Jargon Buster for Landlords

Finding your way through jargon and industry terminology can seem rather daunting, especially if you’re a first-time landlord.

We’ve put together a list of common phrases you might hear when letting your property out.

ADR: This stands for ‘Alternative Dispute Resolution’ and refers to independent settlement services provided by Deposit Protection Schemes.

Arrears: If rent is not paid, the money owed is referred to as rent arrears. If a tenant is one month behind on rent, they are “one month in arrears”.

Assured Shorthold Tenancy (AST): This is the default legal category of tenancy in England and Wales. They are usually given for a period of 6 months, after this period, the landlord is able to evict the tenant if required.

BTL: This stands for ‘Buy to Let’ and refers to buying a property to rent it out.

CMP: This stands for ‘Client Money Protection’ and refers to a scheme in which funds are protected should a letting agent misappropriate money they hold. Rest assured, at Open House Cambridgeshire we are registered with Client Money Protect.

Deposit: A deposit is a lump sum taken from the tenant at the start of the tenancy which acts as a financial safety net for any deductions required when the tenancy ends, this deposit must be protected through a Government approved Tenancy Deposit Protection Scheme. Here at Open House Cambridgeshire, we use DPS (Deposit Protection Service) for this matter.

EICR: This stands for ‘Electrical Inspection Condition Report’ and should be carried out by a registered electrician once every 5 years in rental properties as a duty of care.

EPC: This stands for ‘Energy Performance Certificate’ and is a certificate that measures the energy efficiency of a property on a rating scale from A – G. All privately owned properties must have a rating of at least E before they can be sold or let.

Furnished: If a rental property is furnished, then it includes everything needed to live in. Although there is no specific legal definition, this usually includes wardrobes, dining table and chairs, sofas, TV and mattress.

Gas Safety Check: A gas safety check should be carried out annually by a Gas Safe registered engineer. A record of the check should be given to tenants within 28 days of completion or at the start of their tenancy.

Guarantor: More common amongst younger renters, having a someone as a guarantor means that the landlord can legally ask them to pay any rent due if the tenants fail to. There are also guarantor insurance policies now which can be used as an alternative.

HMO: This stands for ‘House in Multiple Occupation’. A property is classed as an HMO if there are shared facilities between members of different families. Different rules and legislation apply to HMOs across different counties within the UK. This is dependent on the local City Council.

How to Rent: How to rent is a guide produced by the Government to help tenants and landlords understand their rights and responsibilities. If you are a landlord, you need to provide tenants with an up-to-date version of this at the start of new tenancies. Most lettings services at Open House include this as standard.

Inventory: An inventory is a documentation of all the contents and condition of a property which is taken before a tenancy begins, this is then referenced at the end of the tenancy to document any changes in its condition. Taking a thorough inventory at the start of the tenancy and ensuring the tenant agrees with it can help avoid disputes at the end of the tenancy.

Joint Tenancy: A joint tenancy is where two or more people rent a property together & are jointly responsible for the items within the AST.

Managing Agent: Another term used to describe a letting agent or other third party responsible for the management of the property. You may find this term referred to in our Full Management service.

Non-Resident Landlord (NRL) Scheme: This is the scheme that landlords living abroad can use to pay tax when renting out a property in the UK.

Notice Period: This is the amount of time that the landlord or tenant must give the other party to end the tenancy.

Occupancy Rights: These rights are included within the tenancy agreement and give tenants the right to occupancy of the property.

PAT: This stands for ‘Portable Appliance Testing’ which is an examination of electrical equipment to ensure it’s safe to use, this should be carried out by a registered electrician. Most professionals recommend that landlords have electrical equipment PAT tested annually or at a change of tenancy.

PCM: This stands for ‘Price per Calendar Month’ and relates to the cost of renting the property on a monthly basis.

Reference Check: Before accepting a tenant we check references from employers, credit agencies and previous landlords to ensure that tenants can afford the property and have a been tenancy reputation.

Section 21: A section 21 notice is the notice a landlord must give a tenant to end the tenancy, this can only be used after the fixed tenancy term ends or if there isn’t a fixed end date.

Smart Meter: A smart meter is an energy meter that records electricity and energy usage in near real time. They are free and can benefit both landlords and tenants.

Sub Let: Sub-letting is where a tenant rents out the property or part of the property they are renting to another tenant. If you are a tenant, you will need approval from your landlord before you can sub-let.

Tenancy Agreement: The tenancy agreement is a legally binding document which details the terms of the rental, this should be agreed and signed to before any tenancy begins. It may also be referred to as a rental agreement.

Tenancy Void: This refers to the time in between tenancies where the property is left vacant, at Abode.

Tenant Fees Act: The Tenant Fees Act is the ban on letting agency fees that became law on 1st June 2019.

The Property Ombudsman: This is a scheme that was set up to allow a mediator to step in where a dispute between a tenant and landlord arises.

Unfurnished: An unfurnished property will usually only include basic furnishings such as carpets, curtains and lighting. The tenant will be responsible for furnishing the property throughout their tenancy.

Valuation: A valuation is a survey or inspection of a property which gives landlord’s an estimate of how much they can rent it out for.

Viewings: Viewings are the tenant’s opportunity to come and take a look around the rental property before deciding whether or not to rent it.

Wear and Tear: Wear and tear is damage to the property caused by day to day living such as worn carpets or small scuffs on the wall. Wear and tear are not allowed to be deducted from deposits.

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