Lettings - Jargon buster
Adverse Credit - Used to apply to a borrower or application that has past problems with bad credit, for instance frequent late payment, breached arrangement, bankruptcy or County Court Judgement.
Amortisation-The gradual elimination of a liability, for example, a mortgage through regular payments over a set time period or the amount paid by way of capital or principle repayments on a loan annually.
Annual Equivalent Rate (AER) - A notional rate that is often quoted on interest paid on savings and investments. It aims to demonstrate what your interest return would be if the interest was compounded and paid annually instead of monthly (or any other period).
Bank of England Base Rate - The Bank of England set a rate each month known as the 'Base Rate'. Banks and Building Societies use the Base Rate to set the interest rates they pay on deposits, or charge on debts.
Break Clause - A clause in a fixed term tenancy agreement which allows both parties the right to terminate the agreement prior to the end of the term. Such a clause should always apply to both Landlord and Tenant or it may be deemed an unfair term of contract.
Capped Rate - The maximum interest rate you will pay on a mortgage for an allocated period of time, usually the first few years of the loan.
Collateral - Property pledged as a guarantee for the repayment of a loan.
Contractual Tenancy/Non Housing Act Tenancy-Refers to a tenancy agreement where the annual rent is over £100,000 per annum, and does not meet the criteria of the Housing Act 1982 and Tenancy Act 1996.
Dilapidations - Damage to a property, missing items in an inventory, re-decoration required etc, usually assessed on the check out at the end of the tenancy.
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.
EBITDA - Earnings before Interest, Taxes, Depreciation and Amortisation. EBITDA equates to operating revenue minus operating expenses plus other revenue.
FICO - Financial Intermediaries and Claims Office - an Inland Revenue department administering tax for your overseas Landlords.
Freeholder - 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.
Gazumping - When a seller pulls out of a sale after accepting an offer above the asking price. Often mistakenly used by people who have made an offer below the asking price and where a higher offer is later accepted. If you don't offer the asking price, you may lose out.
Gas Safe Registered - 'GAs Safe' is the trade organisation for registered gas fitters.
Grounds For Possession - The reasons for applying to the courts for repossession of a property and the basis of a case.
Guarantor - A third party who undertakes to be responsible in whole or part for the obligations of a tenant who subsequently breaches a Tenancy Agreement, by means of deed or enjoining on the Tenancy Agreement.
Handover - When tenants are allowed occupation of a property.
Head Landlord - A person or organisation that owns the freehold of a property which has been let out (and may be sub-let).
Initial Term - This describes the first term period of the tenancy.
Inventory - An inventory is a list made prior to the letting, detailing all fixtures, fittings and free standing articles. This should incorporate a Schedule of Condition.
Schedule of Condition - This describes the state of fixtures and fittings and free standing articles and that of the property itself
Jointly and Severally - A legal expression where two or more persons are held responsible under one tenancy. Each can be held responsible for the whole of the tenancy as well as his share.
Landlord’s Gas Safety - Commonly called the ‘Gas Certificate’, issued by a Gas safe registered contractor.
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 legal estate for a term of years. The lease sets out the rights and responsibilities of both parties.
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.
Lessee - The tenant.
Lessor - The Landlord.
Managing Agent - A professional person 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, e.g. individual and private rooms which may be locked but where tenants share facilities. Also, 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.
NRL 1 - Non- Residence Landlord Scheme form which is sent to the Inland Revenue.
Notices - Formal written statements to a party to a tenancy specifying certain statements and proposals. Formal documents issued at certain points during a tenancy.
Occupancy Rights - Contained within the tenancy agreement giving the tenant right to 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 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.
Resident Landlord - Where the Landlord occupies part of the dwelling as his main or principle home and lets the rest of it.
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 agreement by mutual consent.
Stamping Tenancy - Required under the Stamps Act 1891. On payment of duty, the amount of money detailed in the Act, due to the Inland Revenue.
Statutory Obligations - Requirements and obligations placed on Landlords and/or their agents by Acts of Parliament – i.e. Law of the Land.
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 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.
Term - The period shown in the Tenancy Agreement as the length of the letting.
Term of Contract - An expression referring to stipulated rights or responsibilities expressed in a contract.
Termination - The ending of a tenancy.
To Clear Monies - To pass through the banking system. To ensure money, other than cash or bankers’ drafts, is secure in your account and available for use.