May, 2023
From deposits to accidental landlords, there are many terms within the process of letting a property that you may have never come across before. Don’t worry as you are not on your own with this. Your Naylor Powell agent is there to guide you every step of the way to make sure you fully understand the process.
We love this handy list from PropertyMark with many of the most commonly used terms in the industry simply explained.
(For the full article visit https://www.propertymark.co.uk/professional-standards/consumer-guides/estate-agency-terms.html)
ACCIDENTAL LANDLORD
A property owner whose initial intention was not to rent out the property. This can occur when someone struggles to sell their property or have inherited one.
ADDITIONAL LICENSING (ENGLAND AND WALES)
HMO licensing which covers a specific area or whole district of properties that do not require a mandatory HMO licence. This usually occurs when a local authority believes HMOs are not being managed correctly.
ALTERNATIVE PAYMENT ARRANGEMENT (APA)
An arrangement set up by Universal Credit to have a claimant’s money sent in a different way than the standard monthly payment.
CAPITAL GAINS TAX
Tax landlords pay when selling a property that is not their main home, applicable to any profit made on the increase in the property’s price.
CLIENT MONEY PROTECTION (CMP)
Reimbursement schemes which all letting agents in England, Wales and Scotland must belong to. They protect the agent's client money whilst it is being held by the agent. This is so that in the unlikely event that the agent goes bust or misappropriates the funds, landlords and tenants can apply for their money back through the CMP scheme. All Propertymark Protected members are covered by CMP.
ENERGY PERFORMANCE CERTIFICATE (EPC)
A document outlining a property’s energy use, typical energy costs and recommendations on how to reduce energy usage and save money. A copy of the EPC must be given to the tenant, failure to provide one will mean a landlord cannot serve a Section 21 to evict a tenant.
EVICTION
When a tenant must leave a property permanently, usually for breaking a term of their tenancy agreement. Evictions commonly occur when tenants do not pay rent or if the landlord needs to regain use of the property.
EXCLUDED OCCUPIER
A form of tenant with certain rights, who lives and shares accommodation with their landlord or a family member of the landlord.
FAIR WEAR AND TEAR
The natural deterioration that is reasonably expected to occur to a property's furniture, fixtures and fittings over time. It takes into account the length of tenancy and number of tenants living in the property. It is not something the tenant is liable for when deductions to a tenant's deposit are considered at the end of the tenancy.
HOUSE IN MULTIPLE OCCUPATION (HMO)
A single property with at least three people who are not from the same family ('household') and share certain facilities such as a kitchen.
HMO LICENSING
A local authority (council) licence obtained by a landlord to legally allow their property to be let as an HMO. Landlords in England and Wales should ask their local authority whether they need a licence. In England, HMOs with five or more inhabitants from at least two unrelated households who are sharing common facilities must be licensed. In Wales, HMOs three or more storeys high with at least five tenants from two or more households must be licensed. Northern Ireland and Scotland require licences on every HMO property.
HOUSING HEALTH AND SAFETY RATING SYSTEM (HHSRS) (ENGLAND AND WALES)
A list of 29 property hazards considered detrimental to a person’s health as set out by the Government. If a property contains one of the hazards, a landlord will be served a notice of varying degree to improve the property or risk prosecution, a fine or being unable to evict a tenant.
IMPROVEMENT NOTICE
A notice served by a local authority for a landlord to resolve any hazards in the property.
INCOME TAX
Tax paid by landlords on any profit made from rent or fees. This is in addition to income from other forms of employment.
LEGIONELLA
A bacteria commonly found in water that causes serious illness. Landlords have a legal duty to assess and reduce the risk of legionella in their properties through risk assessments and taking necessary measures.
LETTING AGENT CODE OF PRACTICE (SCOTLAND)
The rules by which letting agents operating in Scotland must follow. This includes how they work with landlords, property management, and communications. This also places a duty on letting agents to inform their landlords where their property legally requires a licence.
LODGER
Someone who lives in a property with a resident landlord. They may or not share living space with the landlord (and their family), which will affect whether they are considered an 'excluded occupier' and their subsequent rights as a tenant.
MINIMUM ENERGY EFFICIENCY STANDARDS (MEES) (ENGLAND AND WALES)
The standard of energy efficiency a property must meet in order to be let, the minimum standard is defined by the energy rating on the property's Energy Performance Certificate (EPC).
MESNE TENANT
A tenant who is leasing to a subtenant. They are essentially the landlord of the subtenant in this scenario but will still have to answer to the landlord who owns the property (known as the head landlord).
MANAGED PAYMENT TO LANDLORD (MPTL)
A form of Alternative Payment Arrangement (APA) where a claimant on Universal Credit has their rent sent straight to the landlord. This arrangement can be requested by the claimant or the landlord.
PRESCRIBED INFORMATION
Deposit information which a landlord must serve to their tenant within 30 days (in England and Wales) of having received their deposit. In Scotland, this must be given to the tenant within 30 working days of the tenancy start date. The information includes which scheme protects the deposit, their contact details, reasons the deposit may be held and how to resolve deposit disputes.
PERMITTED PAYMENTS (ENGLAND AND WALES)
The payments which a landlord or letting agent can legally charge to a tenant, as defined under the Tenant Fees Act 2019 and the Renting Homes (Fees etc.) (Wales) Act 2019. They include rent, tenancy deposit, holding deposit and utilities but do differ slightly between England and Wales.
PROHIBITED PAYMENTS (ENGLAND AND WALES)
Illegal charges under the Tenant Fees Act 2019 and the Renting Homes (Fees etc.) (Wales) Act 2019. They include cleaning, admin, gardening and referencing fees.
PROPERTY PORTAL
A specialist website which lists properties available to buy or rent from a range of sources. Examples of property portals include Rightmove, OnTheMarket and Zoopla.
RENT SMART WALES
The Welsh Government’s licensing scheme for landlords and letting agents. All landlords leasing properties in Wales must be registered and licensed by this scheme.
RESIDENT LANDLORD
A landlord who lives in the property with the tenant or lodger they let to.
RETALIATORY EVICTION
When a landlord evicts a tenant having received a complaint about the property's condition, or for repairs to be carried out. Landlords who are subject to complaints cannot issue an eviction notice until six months after receiving an Improvement Notice to remedy any reported disrepair.
RIGHT TO RENT (ENGLAND)
A landlord's legal obligation to check the immigration status of any tenants who 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 (ENGLAND AND WALES)
The process used to evict a tenant where a ground for eviction can be proven, e.g. not paying rent, excessive damage the property or illegal activity.
SECTION 21 NOTICE (ENGLAND AND WALES)
The process used to evict a tenant without giving a specified reason. In Deember 2019, the Government announced the Renters’ Reform Bill which will abolish the use of ‘no fault’ evictions by removing Section 21 of the Housing Act 1988.
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 per cent) on their mortgage interest from April 2020.
SELECTIVE LICENSING
A license landlords must obtain to legally operate in certain local authority areas. Selective Licensing usually occurs in areas of low housing demand, prevalent antisocial behaviour, poor property conditions, an influx of migration, high levels of deprivation or crime. Its aim is to ensure that properties are safe to inhabit and that the landlord is managing the property correctly.
SUBLETTING
When a tenant lets part or all of the property they are renting to someone else (a subtenant). Tenants must get permission from their landlord before subletting a property, otherwise legal action can be taken against them.
SUBTENANT
A tenant who is leasing from a mesne tenant, who is subletting a property.
TENANCY DEPOSIT PROTECTION
The legal requirement for all landlords to register a tenant’s deposit with a Government-approved tenancy deposit scheme. Failure to do so can result in difficulties over eviction or having to pay back three times the deposit amount to the tenant.
UNIVERSAL CREDIT
A monthly benefit payment that has replaced Child Tax Credits, Housing Benefit, Income Support, Job-seekers Allowance, Employment and Support Allowance and Work Tax Credit.
UTILITIES
Services provided to a home such as gas, electric, water, phone-line and broadband.
