Jargon Buster

Additional Licensing: When a council extends the requirement for HMOs (Houses in Multiple Occupation) to be licensed to other types of properties, often smaller ones.

Agent: A representative acting on behalf of the landlord, responsible for various tasks such as letting, rent collection, management, and estate agency services.

Arrears: Unpaid rent or charges by a tenant after the agreed due date.

Assured Shorthold Tenancy (AST) Agreement: A legally binding contract that outlines the terms and conditions of the tenancy, including rent amount, payment schedule, responsibilities of both parties, and any other important details.

Banker’s Draft: A secure payment method similar to a cheque, typically used for large transactions.

Block Management: The management of communal areas and services in apartment buildings or blocks of flats.

Bonding or Bonded: An agent holds Client Money Protection Insurance to cover potential loss or misuse of clients' funds.

Break Clause: A contract provision that allows either party to terminate the tenancy before its fixed term ends.

Break Fee: A fee charged to a tenant who terminates the tenancy before the agreed-upon term, as stipulated in the break clause.

Buy to Let Mortgage: A mortgage designed for property owners who plan to rent out the property.

Client Account: A separate account for holding clients' funds in a secure manner.

Common Household: A property shared by multiple tenants, often with joint and several liability.

Company Let: Renting a property to a company for its employees or associates.

Conveyancing: The legal process of transferring ownership of a property from the seller to the buyer.

Contractual Obligation: A legally binding requirement set out in a contract.

Contractual Term: A fixed period of time stated in a contract referring to the time that the contract will last.

Conversion: The sub-division of a residential property into bedsits, self-contained flats, or maisonettes.

Council Tax: A local authority tax for England, Wales, and Scotland, which is usually the responsibility of the resident to pay.

Covenants: An agreement to refrain from or engage in a specified action that is laid out in the terms of the tenancy agreement, refers to obligations or promises made by either the Landlord or Tenant.

Credit Search References: Background checks on tenants to assess their suitability financially, often carried out by external companies contacting the applicant’s employer, landlord, and checking credit history.

Deposit: A sum of money held by the landlord to cover potential damages or unpaid rent.

Deposit Protection Scheme: A government-approved scheme in which landlords must protect tenants' deposits within a specific timeframe and provide information about the scheme to tenants.

Dilapidation: Damage to a property or contents that exceeds acceptable wear and tear.

Due Diligence: A process of performing duties to the generally accepted professional standard.

Duty of Care: An obligation owed to others, specifically Landlords and Tenants, to provide the correct advice regarding lettings and ensure the well-being and safety of those who may visit the property.

EPC (Energy Performance Certificate): A document that rates the energy efficiency of a property and provides recommendations for improvements.

Execute a Tenancy: The procedure to finalise a legally valid tenancy by dating the Original (signed by the landlord) and the Counterpart (signed by the tenant) and exchanging them. The date is legally considered to be the date on which the agreement was made.

Extensions: Contracts to let residential property are for a fixed term. On expiration of that term, an extension may be negotiated, which can be referred to as a renewal, for a further fixed term, month-by-month, or quarterly basis.

Fair Wear and Tear: The expected deterioration of a property due to normal, everyday use. Tenants are not typically responsible for repairs related to fair wear and tear.

Fixtures and Fittings: Items usually provided in a letting that may include curtains, carpets, blinds, light fittings, kitchen units, and appliances. In some cases, it may also include furniture. It is advisable to check what is provided and not to assume that items will be provided.

Freehold: Refers to the ownership of the property and means that it belongs to the owner without limitation of time, unlike a leasehold.

Gas Safety Regulations: Legal requirements for regular gas safety checks in rented properties.

Ground Rent: The annual charge payable by the leaseholder to the freeholder.

Grounds For Possession: The reasons for applying to the courts for repossession of a property.

Guarantor: A person who agrees to cover rent payments if the tenant defaults.

Handover: The time when tenants are allowed occupation of a property.

Head Lease: This sets out the promises the Landlord has made to his Superior Landlord. The promises contained in this Head Lease will bind the Tenant if he has prior knowledge of those promises.

High Rent Tenancy: Refers to a tenancy agreement where the annual rent is over £100,000 per annum, also known as a contractual tenancy.

HMO (House in Multiple Occupation): A property shared by three or more tenants from multiple households.

Initial Term: This describes the first period of the tenancy.

Inventories and Check-Out Reports: Detailed reports that document the condition of the property at the start and end of the tenancy, respectively, helping to determine any damages or changes.

Inventory: An inventory details the contents of a property and can include the state and condition of a property including the fixtures, fittings and the garden. They should be checked in with the tenant at the start of the tenancy and then checked out with the tenant at the end. Often a professional inventory clerk is employed to carry out the inventory.

Joint & Several Liability: Where there is more than one adult 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 organisation who is entitled to occupy a property under the terms and conditions of a tenancy agreement.

Lease: Often confused with tenancy agreement, this is normally a long lease on an apartment. The actual document governing a rental is normally known as a Tenancy Agreement.

Lessor: Refers to the person responsible for granting a lease, usually the landlord.

Letting: The process of renting a property to a tenant.

Maintenance Charge: A charge payable covering the cost of repairing and maintaining the external or internal elements of communal parts of a building, prevalent in flats and apartment buildings.

Managing Agent: A professional or company responsible under an agency agreement for the maintenance and management of the property.

Multiple Occupation: A property occupied by more than one tenant and not used as a single home, that is where individual and private rooms may be locked but where tenants share facilities. This also includes any residential property which is occupied by separate tenants under individual agreements.

Non-Housing Act: Residential tenancies which don’t meet the criteria of the Housing Act 1988 and Tenancies Act 1996 are known as Non-Housing Act Tenancies.

NRL 1: A Non-Residence Landlord Scheme form which is sent to the Inland Revenue.

Notice Period: The time frame required for terminating a tenancy agreement.

Occupancy Rights: These are contained within the tenancy agreement and give the tenant the right of occupancy of the property.

Owner Occupier: The person who owns the property who is, has been, and will be living in the property as his sole or principal residence.

Parties: Landlord and tenant (and possibly a guarantor) who come together to sign a tenancy agreement are collectively known as ‘Parties’ to the agreement.

Periodic Tenancy: Either Contractual Periodic whereby a tenancy is contracted by agreement to run from month to month, or Statutory Periodic which refers to when a fixed term comes to an end and the tenant remains, by agreement, in the property under the same terms and conditions as the original agreement and runs from month to month or quarter to quarter, depending upon the basis on which the rent is paid.

PCM: Refers to a Rental figure and stands for per calendar month.

Power of Attorney: A legal document giving a third party an absolute or limited right over the principal’s property and assets.

Premises: A part or parts of a building which may include boundaries, fences, gardens, and outbuildings, belonging to the Landlord unless they have been specifically excluded from the Tenancy. When the Tenancy refers to part of a larger building, the Premises include the use of common access ways and facilities.

Prescribed Information: This refers to information which the Housing Act 2004 Sections 213 (5) – (6) and The Housing (Tenancy Deposits) (Prescribed Information) Order 2007 require to be provided to the tenant within 14 days of the deposit having been received.

Private Rented Sector: The industry concerned with the letting of residential property owned by private landlords.

Public Liability Insurance: An insurance policy that aims to protect members of the public who are injured or affected by an accident or occurrence.

References: Background checks on tenants to assess their suitability financially, often carried out by external companies contacting the applicant’s employer, landlord, and checking credit history.

Rent Arrears Recovery (RAR): A process by which landlords can recover unpaid rent directly from a tenant's bank account, under certain conditions.

Resident Landlord: Where the Landlord occupies part of the dwelling as his main or principal home and lets the rest of the property.

Ring Fenced: Refers to money held in such a way that it can only be used for a specified purpose. So in the case of a tenancy deposit, it can be used only for the purposes set out in the tenancy agreement.

Selective Licensing: This is at the discretion of the borough and can affect all rental properties regardless of size, number of storeys, or number of occupants. For example, a council can instigate compulsory licensing of all residential rental properties within a street, ward, or the whole borough.

Sole Agent: When a single agent is instructed to undertake a sale or let.

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 the rental (without any gardening/cleaning or other additions included) would be over £10,000 a month before Stamp Duty Land Tax is payable.

Standing Order: Standing order mandate is an instruction that the tenant makes to their bank for payment of rent. Normally payments are made each month and the instruction will state the number of payments or will continue to be paid until canceled by the tenant. A landlord or agent cannot cancel a standing order mandate, only the person whose bank account the funds are coming from. A standing order should not be confused with a Direct Debit, which is not often used for the payment of rent and is more common for payments that differ each month.

Statutory Obligations: Legal responsibilities placed on landlords and/or their agents by Acts of Parliament, i.e., Law of the Land.

Studio Apartment/Flat: A flat with a bedroom and living room all in one either with a separate kitchen or corner of the main room as a kitchen, with a separate bathroom and toilet.

Subject to Contract: Signifies that an agreement is not yet legally binding.

Sublet: The action of a tenant letting accommodation to be occupied by another person for a lesser term.

Surrender of Tenancy: When both parties agree to end the tenancy before the agreed-upon term.

Superior Landlord: The entity to whom a leaseholder's property ownership might revert.

Superior Lease or Head Lease: The lease that the landlord holds, where the owner has a leasehold interest, but another individual owns the freehold. There is then a lease with the freehold under which the landlord is responsible for 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.

Tax Exemption: An approval allowing funds to be passed to customers without tax deduction.

Tenant: The individual or entity renting the property.

Tenancy Agreement: A legal document outlining terms and conditions of the tenancy.

Tenancy Agreement Addendum: A supplementary document that adds terms or conditions to an existing tenancy agreement.

Tenancy Deposit Scheme (TDS): Run by the Company 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. The TDS is a mandatory scheme that has been set up in accordance with the Housing Act 2004.

Tenancy Deposit: A sum of money held by the landlord to cover potential damages or unpaid rent.

Tenancy Deposit Scheme (TDS): Run by the Company 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. The TDS is a mandatory scheme that has been set up in accordance with the Housing Act 2004.

Termination: Refers to the ending of a tenancy.

To Clear Monies: Refers to the passing of money through the banking system, which ensures that money, other than cash or bankers’ drafts, is secure in your account and available for use.

Utilities: These are normally electricity, gas, and water and may be referred to as services which, under most circumstances, the tenant is responsible for paying for.

Void Period: A period when a property is unoccupied between tenancies.

Yield: Refers to income from a property calculated as a percentage of its value.