Whether you are new to or an old hand at letting property, some of the jargon that comes with the territory of being a landlord can be confusing.
We have put together a handy jargon buster to help you get to grips with the terminology that you are likely to come across and will need to understand.
The small print…
The content we have provided in this blog is for information purposes only. You should seek independent and professional advice before letting (or renting) a property or buying financial products.
AST = Assured Shorthold Tenancy and is the most common type of tenancy agreement when renting from a private landlord or letting agent.
BTL = Buy to Let and refers to buying a property to rent it out.
CMP = Client Money Protection and refers to a scheme whereby funds are protected should a letting agent misappropriate any money they hold.
EICR = Electrical Inspection Condition Report, which should be carried out by a registered electrician once every five years in rental properties as a duty of care.
Furnished – if a rental property is furnished, then it includes the major appliances and furniture needed to live in it. There is no official or legal definition however furnished usually includes major kitchen appliances, a sofa and dining table and chairs for the living space, a bed and bedroom furniture (such as a wardrobe or chest of drawers) and all fixtures and fittings (such as lighting, carpets and curtains).
Guarantor – a person who acts as a guarantor to a tenant and becomes bound to the tenancy agreement, which entitles the landlord to legally request the Guarantor to pay rent if the tenant fails to.
How to Rent – a government guide that helps landlords and tenants understand their rights and responsibilities. Landlords must provide tenants with an up to date version of the How to Rent guide at the start of a tenancy.
Joint Tenancy – where two or more people rent a property together and are jointly responsible for the tenancy agreement.
Kerb appeal – refers to how good the exterior of a property looks. This can include things like the guttering, paint, front garden and windows. A property with good ‘kerb appeal’ can make a better first impression with prospective tenants.
Letting agent – we like to think we are the definition of a letting agent! A letting agent is paid by a landlord to find suitable tenants on their behalf. Their responsibility is to advertise the property and reference check applicants, with the landlord making the final decision on who can move in. If the letting agent isn’t also employed as the ongoing managing agent (see below), once the successful tenant is living in the property, the letting agent will no longer be involved, which means if the tenant requires help with repairs or maintenance, they must contact the landlord directly.
Managing agent – also referred to as a property management company (we like to think we are the definition of that too!), a managing agent is a third-party company that, after the process above is followed, is retained by the landlord and is responsible for dealing with repairs, maintenance, tenancy renewals, rent collection and any other issues the landlord may have.
Non-Resident Landlord (NRL) scheme – if you are a landlord who is living outside the UK for over six months of a tax year, you must join the Non-Resident Landlord scheme. This means that letting agents or tenants must pay tax on rents due to the landlord.
Notice period – the amount of time that a landlord must give the tenant (or vice versa) to end the tenancy.
Occupancy rights – included within the tenancy agreement, occupancy rights give tenants the legal right to live in the property.
PAT = Portable Appliance Testing and is an examination of electrical equipment to ensure it is safe to use. PAT should be carried out by a registered electrician. Most professional letting agents recommend that landlords carry out PAT annually and at the change of a tenancy.
PCM = Price per Calendar Month and relates to the cost of renting the property on a monthly basis.
Section 21 notice – a legal notice that a landlord gives a tenant to start the process to end a tenancy agreement.
SDLT = Stamp Duty Land Tax (often referred to as just ‘Stamp Duty’) and is a tax paid on any property or land purchased over a certain price.
Sublet / subletting – where a tenant lets a property (or part of a property) to another tenant. As a landlord you must give tenants approval to do this.
Tenant Fees Act – introduced in England on 1 June 2019, the Tenant Fees Act bans most letting fees and caps tenancy deposits paid by tenants.
Unfurnished – if a rental property is unfurnished, the property will usually only include basic fixtures and fittings (such as lighting, carpets and curtains). The tenant will be responsible for furnishing the property throughout their tenancy.
Valuation – a survey or inspection of a property that gives landlords an estimate of how much they can let the property for.
Viewings – the tenant’s opportunity to take a look around the rental property before deciding whether or not to rent it.
Wear and tear – damage caused to a property by day to day living, such as worn carpets or small scuffs on the wall. The cost of ‘wear and tear’ cannot be deducted from tenant deposits.