Real Estate Terms & Jargon

Professional association for letting agents which operates code of practice and bond scheme that protect the clients of ARLA members.

Where a formal written complaint is made against a Member Firm, any such complaint will be considered against the guidance contained within this Code of Practice combined with the Association’s byelaws, plus any relevant statutory approved codes, applicable legislation and taking account of lawful obligations and/or responsibilities set out in the pertinent Terms of Business or the Tenancy Agreement. A Member Firm following these practices, complying with the byelaws, the law and fulfilling contractual obligations etc is therefore unlikely to be found to have acted without reasonable competence. Although it is for each practitioner to decide on the appropriate procedure to be followed in any particular circumstance. Where a Member Firm has not complied with this Code of Practice or statutory or contractual obligations mentioned above, it would be expected to justify such departures in the light of any complaint. Aims of this Code of Practice: To help to ensure that clients, customers and staff of Member Firms are aware of the expectations of standards of service that ARLA Member Firms strive to provide. To help to maintain and enhance the reputation, standing and good name of ARLA and its membership by protecting the public against fraud, misrepresentation and malpractice in the lettings industry. To help to ensure that there is a positive differentiation between ARLA Member Firms’ service standards and other letting agents. Copy available from the ARLA website.

An assured shorthold tenancy is a kind of assured tenancy which offers the landlord a guaranteed right to repossess his property at the end of the term. Tenancies set up after 28 February 1997 can be for any length of time the landlord wishes to offer. The assured shorthold has the following important features:

* the tenant is an individual
* the dwelling is let as separate accommodation
* the dwelling is the tenant's main or principal home

There are a number of important exclusions (i.e. tenancies that cannot be assured or assured shorthold): · Lettings to companies · Lettings at no rent, low rent or high rent (over £25,000 per annum) · Holiday lettings · Tenancies granted by a resident landlord (a landlord who lives in the same property as the tenant) Tenancies in the excluded categories above will generally be known as 'common law' or 'contractual' tenancies and an assured shorthold tenancy agreement will not be suitable.

This is a clause sometimes inserted in a fixed term tenancy, typically if the initial fixed term is for a year or more. A break clause will usually be worded in such a way as to allow either landlord or tenant to give two months written notice at any stage after a particular date or period of the tenancy, thus terminating the tenancy earlier than the end of the original fixed term.

Buying a residential property for letting.

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Form of tenure created by Commonhold and Leasehold Reform Act 2002 in which leaseholders in a property jointly hold the freehold through an association.

The process of buying or selling a property.

The Confederation for the Registration of Gas Installers . Corgi have a register of competent gas installers, it is a legal requirement for businesses and self-employed people working on gas fittings or appliances to be included in this register.

A standard deposit is usually 6 weeks. This is held by the agent as stakeholder and released at the end of the tenancy. It is not usually released until both parties are in agreement.

It is illegal for a landlord to evict a tenant without a court order. The Protection from Eviction Act 1977 also protects tenants against being forced to leave a property through harassment. This includes threats, physical violence, or withdrawal of services such as disconnecting utilities or refusing to carry out vital repairs.

Point within conveyancing process at which the agreement between a property buyer and seller for transfer of title becomes binding in law subject to penalties for non-completion.

Normally referred to all electrical and mechanical goods attached to a property. These are normally attached to the house and deemed to be part of it.

A British name for an apartment

Indefinite ownership of a property as opposed to a leasehold which is for a fixed period.

From July 2006, it will be mandatory for house sellers to prepare a Home information pack before they can start marketing their property. The packs will contain the terms of sale, evidence of title, standard searches, planning consents and building control certificates, property information and fixtures and fittings forms, copies of guarantees and warranties, a draft contract, and Home condition report including an energy efficiency assessment.

Houses in multiple occupation are those occupied by a number of people who do not form a single household. Typically students, where tenants have separate rooms but share facilities such as bathrooms and kitchens. Special rules apply to HMOs and these are set to become more stringent when relevant sections of the Housing Act 2004 come into effect. These will introduce a new, more precise definition of what constitutes an HMO and will require licensing of larger HMOs in England (licensing already applies in Scotland).

This is an absolutely essential document that provides a written benchmark, which should be amended, updated and recreated before the beginning of each new tenancy. A properly constructed Inventory/Schedule of Condition details the fixtures and fittings and describes their condition and that of the property generally. Landlord and tenant often share the costs involved in preparing and checking the inventory; such costs should be seen as a necessary investment that helps protect the interests of both landlord and tenant.

Mostly, where there is to be more than one (adult) person living in the property, the tenancy will say they are “jointly and severally” responsible. This expression means that, jointly, the tenants are liable for the payment of all rents and all liabilities falling upon the tenants during the tenancy, as well as any breach of the Agreement. Individually each tenant is responsible for payment of all rent and all liabilities falling upon the tenant, as well as any breach of the Agreement until all payments have been made in full.

UK's Official registry of property titles. The Land Registration Act 2002 which came into effect in October 2003 gives owners of registered property greater protection against squatters.

The name given to the owner of a property in rentals.

Ownership of property for a fixed term granted by la ease. The lease sets out details of rents and obligations such as repairs.

British say lettings which also means rentals.

The largest professional body in the UK. With over 10,000 members. Committed to raising standards and benefiting all in the moving process.

A Government backed scheme for all letting and letting management agents. Defines standards of customer service, and ensures that necessary insurance is in place to protect clients' money. Also has a customer complaints procedure.

A scheme for taxing the UK rental income of non-resident landlords. The scheme requires UK letting agents to deduct basic rate tax from any rent they collect for non-resident landlords. If non-resident landlords don't have UK letting agents acting for them, and the rent is more than £100 a week, their tenants must deduct the tax. When working out the amount of tax the letting agent/tenant can take off deductible expenses. Letting agents and/or tenants don't have to deduct tax if the Inland Revenue tells them not to. The Inland Revenue will tell an agent/tenant not to deduct tax if non-resident landlords have successfully applied for Approval to receive rents with no tax deduction. But even though the rent may be paid with no tax deducted, it remains liable to UK tax. So non-resident landlords must include it in any tax return to the Inland Revenue. Retails of the scheme are available from the Inland Revenue website.

There are specific legal obligations and responsibilities on a landlord with regard to Fire safety for Furniture & Furnishings; Gas supply and appliances; plus Electrical wiring and appliances

Government tax payable for all transactions over £60,000. The Duty is 1% of the value of the price of property being transferred up to properties priced at £250,000. Then it raises to 3 per cent for those priced between £250,001 and £500,000, and 4 per cent above £500,000. Stamp duty of 1 per cent is also payable on leases and rental agreements of seven years or less where the annual rental is £5,000 or more.

The TDSRA scheme is to resolve deadlocked tenancy disputes over the apportionment and settlement of deposits following the end of a tenancy. When the letting agent is holding the deposit but cannot negotiate a settlement between landlord and tenant, all details of the dispute, along with the deposit money that cannot be settled, will be sent to the Independent Case Examiner for the Scheme. This will then be subject to expert third party adjudication and the apportioning of deposit money.

A tenancy agreement is a legally binding contract between a landlord and tenant that sets out both the legal and contractual responsibilities and obligations of the two parties. It should be written in plain and intelligible language and its terms and clauses should be fair and balanced, taking account of the respective positions of the parties and should not mislead about legal rights and responsibilities. Landlord and tenant should take care to individually negotiate any particular terms or conditions that are important to them or especially relevant to the particular let or property.

It is a scheme to provide security for deposit monies, and speedy dispute resolution in those cases where agreement cannot be reached between Landlord and Tenant at the end of a tenancy.

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