The lettings process can be daunting when you are presented with lengthy contracts. Of course, these are in place to protect both you and the landlord, but do you understand every part?
Propertymark, who are dedicated to promoting the highest industry standards have put together a really helpful guide for tenants of common terms that you will come across:
Tenant: that’s you!
Landlord: the owner of the property that is being rented out.
Tenancy agreement: a tenancy agreement is a contract between a landlord and a tenant that sets out the legal terms and conditions of a tenancy. A tenancy can either be periodic (running on a week-by-week or month-by-month basis) or for a fixed term (running for a set period).
Assured Shorthold Tenancy (AST): an Assured Shorthold Tenancy is the most commonly used tenancy agreement and is usually for a fixed period of six to twelve months. This agreement sets out your and your landlords rights and responsibilities during your tenancy.
When an Assured Shorthold Tenancy ends, provided the tenant remains in the property, it will continue as a periodic tenancy unless the tenant signs a renewal agreement.
Renewal: at the end of the fixed term tenancy, tenants and landlords can choose to renew the tenancy for another fixed term, although it is not essential. It does, however, provide long term security for both the landlord and tenant. Landlords may ask a tenant to sign a renewal if they want to change the terms of the tenancy agreement, which could include raising the cost of rent.
Break Clause: a provision that is built into a tenancy agreement which enables either the landlord or the tenant, or both, to end the tenancy early.
Absent landlord: when a landlord is described as “absent”, it means they cannot be contacted directly. In this case, the managing or letting agent would be the first point of contact.
Credit Search References: before signing a tenancy agreement, you will be referenced by your letting agent or landlord. Many agents and individual landlords use external companies who will undertake a credit and affordability check along with employee and landlord references to confirm your employment details and salary.
PW: this refers to the frequency of rental payment and means per week.
PCM: refers to a rental occurrence and stands for per calendar month.
Guarantor: someone who agrees to sign the tenancy agreement, effectively guaranteeing that they will undertake the full obligations of the contract on your behalf if you default on your obligations under the agreement. If for some reason you cannot pay the rent, the guarantor will be responsible for making the payments.
Deposit/Security deposit: landlords will ask new tenants to pay a tenancy deposit to cover any future damage to the property or unpaid rent. The deposit is usually equivalent to six weeks rent but the landlord can choose to set the deposit at any amount.
Holding deposit: a sum of money paid to the landlord or letting agent to reserve a rental property before signing the tenancy agreement. If you decide to withdraw your application for the tenancy, this is normally non-refundable. If the tenancy goes ahead, the amount of the holding deposit is usually deducted from the first month’s rent.
Inventory and Schedule of Condition: this is a check list of the current contents and condition of a property which is undertaken to ensure that the property is left in the same condition in which it was originally let. It can cover cleanliness and the state and age of fixtures and fittings such as plug sockets, furniture, windows etc.
At the start of the tenancy, there should be an inventory to “check in” and then again at the end of the tenancy to “check out”. Agents and landlords may use an ARLA Inventories member to carry out the inventory.
Client Money Protection (CMP): a scheme that protects money paid by a tenant to their letting agent or landlord. It is important to note that CMP is not a legal requirement and not all agents and landlords are covered. By using an ARLA Propertymark Protected member, you can guarantee that your money will be safe.
Tenancy Deposit Protection (TDP): your landlord must register your deposit with one of the three Government-authorised schemes (Deposit Protection Service, MyDeposits or Tenancy Deposit Scheme) within 30 days (14 days in Northern Ireland) of you paying it. They must also give you the details of which scheme is used, your Tenancy Deposit Protection Certificate and additional information (known as Prescribed Information) which explains how to get the money back at the end of your tenancy and what to do if you and your landlord or agent disagree on the amount to be returned.
Redress: if you have a dispute with your landlord, the case can be referred to a neutral expert to resolve – this is known as redress. All letting agents are required to sign up to a property redress scheme, so make sure to note down which scheme your agent is registered with. ARLA Propertymark Licensed members in England and Wales will belong to either The Property Ombudsman, Ombudsman Services Property or the Property Redress Scheme. ARLA Propertymark Licensed members in Scotland fall under the remit of the First-tier Tribunal for Scotland (Housing and Property Chamber).
Sublet: subletting is where a tenant lets part or all of their rental property to someone else. You must get permission from your landlord before subletting a property, otherwise, you could be in breach of your rental agreement and your landlord can take legal action against you.
House in Multiple Occupation (HMO): HMOs are properties which house tenants from two or more households with shared facilities such as the kitchen or bathroom. Large HMOs (more than 2 floors and more than 4 people) need to be licenced.
Common parts: any part of the property, land or premises which are part of a shared facility (for example, a shared entrance or garden).
Managing Agent: an agent or company who is responsible under an agency agreement for the maintenance and management of the property. Not all properties are professionally managed so your landlord may be responsible for the maintenance of the property.
Fixtures and fittings: items that are usually included in a rental property such as 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 prior to signing the letting agreement.
Dilapidation: damage to a property or contents that is considered to go beyond acceptable wear and tear.
Notice period: the period of time that a tenant or landlord must give to end the tenancy agreement.
Arrears: unpaid rent that is overdue or outstanding.
We hope this list help, however, if you need any further advice then give our friendly Lettings team a call on 01452 398010.
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