Lettings Jargon Buster

We understand sometimes the world of lettings and property management can seem littered with acronyms and specific information, below is a small jargon buster to help you navigate the world of property;

AST

An Assured Shorthold Tenancy agreement (AST) is a widely used rental agreement where the tenant is an individual, the landlord does not reside in the property and net rent does not exceed £25,000 a year.

Break clause

A clause sometimes agreed between the landlord and tenant to be inserted in a fixed term agreement, typically if the initial fixed term is for a year or more. A break clause will usually allow either landlord or tenant to give written notice after a particular date or period of the tenancy in order to end the tenancy earlier than the original fixed term.

Covenants

Rules governing the property in its title deeds or lease.

DPS (Deposit Protection Service)

A custodial scheme authorised by the Government; it is free to use and open to all landlords and letting agents. It requires a tenant’s deposit to be paid over to the DPS for the duration of the tenancy and it is then paid back at the end of the tenancy when an agreement has been reached.

EPC

The Energy Performance Certificate (EPC) shows the energy efficiency and carbon emissions of a property and gives an indication of the fuel bills. It is displayed as two graphs – the energy efficiency and environmental impact of the property.

Freehold

The broadest form of property tenure guaranteeing that occupation continues for an indeterminate period of time. This contrasts with leasehold, which is always subject to a specified period of occupation.

Gas safety record

A certificate that states all gas appliances, pipework and flues are safe. It is a legal requirement for all landlords and must be provided every year by a Gas Safe registered engineer.

HMO

A licensed or an unlicensed HMO are tenancies that are occupied by several sharers. Licenses for licensed HMOs have to be sought from the local authority.

Inventory

A list of the contents of a rental property. The inventory will note the condition of items and will form the basis of a dilapidation report at the end of the tenancy. It often includes photographs of specific items and existing damage/defects.

Joint and severally bound

When two or more tenants take on a tenancy agreement as joint tenants, they become ‘joint and severally’ bound to all clauses in the tenancy agreement. This means they must pay an equal share of rent, are both held to the clauses and share the deposit equally.

Keys for a tenancy

When a tenancy begins, it is best practice for a landlord to provide keys to all named tenants on the tenancy agreement. Furthermore, when the tenancy ends, the tenants must give back the keys before they fully ‘surrender possession’ of the agreement.

 

 

 

Leasehold

The use and occupation of a property by way of a lease agreement for a certain period of time. A lease is frequently applicable to flats but can also apply to houses. The term of a lease varies but is commonly 99, 125 or 999 years.

Market Appraisal

A term often used by letting and estate agents to cover the process of them giving an opinion of the open market value of a property.

NHA

A ‘Non-Housing Act’ tenancy agreement is a tenancy agreement that falls outside of the bounds of the Housing Act 1988. With residential letting, it is generally company lets or resident landlords.

Overseas landlord

An overseas landlord is someone who rents out property in the UK but resides outside of the UK for more than 6 months in a year. Overseas landlords have different responsibilities when it comes to tax with regards to their income.

Peppercorn rent

A very low sum of rent or ground rent generally associated with premium leases.

Qualify applicants

When applicants contact a letting agent to enquire about a property, the negotiator must qualify them to ensure they can afford the rent and discuss their requirements.

Rent Act 1977

The Rent Act 1977 was a common tenancy before the Housing Act 1988 was introduced. It was unpopular with landlords as it gave tenants strong security in the property (even succession rights when the original tenant was deceased) and landlords can only increase rents by applying to a Rent officer. A few of these tenancies are still in existence.

Subject to contract

Where contracts are still not exchanged and nothing is yet legally binding on either seller or buyer.

Tenancy Deposit Scheme (TDS)

An insurance-based scheme for the protection of tenancy deposits and the resolution of disputes between landlords, agents and tenants concerning the return of deposits at the end of a tenancy.

Under Offer

The status of a property that is for sale when the seller has accepted an offer from a proposed purchaser but no exchange of contracts has taken place.

Vendor

The legal name for a person who is selling a property.

 

Angharad Trueman - Operations Manager

 


Posted on Wednesday, 5 July, 2017