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Jargon Buster

Accompanied viewing

An appointment to look around a property accompanied by the agent

Agent

An authorised person or company acting on behalf of the landlord.

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 by the bank.

Block Management

Agents who act for the freeholders and leaseholds for block of apartments and flats. They collect a service charge from the leaseholders and organise the maintenance of the communal areas, buildings insurance, pay communal utility bills etc.

Break Clause (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. Often found in Company let agreements. 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

Company Let

Let to a bona fide company. This is a contract not an AST.

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 these are obligations or “promises” made by either Landlord or Tenant.

Credit Referencing

References taken up on a tenant applying for rented accommodation. Most agents and individual landlords use a credit referencing 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.

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 mechanisms.

Direct Debit

See section on Standing Orders

Fixtures & 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 to be left in the property and not to assume that items in the property when viewed will actually be provided.

Gas Safety Certificate

The Landlord of a rented property must, by law, 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 Gas Safe 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.

HMO (House in Multiple Occupation)

House in multiple occupation –Your home is a House in Multiple Occupation (HMO ) if both of the following apply: at least 3 tenants live there, forming more than 1 household. You share toilet, bathroom or kitchen facilities with other tenants.

Holding Deposit

This is usually a nominal amount 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 usually retained by the agent to cover expenses.

Inventory

An inventory is a binding legal document that provides an accurate written record of the condition and contents of a property at the beginning of a tenancy.

Joint and Several Liability

Often applies to House shares. 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

A person, persons, company or body that has a formal interest in the premises and has the right to let the property.

Lease

A contract whereby a tenant pays a landlord, or leaseholder pays a freeholder, for the right to use a property. Leases can be of short or very long duration. Leases are complex documents and specialist legal advice should be sought if you are considering entering into a lease.  A lease typically requires rent to be paid (otherwise the contract is usually referred to as a Licence), although this does not have to be a commercial rent, with a peppercorn rent often sufficing.

As a rule of thumb, most houses are freehold and most flats leasehold. If you own a leasehold flat, you effectively rent it for a period of time, specified on the lease.

PCM (Per Calendar Month)

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.

Stamp Duty

A tax paid by purchasers of properties with a value in excess of £125,000, of between 1% and 4% depending on value. 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.

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 (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. The landlord must abide by the obligations / covenants and ensure that his tenant also abides by them if the flat is rented out – e.g. not to hang out washing on a balcony etc.

Tenancy Agreement

This is a legal binding document containing details about the rental terms. It will state the parties involved i.e. the landlord and tenants, the rental price and the property address along with the “Covenants” / obligations (promises) of the tenancy.

Tenant

A person, persons (company or organisation) who is entitled to occupy a property under the terms and conditions of a tenancy agreement.

Term of Tenancy

Length of tenancy – most initial tenancy agreements are for a minimum of six months.

Utilities (Services)

These are normally electricity, gas and water. Under most circumstances the tenant is responsible for paying for these.

© Matthew's of Chester 2017