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Glossary of terms

Please find a list of common used terms 

AST
An Assured Shorthold Tenancy.

Arrears
Money unpaid by a tenant in whole or in part after the due date specified in the tenancy agreement.

Buy To Let Mortgage
A type of mortgage specifically designed for investors buying a property with the intention of letting it out. A minimum deposit of 15% is required as is proof of rental valuation or rental comparisons in the area.

Check In and Check Out(s)
Meetings at the beginning and the end of the tenancy to ascertain the condition of the property. Ideally this is carried out by an independent inventory clerk.
 
Credit Referencing Agency
A Credit Referencing Agency is used by letting agents to verify the credentials of the tenant(s) to determine their suitability as clients. We employ the comprehensive search which looks at the full credit history of the applicant as well as their level of debt on credit cards.

Common Household
Where a residential property is self contained and shared as a whole house by two or more tenants. Our tenants are usually jointly and severally liable under the tenancy.

Contractual Obligation
A binding obligation imposed on a party to a contract and which, if not complied with, breaches the contract.

Contractual Term
A fixed period of time stated in a contract or agreement as being the time for which the contract will last.

Corgi Registered
‘Corgi’ is the Council for Registered Gas Installers and is the trade organisation for registered gas fitters.

Dilapidation
Damage or excess wear and tear to a property or its contents.

Dilapidations Deposit
This is the money initially provided by the tenant(s) against any disrepair or damage to a rented property during the tenancy. The Housing Act 2004 specifies that all deposits taken must be registered with an authorised deposit scheme.

Due Diligence
In the context of the lettings market, a company that practices due diligence ensures that it gives it clients best advice. It also refers to the process of making sure that someone is what they say they are and can do what they claim.

Duty of Care
An obligation the agent owes to others, in particular Landlords and Tenants, to provide them with the correct advice regarding the tenancy and to ensure the well being and safety of all those who visit the property.

Execute (a tenancy)
The procedure to complete a legally valid tenancy by dating the Original (Signed by the Landlord or the agent on behalf of the Landlord) and the Counterpart (Signed by the Tenant). 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 and at (Renewals) the expiration of that term an extension is negotiated for a further fixed term or a periodic month by month basis or Quarterly basis.

FICO
Financial Intermediaries and Claims Office - an Inland Revenue department administering tax for overseas Landlords.

Freeholder (or superior landlord).
With leasehold property, there will be a superior Landlord and/or a freeholder who owns the land on which the building stands AND who has ultimate responsibility for the building itself.

Gas Safety Certificate
This is a legal requirement to be carried out on an annual basis by a CORGI gas engineer. All parties should have a copy of this certificate prior to occupation of the property and beginning of the tenancy.

Grounds For Possession
The reasons for applying to the courts for repossession of a property and the basis of a case. There are two types of grounds – mandatory and statutory.

Guarantor
A third party who undertakes to be responsible in whole or part for the obligations of a tenant. The guarantor undertakes to pay if the tenant defaults.
 
HMO
The 1985 Housing Act definition of "House in Multiple Occupation" was a "house which is occupied by persons who do not form a single household". If the property has 5 or more people and/or is over 3 floors then it requires a mandatory licence from the local council.

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

Interest-Only Mortgage
An interest-only mortgage stays the same throughout the mortgage term. Interest and a premium to an investment vehicle are paid monthly. At the end of the term, the proceeds from the investment vehicle are intended to repay the mortgage. The amount will depend on the performance of the investment vehicle. If you choose an interest-only mortgage you are responsible for ensuring that you have sufficient funds available to repay your mortgage at the end of the term.

Inventory
A list that describes the condition of furnishings and contents of a property at the start and end of a tenancy in order that any dilapidation during the tenancy can be identified. This is often carried out by a specialist inventory clerk. This is both the tenant’s and the landlord's record of the condition of the property at the beginning of the tenancy.

Joint & Several Tenancies
This applies to Tenancy Agreements involving more than one tenant or Landlord. They are bond individually and together by the terms of the Tenancy Agreement.

Landlord
The owner of a property that is ‘let out'. Where there is more than one owner each will be a ‘landlord' and jointly liable.

Law of Contract
Law of Contract Tenancy/ Tenancies outside the scope of the Housing Acts of 1988 and 1996 and subject to the standard provisions of contracts.

Lease
A contract granting use or occupation of property during a specified period in exchange for a specified rent. The lease sets out the rights and responsibilities of both parties.

Lessee
The Tenant.

Leasehold Consent
Owners of property which is ‘leasehold; may find that their lease requires them to apply for consent to sublet from their Head Landlord.

Lessor
The Landlord.

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

Maisonette
A property arranged over more than one floor which has its own front door (not a communal area).

Mortgage
A sum of money advanced by a lender (such as a bank or building society) on the security of a property and repayable over a long period.

Mortgage Rate
The standard variable interest rate quoted by all mortgage lenders which normally varies with the Bank of England base rate. All discounted rates are based on this mortgage rate.

Mortgage Term
The period of time over which the loan is to be repaid. This varies although in the main it ranges between 20 – 30 years.

Multiple Occupation
A property occupied by more than one tenant and not used as a single home, e.g. Individual and private rooms which may be locked but where tenants share facilities. Any residential property which is occupied by separate Tenants under individual agreements.

Non-Housing Act
Residential tenancies which do not meet the criteria of the Housing Act 1988 and Tenancies Act 1996 are collectively known as Non-Housing Act Tenancies.

Notices
Formal written statements to a party to a tenancy specifying certain statements and proposals. Formal documents issued at certain points during a tenancy.

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

Occupancy Rights
Contained within the tenancy agreement giving the Tenant right to occupancy of the property.

Ombudsman
Independent professional bodies who investigate complaints on behalf of customers against, for example, estate agents, solicitors and insurance companies.

Owner Occupier
The person who owns the property who is, has been and will be living in the property as his sole or principle residence (relevant to Ground 1).

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

Periodic Tenancy
Either contractual periodic – a tenancy which is contracted by agreement to run from month to month or statutory periodic 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.

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

Public Liability Insurance
An insurance policy designed to protect members of the public injured or affected by an accident or occurrence.

Remortgage
Refinancing a property by either switching a mortgage from one lender to another or by taking out a second mortgage to draw upon any equity gained by a rise in value.

Repayment Mortgage
Monthly payments which cover both interest and capital (as opposed to an interest-only mortgage) so that the amount outstanding gradually decreases until the mortgage is fully repaid. Typically over 25 years.

Repossession
Occurs when the mortgage lender takes possession of a property due to non-payment of the mortgage/arrears.

Resident Landlord
Where the Landlord occupies part of the dwelling as his main or principle home and lets the rest of it.

Schedule of Condition
This describes the state of fixtures and fittings and free standing articles and that of the property itself.

Social Housing
Mainly local authority, Housing Association or Trust property.

Stakeholder
A third party or agent whose responsibility is to hold the deposit and distribute at the end of the tenancy agreement by mutual consent.

Statutory Obligations
Requirements and obligations placed on Landlords and/or their agents by Acts of Parliament – i.e. Law of the Land.

Studio Flat
A flat consisting of one main room or open-plan living area incorporating cooking and sleeping facilities and a separate bathroom/shower room. This can vary slightly with a ‘super studio' where by the kitchen can be separate and the sleeping area can be partitioned from the main space.

Subject to Contract
A Legal term placed as a heading on pre-contract letters to make it clear in law that the contents of that document do not at this stage constitute a contract.

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

Tax Exemption
An exemption number issued by the Inland Revenue Office (FICO) to your agency approving the passing of rents to the customer without a tax deduction.

Tenancy
Temporary possession of a property by a tenant. This usually ranges from between 6 months to 3 years.

Tenancy Agreement
A legal agreement designed to protect the rights of the tenant and landlord setting out all the terms and conditions of the rental arrangements. The most commonly used type is an ‘Assured Shorthold Tenancy' set for a fixed period with a fixed date when the property will be vacated.

Tenant
The person(s) who has temporary possession of a property in accordance with the Tenancy Agreement.

Termination
The ending of a tenancy.

Under Offer
The status of a property, when a Landlord has accepted an offer from a tenant(s) prior to the move-in.

Valuation
This is a market accurate price per month recommended by the Agent as to initially market the property.

Yield
The income from a property calculated as a percentage of its value, used by investors to determine the profitability of the asset.

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