include previous employers and landlords.

Credit History (Credit Search References) –
This is an extensive record of prospective tenants borrowing habits, and will include information about late payments if applicable.

Deposit –
A monetary amount held by the landlord or lettings agent for security against damage to the property. At the end of the tenancy agreement the tenancy will be notified of any deductions from the deposit taken due to damage or dirt in the property.

Detached –
A detached property is a stand-alone building which has no adjoining walls with any other building.

Development –
This term covers new builds or older properties which are currently being rebuilt or modernised.

Dilapidation –
When a property is in a bad condition which exceeds acceptable wear and tear.

Due Diligence –
A generally accepted standard to which duties are performed.

Duty of Care –
An obligation to others to provide the right advice, and to ensure the well-being and safety to those who visit the property. A certain level of care is provided through safety legislation which protects tenants such as portable appliance testing and the electrical equipment safety regulations.

Execute a Tenancy –
Finalising a legally valid tenancy by dating both parts of the tenancy agreement (the landlord and the tenants) and exchanging them. The date is then legally considered to be the date on which the agreement was made.

Extensions –
Once the contract has expired an extension may be negotiated, this can be for a further fixed term, month-by-month or quarterly.

Freehold –
This refers to the ownership of the property. Unlike leasehold properties, this belongs entirely to the owner of the property without limitation.

Furniture and Furnishings (Fire Safety) Regulations 1988 (and amendment 1993) –
Legislation applies to all household and upholstered furniture and furnishings to certify these are compliant.

Gas Safety Regulations –
Prior to letting, and each year following tenancy, a gas safety check (GSR) must be carried out. A registered CORGI engineer must carry out the check and a copy of the record given to the tenant.

Guarantor –
A guarantor guarantees rental payments on behalf of the tenant to a landlord. The guarantor will need references and credit searches undertaken, as any unpaid tenant payments will be paid by them.

Handover –
As per the date in the tenant’s agreement, this is the time tenants are able to occupy the property.

High Rent Tenancy (Contractual tenancy) –
This applies to tenancy agreements worth over £100,000 per annum.

Holding Deposit –
A holding deposit is quite rare in some areas of the country, this is an amount of money collected when a tenant applies to let a property. If the tenancy falls through due to an unacceptable credit check or reference, the tenancy doesn’t go through and the deposit is kept by the agent. If the tenancy proceeds, the deposit amount is deducted from the first month’s rental amount.

House in Multiple Occupation (HMO) –
HMO refers to self-contained flats or bedsits or bedrooms with a shared kitchen and/or bathroom, most commonly used for student accommodation.

Initial Term –
The first period of tenancy.

Inventory –
An inventory lists all of the contents of the letting property including furnishings and fixtures. This will be checked at the start and end of the tenancy, any missing or damaged items will be taken out of the deposit.

Joint and Several Liability –
This applies to more than one adult living in a property as tenant responsibility will be shared. This applies to the payment of rent, liabilities and breaches of the agreement.

Landlord –
The person, people or company which has the right to let the property.

Lessor –
The person responsible for granting the lease (this is usually the landlord).

Letting –
An agreement to rent a property.

Long Let –
A letting over a six-month duration.

Maintenance Charge (Service Charge) –
The cost of repairing and maintaining the external and internal elements of communal parts of the building such as hallways.

Maisonette –
A property occupying two floors of a larger building which has its own entrance from the outside.

Managing Agent (Letting Agent) –
A company is responsible for the maintenance and management of the property, following an agreement.

Multiple Occupation –
See House in Multiple Occupation, HMO

National Approved Letting Scheme (NALS) –
An accreditation scheme in the UK for lettings and management agents. This scheme is used when dealing with tenants’ deposits.

Notice Period –
The period of notice a landlord and tenant must give to end a tenancy agreement.

Parties –
All people or companies involved in signing the tenancy agreement, this is usually the tenant, landlord and occasionally a guarantor.

PCM –
A rental figure which stands for ‘Per Calendar Month’.

Pied á Terre –
A property used for temporary occupation.

Portable Appliance Testing (PAT Testing) –
An inspection and test of all the electrical equipment in the property, is performed on an annual basis to ensure safety.

Premises –
The property is let and any common access ways and facilities.

Property Management –
(See Managing Agent)

Private Rented Sector –
The industry is involved in letting residential property be owned by private landlords.

References –
References will need to be given to the letting agent or landlord prior to letting. These include references from employers, previous landlords and/or character references.

Resident Landlord –
When the landlord lives in the same property as is being leased.

Ring Fenced –
Money held for a specific purpose, such as a tenancy deposit which can only be used for the purpose of the tenancy agreement.

Semi-detached –
A property which shares adjoining walls with another building.

Short Let –
A tenancy period which lasts 6 months or less

Sitting tenant –
A tenant which is occupying a property and can’t be evicted due to legality issues.

Sole Agent –
When a single agent is instructed to undertake full management of a let.

Standing Order Mandate –
This is an instruction from the tenant to their bank to make a regular monthly payment to the landlord or letting agent to pay for rent.

Statutory Obligations –
Requirements placed on landlords or letting agents by Acts of Parliament.

Subject to Contract –
This becomes legally binding once the contract is in place.

Sublet –
A tenant lets a property to another person.

Tenant –
A person, people or company occupying a property under the terms of a tenancy agreement.

Tenancy Agreement (Rental Agreement) –
A legally binding document detailing rental terms and conditions.

Tenancy Deposit Protection Scheme (TDPS) –
Deposit Protection is a mandatory scheme which protects tenancy deposits in the case of disputes between letting agents, landlords and tenants.

Termination –
The end of a tenancy period.

Terraced House –
A property which adjoins other properties on both sides.

The Property Ombudsman (TPO) –
The Property Ombudsman is a free and independent mediation service which provides sellers, buyers, landlords and tenants’ advice, help and resolutions.

Utilities –
These are services which in most cases the tenant pays for – this includes electricity, water and gas.

Valuation –
This is a survey of the landlord’s property to estimate its value for letting purposes

Yield –
This is the income made by the landlord from a property calculated as a percentage of its value.