Confused by Property Jargon? Get your translation here

November 25, 2016

Confused by Property Jargon?

Buying, selling, renting or letting a property can be one of the most exciting times in your life, but it can also be one of the most stressful and  confusing! With everything moving at a fast pace, trying to follow the jargon used by solicitors, mortgage providers and estate and letting agents can potentially leave you feeling overwhelmed.

Northwood have put together a comprehensive A to Z list of terms and their explanations in our Jargon Buster here which help to translate some of the jargon that you often hear flying around.We have also listed a few of the most common terms used for both sales and lettings below:

 

LETTINGS

Abandonment – Abandonment is when a tenant leaves the property (usually without notifying the landlord or agent) before the tenancy has ended

Arrears – Money unpaid by the tenant in whole or in part after the due date specified in the tenancy agreement.

Assured Shorthold Tenancy – A tenancy agreement is a legal contract between landlord and tenant. The agreement contains the terms and conditions of a tenancy, such as the duration of the agreement and the rental amount payable by the tenant.

Betterment – The Law does not allow for betterment which means a Landlord cannot expect to have old replaced with new at the tenant’s expense or charge cleaning costs for that are already soiled at the start of the tenancy.

Break Clause – A term in a fixed term tenancy agreement which allows either or both parties the right to terminate the agreement prior to the end of the term.

Check-in -This is the process of moving a tenant into a rental property for the first time. The check-in process should include an inventory which describes in detail the condition of the property prior to the tenant moving in.

Check-out – This is the process of moving the tenant out of the property and includes making sure the property is being returned in the same condition as it was originally let to the tenant at check-in, subject to fair wear and tear.

Deposit (lettings) – A sum of money usually equal to 4 – 6 weeks rent to ensure a tenant complies with the terms of their tenancy agreement.

Deposit  Protection Schemes – These government-backed schemes ensure the tenant gets their deposit back if they meet the terms of the  tenancy agreement; don’t damage the property; and pay the rent and bills.

Energy Performance Certificate (EPC) – This is a legally required assessment of how energy efficient a residential property is.

Extension or renewal of tenancy – This is where a tenancy due to come to an end can be extended or renewed with the consent of both the landlord and the tenant.

Fair Wear & Tear – There is no legal definition of “fair wear and tear”. It is subjective and depends on a number of factors. Essentially, it is the amount of damage or deterioration that can be reasonably expected in all the circumstances.

Gas Safety Certificate –   a legal requirement for making sure that a Gas Safe registered engineer checks the gas appliances  every 12 months and provides a gas safety record. The record confirms the gas appliances have been checked and are safe.

Guarantor – someone who promises to pay the mortgage or rent if the tenant or mortgagee  can’t or won’t for any reason. This guarantee is legally binding.

Ombudsman – An independent professional body which is set up by law to help settle individual disputes between consumers and firms

Statutory Periodic Tenancy – If at the end of a fixed term tenancy, neither party does anything and no further agreement is made, the tenancy will automatically run from one rent period to the next on the same terms as the preceding fixed term assured shorthold tenancy

Void Period – The time when a rental property is unoccupied and no rent is received – a Landlord’s biggest worry.  Void periods can be negated using Northwood’s Guaranteed Rent scheme.

 

SALES

APR (Annual Percentage Rate) – The total cost of a loan, including interest charges and product fees, shown as a percentage rate. APR is an industry standard calculation and enables direct comparison of mortgages from all lenders

Bridging Loan / Bridging Finance – A temporary loan advanced to help somebody buy a new property before they have sold their existing one.

Completion – End of the purchase process. The seller moves out, the buyer moves in and ownership is transferred once the money is paid to the seller.

Conveyancing – The process of transferring property from one party to another, usually managed by a solicitor or a licensed conveyancer.

Deposit (sales) – Sum of money which the buyer puts down to secure the mortgage loan after exchange of contracts, usually 5 to 10 per cent of the purchase price.

Disbursements – All the various costs for carrying out the legal work in relation to buying or re-mortgaging your home such as searches other than the legal costs.

Exchange of contracts – The point at which both buying and selling parties sign their copies of the contract which are exchanged by their respective legal representatives and are legally binding

Fixtures and Fittings – Non-structural items included in the purchase of a property ranging from curtains to white goods and disclosed in the fixtures and fittings list.

Home Buyers Report – This is an intermediate-level survey which is usually offered by the mortgage lender and prepared by their own surveyor.

Informal Tender – Requires competing buyers to submit their best bids by a specific time and date. It is not a legally binding contract and the vendor is at liberty to accept a higher offer at any time

Joint Tenants – A form of ownership frequently used by couples which ensures that when one dies, the property passes automatically to the other.

Loan to Value (LTV) – The amount of mortgage expressed as a percentage of the property value.

Multiple Agency – This is when you employ the services of more than one agent.

Redemption Figure – The amount required to discharge your outstanding mortgage at a fixed point in time.

Sold Subject to Contract (STC) – This term refers to the fact an offer has been accepted by the vendor and that a sale is proceeding. It means the same as ‘Under offer’ or ‘Sale agreed’

Stamp Duty Land Tax – A tax you must pay on a property when you buy it. The duty must be paid at the point of completion.

Tender – This is an arrangement whereby prospective purchasers are invited to submit sealed bids by a previously stated date and time.

Under Offer – A term applied to a property for which the seller has provisionally accepted the buyer’s offer subject to contract.

Vendor – The seller of a property or piece of land.

 

If you cant find the exact term that your are looking for click through for the full list of property-related jargon terms used.

 

Northwood is one of the largest and most recognised estate agents in the U.K. and the leading supplier of Guaranteed Rent to give landlords complete peace of mind.

Find us on Twitter @northwoodUK or visit our YouTube channel 

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