If you are new to renting property, or this is your first time renting in the UK, you may be a little overwhelmed with some of the terms that are used. From bankers drafts to guarantors, it can be a linguistic minefield and ensuring you know exactly what your rights are, and what you are signing up for is key. Here is the D&A Group tenancy dictionary, bringing you some of the words you are likely to come across that may be a little perplexing!
Banker’s Draft
Banker’s drafts and cheques are similar in the way that they are deposited, but different in the way that they are issued. A draft is prepaid and issued via the bank whereas a cheque is not prepaid. They are often used for larger amounts of money and in circumstances when a cheque is not accepted such as when putting down a deposit on a rental property.
Client Money Protection Insurance
Otherwise known as CMP, this insurance product is designed for letting agents. It protects the money that you pay to the agent that is then passed onto the landlord such as a deposit and rent. As of the 1st of April 2019, letting agents are required to hold valid CMP insurance.
Council Tax
This is a tax that is levied on households by the local authority, or council. It is based on a number of factors including location, property value, and the number of people residing there. Some landlords ask that the tenants pay directly, others include the fee in the monthly rental fee. A property is only exempt from council tax if it is completely occupied with full-time university or college students.
Credit Check
Landlords and letting agencies may request a credit check from prospective tenants. This allows them to have some certainty that the tenant can and will pay the rent and does not have a history of failing to meet financial obligations. A landlord may also ask for references from previous landlords to help verify their reliability.
Deposit
A deposit is a sum of money (usually one or two months rent) that you give to the landlord to secure the tenancy and also gives the landlord security should you not pay your rent, or cause damage to the property. The law in England and Wales states that the landlord must put your deposit in a government-backed tenancy deposit scheme (TDP). Doing so ensures that the deposit is returned within 10 days after agreeing how much will be given back and it also protects the money should there be any dispute, until the issue is resolved. There are three types of scheme- Deposit Protection Service, MyDeposits, and the Tenancy Deposit Scheme.
Energy Performance Certificate
As of 2018, landlords are required to ensure that their property reaches a minimum of an Energy Performance Certificate rating of E before accepting tenants. This means that the property meets standards of energy efficiency and environmental friendliness as required by law. The certificate that is issued is valid for a period of 10 years so be sure to check before you sign.
Fixture and Fittings
Whilst there is not a specific legal definition for fixtures and fittings, they are generally understood as follows: fixtures are any items that are bolted or fixed to the floor or walls, and fittings are any items that are free standing or hung by a hook or nail. For example, a fixture would be a a part of the built-in kitchen cupboards, and a fitting would be a carpet or washing machine.
Guarantor
Landlords will often ask for a guarantor when accepting tenants. This individual must be between 18-75, a UK resident and someone with a good credit history. Their role is to guarantee that if you fail to meet your financial obligations, they are able to do so instead.
Gas Safety Regulations
These regulations were updated in April 2018 following initial legislation from 1998. They require landlords to ensure that any gas appliances and gas fittings in a property are up to date with checks and safe. These checks should be undertaken periodically- every 12 months and the landlord is then responsible for any repairs that are required to ensure the property is safe. Prospective tenants should always ask to see the most recent Gas Safety Certificate which is valid for 12 months, and they should ensure that the landlord stays up to date with his obligations.
Notice Period
The notice period is a specified amount of time that you have to inform your landlord if you wish to end the contract or vacate the premises. This also applies to if a landlord wants you to leave the property. Unless specified in the contract, the law states that with a monthly contract the notice period is 1 month, and with weekly contracts it is four weeks. Not adhering to a notice period would usually constitute as a breach of contract and result in penalties.
Renewal
If you signed to rent for a fixed term such as 12 months, you will need to sign a new agreement, stay on and move to a rolling tenancy, or move out at the end of the contract. If no discussion takes place with the landlord before the end of the tenancy and it ends, you are entitled to stay on a month-by-month basis and you are eligible for a one month notice period for both you and the landlord. If your landlord wants you to leave at the end of the tenancy, he must give you at least two months written notice.
Standing Order
A standing order is a payment that it set up to go from your bank account to another bank account at the same time each month/week, for the same amount. It will remain in force until you cancel it or the predefined period of time elapses. This is one of the most popular ways to pay rent in the UK.
Subletting
This is when a tenant rents a room or the whole property that they are renting from the landlord. In most cases, they will require the permission of the landlord before doing this. You should always ask to see the contract between the person you are subletting from and the landlord, before you agree to sublet.
Tenancy Agreement
The most popular type of tenancy agreement in London and the UK is an assured shorthold tenancy. This applies to private properties and those individuals that rent either the whole property or just a room, as long as the annual rent does not exceed GBP100,000. This type of agreement will specify a term and rental value that cannot be raised. It will also require the landlord to put your deposit in a deposit protection scheme and it provides for monthly rolling contracts in the case where a landlord doesn’t give notice at the end of the agreement.
Wear and Tear
Wear and tear is defined as “reasonable use of the property by the tenant and the ordinary operation of natural forces’. This means that damage that occurs due to age and reasonable use, is not liable to be paid by the tenant at the end of the tenancy period.
Whilst we hope that this dictionary may help to provide a little clarity for you, don’t forget that we are here and on hand to help you through the entire process. We speak your language and our team of experts can assist in making sure that you are clear and that your potential landlord is abiding by their requirements as well.
