Lettings Jargon Buster

Within the Private Rental Sector, there is a whole host of phrases, terms, acronyms, organisations and legal jargon that landlords and tenants need to be aware of. This list covers some of the most common terms you may come across, and what they all mean.

Applicant: The individual that is applying to rent the property.

Arrears: Rent that has not been paid on time that the tenant owes to the landlord.

Assured Shorthold Tenancy (AST): This is the most common type of tenancy agreement.  AST’s are typically given for a period of 6 or 12 months but can be for longer. After this initial agreed period, the agreement becomes a periodic tenancy agreement.

Buy-to-Let: A property purchased as an investment property to be let out.

Capital Gains Tax: The tax paid when selling a property that is not a main residence applicable to any profit made on the increase in the property’s price.

Check In: This is the process undertaken at the property at the start of the tenancy and is usually the day the tenant moves in.

Check Out: This is the inspection process at the property at the end of the tenancy, before the deposit is returned to a tenant. This is usually undertaken as soon as the tenant moves out.

CMP (Client Money Protection). A scheme that all letting agents must be part of, that allow a client’s money to be protected, should the agent go bust or misappropriate the funds.

Communal area: A shared living space in a property. These are usually found in a HMO (House in Multiple Occupation).

EPC: An Energy Performance Certificate (EPC) is used to rate the energy efficiency of a property and must be supplied to the tenant on the day of move in.

Eviction: When a tenant leaves a property permanently. This is usually for breaking terms of their tenancy agreement or where the landlord needs to regain use of the property.

Fair Wear and Tear: The natural and fair amount of damage that may occur inside a property, to its furniture, fixtures and fittings. This takes into account the amount of time the tenant has lived in the property. It is damage that is expected to occur over time and is not something the tenant is liable for.

FFHH: Fit For Human Habitation. Under the Homes (Fitness for Human Habitation) Act, landlords of both social and privately rented properties must make sure that their properties meet certain standards at the beginning and throughout a tenancy.

Fixed Term Tenancy: This is a tenancy that has a specific start and end date.

Furnished: A furnished property is rented out with furniture included for use within the property.

Gas Safety Check: A legal check carried out every twelve months by a registered engineer to ensure the provision of gas to the property is safe.

Guarantor: A third party that isn’t listed as a tenant and agrees to keep up rental payments if the tenant falls into arrears.

HHSRS: The Housing Health and Safety Rating System. A list of 29 hazards in a property, set out by the Government, that are considered detrimental to a person’s health.

HMO: A House in Multiple Occupation is a property that is shared by multiple residents that share communal facilities such as a kitchen or bathroom.

HMO Licence: A licence obtained by a landlord from a local council to legally allow the property to be let as an HMO. HMOs with five or more inhabitants from at least two unrelated households and sharing common facilities must be licensed.

Improvement Notice: A notice served by the local authority in order to resolve any hazards in the property that have been reported by the tenant if they have been ignored by the landlord.

Income Tax: The tax paid on any profit made on rent or fees received from your tenants. This is in addition to income from other forms of employment.

Inventory: A report that is prepared before the start of a tenancy to formally document the contents and condition of a property. This report is used in the check out process to compare the condition of the property.

Landlord: A person who lets out land, a building or accommodation.

Legionella:  A bacteria commonly found in water that can cause serious illness. Landlords have a legal duty to assess and control the risk of legionella in their properties, through risk assessments and any necessary measures to reduce the risk of the bacteria.

Letting Agent: The letting agent facilitates the agreement between a landlord and a tenant for the rental of a property.

Managing Agent: A letting agent who also manages the property on the landlord’s behalf.

MEES: Minimum Energy Efficiency Standard that must be reached on the EPC.

Notice: Official confirmation that the tenancy is coming to an end, this can be given by the landlord or the tenant.

Overseas Landlord: A landlord who spends more than 6 months of the year outside the UK and who are subject to Overseas Landlord Tax unless an exemption is approved.

Part-furnished: A property that is let with partial furnishings, these usually include white goods.

PAT test: A Portable Appliance Test ensures that electrical appliances with a plug are safe to use.

Periodic Tenancy Agreement: An AST becomes a “periodic tenancy” if new contracts aren’t signed after the initial fixed-term expires and the same tenant remains in the property. This is otherwise known as a ‘rolling’ contract, which typically runs on a month-by-month period.

Permitted Payments: Payments that can be legally charged to a tenant, under the Tenant Fees Act 2019.

Prescribed Information: Information that must be served to your tenant within 30 days after receiving their tenancy deposit. This includes which scheme the deposit is protected by, contact details for the scheme, reasons the deposit may be held back and how to resolve disputes with the deposit.

Prohibited Payments: Tenant charges that are not legal under the Tenant Fees Act 2019.

Permitted Occupier: A person who is listed on the tenancy agreement as being allowed to live in the property along with the tenant.

Reference: A reference involves a series of checks carried out on a tenant, these include employment checks, credit rating and checks with a tenant’s current landlord.

Rent: This is usually a monthly amount that is paid to a landlord by a tenant in exchange for accommodation.

Retaliatory Eviction: When a landlord evicts a tenant after they have complained about the condition of the home or asked for repairs to be done on the property.

Right to Rent: The legal obligation of landlords to check the immigration status of any tenants that wish to rent their property. Only tenants that are legally allowed to live in the UK, either permanently or temporarily, are allowed to rent a property.

Section 8 Notice: The process used in England and Wales to evict a tenant where a ground for eviction can be proven. For example, not paying rent, excessively damaging the property or breaching the terms of the tenancy.

Section 21 Notice: The process used in England and Wales to evict a tenant without giving a specified reason.

Section 24: A clause of the Finance Act 2015 that states that landlords will be taxed on all rental income, not just profit, and be given the basic tax rate relief (20%) on their mortgage interest from April 2020.

Selective Licensing: Licensing required in certain local authority areas, usually in areas of low housing demand, prevalent antisocial behaviour, poor property conditions, an influx of migration, high levels of deprivation or high levels of crime.

Subletting: When a tenant lets part or all of the property they are renting to someone else. Tenants must get permission from their landlord before subletting a property otherwise legal action can be taken against them.

Tenancy Deposit: This is money paid by the tenant before the tenancy begins. This is taken as a security precaution should a tenant default on payment of rent, or cause any damage during their time as a tenant. This deposit is a maximum of 5 times the weekly rent.

Tenancy Deposit Scheme: There are three Government schemes which protect a tenant’s deposit throughout their tenancy. These are the TDS (Tenancy Deposit Scheme), the DPS (Deposit Protection Scheme) and MyDeposits.

Tenant: The person who lives in the rented accommodation.

The Property Ombudsman: This organisation provides redress should a dispute between a tenant, a landlord or an agent arises.

Unfurnished: This is a rental property that is let with no furnishings, it is up to the tenant to furnish the property during their tenancy term.

Universal Credit: A monthly benefit payment that has replaced Child Tax Credits, Housing Benefit, Income Support, Job-seekers Allowance, Employment ad Support Allowance and Working Tax Credit.

  • APA – Alternative Payment Arrangement. An arrangement set up by Universal Credit to have a claimant’s money sent in a different way than the usual monthly payment.
  • MPTL – Managed Payment to Landlord. A form of APA where a claimant on Universal Credit has the cost of their rent sent straight to their landlord from Universal Credit, rather than the money going to the tenant first to pay to the landlord. This can be requested by the claimant or the landlord.