Glossary of Key Words
– A legally binding contract agreed between client and agency, signed once the client has decided they want that agency to sell their house. Agents must also suggest that the client seeks legal advice as well before signing.
– A clause within a tenancy agreement made between the tenant and the landlord, that allows either party, or both, to end the agreement early.
– Used as a short-term solution for funding, in essence they close the gap between you buying a new house and selling your previous one. Another time in which a bridge/bridging loans can be used is in auction purchases. This is because money will be needed upfront, however, again, your property may not yet be sold.
Buy to Let
– A phrase describing properties which are purchased with the intention of renting them out, as oppose to living in them.
– The process which involves the agreement of the condition of a room/property. When you first move into rental accommodation, you will be provided with an inventory. The tenant then reads the list of items provided and their condition, and agrees to this. The check-out process then happens at the end of the tenancy agreement. Any damage or missing items beyond reasonable wear and tear will be deducted from your deposit.
Deposit (Damage Deposit)
– A sum of money agreed between the tenant and the landlord, (or agent), to be paid before moving in. The amount is usually dependant on the monthly rent cost, and covers any potential damage made, which will then be deducted from the deposit on check-out. Any remaining deposit/all of the deposit will then be paid back to the tenant.
Deposit (Mortgage Deposit)
– A sum of money paid as a first instalment on the purchase of a property, with an intention to complete the rest of the payment, usually with an agreed financial arrangement from a creditor.
– Abbreviation standing for the Deposit Protection Scheme. This scheme is used by us here at Abode in Norwich. It protects the deposits of our tenants, keeping their money safe until they leave the property.
– The amount remaining after deducting any balance outstanding from your current mortgage away from the current market value of the property.
– A sum of money paid for certain services provided by an estate agency. One example of this is for instance in terms of renting, are an administration fee for tenants, to have their details processed and tenancy agreements drawn up. In regards to sales, a fee can refer to the amount of money, (usually a percentage of the price paid by the buyer), charged for selling the property.
– A property in which the owner has permanent, outright ownership of, as well as every part of the land, giving them free choice to do as they wish with it. (Subject to only other’s rights and interests such as leaseholders, neighbours and local regulations.)
– Usually a family member or close friend, who agrees contractually to cover outstanding rent or arrears, should a tenant fail to do so.
– A document that contains a written list of the entire contents within the property and the condition they are currently in. This is used for monitoring any damage caused by tenants and used as proof, should any money need to be deduced from the deposit.
Joint Sole Agency
– A situation in which two agents work together to represent a seller, with no other agent being instructed during the joint sole agency period.
– A mortgage with more than one borrower within the agreement. Both/all borrowers within the agreement are liable for the repayments, even if one or more do not currently live in the property, (move out).
– A document issued by the land registry which is proof of ownership with no mortgage for the owner.
– A person who lets out land, a building or accommodation, (a room), in exchange for payment.
– A register of who has ownership of land and of property in England and Wales.
– An agreement in which a lease is obtained from the freeholder, (can be referred to as landlord in some cases), to use building/land. Often, this is a long term arrangement of 40 years or more. When leasing a property, any major changes usually must be agreed by the freeholder.
– A charge which is paid to the owner of a home in order to keep up the standard of a property. It can be used to repair broken items, or replace items that have a little too much wear and tear!
– A legally binding agreement with a lender, (usually a bank or building society), that provide a debtor with funds in order for them to secure real estate. This real estate is then used as collateral, as the agreed payments are made over a specific time scale.
– When the seller’s outstanding mortgage is a greater value than that of the property, and therefore the money from the sale of the property is insufficient to pay off the mortgage.
– A calculated percentage, formed by using the cost of the property or the market value of a property, divided by the income generated by the property. Then minus the annual expenses and you will end up with the net yield.
– The checking by a lettings agency on a landlord’s behalf of a potential tenant. This usually includes contacting a tenant’s current employer, a previous landlord, or financial statements.
– The regular payment to a landlord, agreed for the use of their property or land.
– A term used from a legal perspective to describe money unpaid and overdue rent to a landlord or agency.
Right to Rent Checks
– A legal requirement for all private landlords, which involves either the landlord or the agency on behalf of the landlord to conduct basic checks on a tenant prior to moving in. The 4 basic checks include:
- Checking the new tenant(s) will be using the property as their only home or main home.
- Requesting to see the original documents that confirm the tenant has the right to be living in the UK.
- These documents should be checked with the tenant present.
- In order to keep record of this, the original document should have copies made from and the date of the check needs to be recorded.
– When an offer on a property has been made and accepted and a booking deposit may have been paid. When purchasing a property, this is the first official step.
– Paid to HMRC, (Her Majesty’s Revenue and Customs), this is a tax paid when land or property interests and with the creation of leases. The amount is paid when the sale is completed. The higher the value of the property, the higher the percentage of tax will be. This tax is also to be paid if you purchase a second home, or a buy to let property, which is currently stands at a 3% additional charge.
Subject to Contract
– When an offer has been made to purchase the property, however, nothing is legally binding for the buyer or the seller until the contracts themselves have been signed and exchanged.
– The current occupier of a land or property, in which they are renting from a landlord.
– A contract between a tenant and a landlord which outlines the rights and standings of both parties. It includes rent payments and the conditions of the tenancy of the property which must be met by the tenant.
– The seller of the property.