Rental Resolution: Learn a New Language

It can sometimes feel like the language of residential property law is as complex and confusing as Mandarin – and it certainly changes a lot more frequently!

However, whilst getting muddled on holiday might lead to a red faced and a bemused waiter, failing to carry out the proper rental regulations can land you in some serious hot water!

So, before you dust off the ‘Teach yourself Spanish in ‘Cinco’ easy steps!’ book, check out our property jargon guide and make sure that whether you're letting ,buying or selling this year, you'll be fluent in whichever language you need!

A

• Agent : Someone acting on behalf of the landlord who may be involved in the letting, rent collection, management
• Annual Percentage Rate (APR): The annual rate that is charged for borrowing or made by investing money. It is expressed as a single percentage number that represents the actual yearly cost of funds over the term of a loan. This includes any fees or additional costs associated with the transaction.
• Appraised Value: The value of a property as estimated by a surveyor.
• Appreciation: Appreciation is the increase in value of a property over time due to inflation and supply and demand.
• Arrears: Money left unpaid by a tenant after the date given in the tenancy agreement
• Arrangement Fee: A fee charged by lenders for a specific mortgage product.
• Asking Price: A price at which a seller hopes to sell their property.
• Asset: Any form of property owned by a person.
• Assignment: The transmission of ownership of an insurance policy or lease.
• AST (Assured Shorthold Tenancy): The most common form of tenancy arrangement. An assured shorthold tenancy offers the landlord a guaranteed right to repossess his/her property at the end of the term stated in the tenancy agreement.
• Auction: The sale of a property to the individual or party that bids highest.

B

• Break Clause: A break clause will usually 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.
• Bridging Loan: A short term loan normally used to cover or 'bridge' the overlap between the purchase of a new property and the sale of an old one.
• Building Survey: A full inspection of a property, conducted by a registered surveyor who will generate a detailed report setting out the situation of a property and any defects.
• Buying off Plan: When an individual buys a property based only on what they can see on the building plans.
• Buy-to-Let Mortgage: A type of mortgage specifically designed for people buying a property with the intention of letting it out. Applicants are now subject to the same level of testing as residential mortgages.

C

• Capital: The amount of money either put into buying a property or the deposit placed on a property. Also known as equity.
• Chain: The situation that occurs when a buyer is reliant on completion of the sale of an existing property in order to complete on the purchase of a new property.
• Commission: The estate agent's fee that is taken for selling a property.
• Completion Date: The completion date is the day on which money is transferred from the buyer's to the seller's solicitor. It is the date that the buyer becomes the legal owner of the property.
• Completion: When the transfer of the property title is legally given to the new owner. This is the final stepin a sale.
• Conditions of Sale: The fine points that determine the privileges and duties of the seller and buyer.
• Conveyancer: A qualified individual such as a solicitor or licensed conveyancer who deals with the legal aspects of buying or selling a property.
• Conveyancing Fee: The fees incurred and charged by your solicitor or conveyancer for supervision of the sale or purchase of your home; including the fee for their time plus any additional charges incurred for Land Registry or Local Authority Searches.
• Council of Mortgage Lenders (CML): The Council of Mortgage Lenders devised the Mortgage Code to ensure lenders treat customers fairly and reasonably.
• Council Tax: A local authority tax, which is usually the responsibility of the resident to pay, except in the case of HMO’s where the responsibility usually falls to the landlord.
• Covenants: Rules and regulations governing a property, contained in its Title Deeds or Lease.

D

• Deeds Release or Discharge Fee: The fee charged by lenders at the end of a mortgage term to cover the organisational costs of transferring the property ownership documents to the borrower.
• Deeds: A formal legal document that clearly lays out the parties to the deed. It is carried out with a suitable attestation clause and signed in the presence of an independent witness.
• Depreciation: A reduction in the value of an asset with time.
• Deposit: A pre-agreed amount money held by the landlord or agent for security against damage to a property. The Tenancy Deposit Scheme mixes custodial and insurance backed deposit holding mechanisms. The landlord or agent must register the tenancy details within 14 days of the tenancy start. At the end of the tenancy the tenant has to be notified of any deductions.
• Disbursements: Fees paid by the buyer's solicitor on the buyer's behalf. This may include stamp duty, land registry and search fees.
• Discharge: The paying off of a mortgage.
• Duty of Care: An obligation owed to others, specifically Landlords and Tenants, to provide the correct advice regarding lettings and ensure the well being and safety of those who may visit the property.

E

• Early Repayment Charge (ERC): This is a penalty charged on non-flexible mortgages when the loan is repaid in full within a set period. Usually it applies on a pro rata basis when capital repayments are made outside of the agreed monthly payments.
• Endowment Mortgage: An endowment mortgage is a mortgage loan arranged on an interest-only basis where the capital is intended to be repaid by one or more endowment policies.
• Equity: The difference between the price of a property sold and the loan on it.
• Exchange of Contracts: The point at which signed contracts are exchanged, legally binding the seller and buyer to the sale and purchase of a property at the agreed price.

F

• Fixed Rate Mortgage: A mortgage in which the interest rate is set for an agreed period of time.
• Fixtures and Fittings: All non-structural items built-in to the purchase of a property.
• Flexible Mortgage: A deal whereby you can increase or decrease your mortgage.
• Flying Freehold: Flying freehold is a UK legal real-estate term to describe a freehold which overhangs another freehold property, or which is situated beneath another.
• Freehold: Where the owner of the property also owns the land on which it is built.

G

• Gas Safety Regulations: The Landlord must ensure that a gas safety check is carried out prior to a let and then annually after that. An authorised registered engineer must carry out the check and a copy of the record must also be given to the tenant within 28 days.
• Ground Rent: The annual fee levied by the leaseholder to the freeholder.
• Guarantor: The lender may sometimes require a borrower to appoint a guarantor. This is someone who agrees to pay the borrower's liability if the borrower cannot pay. A guarantor is someone who agrees to pay the rent on behalf of the tenant if they are unable to meet payments, this is usually agreed in writing when the tenancy agreement is signed.

H

• HMO: House in multiple occupation, refers to bedsits or flats which normally offer a self-contained room with either cooking facilities in the room, a shared kitchen or shared bathroom and toilet facilities. Under the Housing Act 2004 it will cover any property occupied by more than one household that is a converted building even if the flats are not self contained.
• Homebuyer Survey: A standard report that is generated to evaluate any critical repairs to a property.
• Household Insurance: An insurance policy that protects against loss or damage to the property caused by fire, natural causes or acts of vandalism.

I

• Inflation: The general rise in prices over time.
• Interest Charges: The charges that banks make on a loan, calculated as a percentage of the amount borrowed.

J

• Joint Income: The total gross income of more than one borrower in a joint mortgage.
• Joint Tenants: A concurrent estate or co-tenancy is a concept in property law which describes the various ways in which property is owned by more than one person at a time. If more than one person own the same property, they are referred to as co-owners, co-tenants or joint tenants.

L

• Lease: A legal document by which the freehold (or leasehold) owner of a property lets the premises or a part of it to another party for a specified length of time, after the expiry of which ownership may revert to the freeholder or superior leaseholder.
• Leasehold: Land or property held under a lease.
• Legal Charge: A mortgage on the property.
• Lender's Arrangement Fees: A charge passed on to the buyer by lender for arranging a loan.
• Lender: A party, typically a bank, building society or mortgage company offering the loan.
• Loan to Value (LTV): Ratio between the loan on a property and its value or sales price.
• Local Authority Search: A search of the local area to highlight anything that may affect the property or surrounding area, such as planned road building and planning permissions.

M

• Mortgage Agreement in Principle: A phrase referring to a mortgage lender's willingness to enter into an agreement subject to other conditions being met. This may be more commonly known as an MAP.

N

• Negative Equity: Negative equity occurs when the value of an asset used to secure a loan is less than the outstanding balance on the loan.
• NHBC scheme (National House-Building Council): A type of building guarantee available on some newly built homes under which defects occurring within a specified time after construction are remedied.

O

• Offer of a Loan: A formal document approving the mortgage you have requested and detailing the Terms and Conditions that will apply.
• Office Copy Entry: Certified copies of the Land or Charge Certificate from the Land Registry.
• Open Market Value: The price a property should achieve when there is a willing buyer and willing seller.

P

• Peppercorn Ground Rent: A nominal periodic rent usually paid annually.
• Planning Permission: When property owners have sought permission from the local authority to make changes to a property.
• Prescribed Information: This refers to information which the Housing Act 2004 Sections 213 (5) - (6) and The Housing (Tenancy Deposits) (Prescribed Information) Order 2007 requires this to be provided to the tenant within 14 days of the deposit having been received.
• Public Liability Insurance: Insurance which covers injury or death to anyone on or around your property.

R

• Re-mortgage: Refinancing a property by either switching a mortgage from one lender to another or by taking
• out a second mortgage to take advantage of any equity gained by a rise in value.
• Repossession: When the mortgage lender takes possession of a property due to non-payment of a mortgage.
• Retention: A situation where a lender may hold back (retain) part of a mortgage until certain conditions are
• met.

S

• Share of Freehold: The tenure of a commercial property or flat. Typically, the division of one large commercial
• unit or block of apartments results in the creation of leases and leasehold property, with one freeholder who retains absolute right over the property and land.
• Sole Agent: When a seller gives only one estate agent the rights to sell their property.
• Sole Occupancy: A property that is occupied (lived in) only by the mortgage applicant(s) and their direct family.
• Solicitor: A legal expert that is qualified to handle the legalities of selling or buying a property.
• Stamp Duty Land Tax: When an individual purchases a property in the UK, this is the tax they must pay to the UK government.

T

• Tenure: Conditions on which a property is held (i.e. freehold or leasehold).
• Title Deeds: This is the legal document that not only identifies the owner of a property but also other
• details about the property and the land it is built on.
• Transfer Deeds: These are documents which when signed transfer the legal ownership of a property to another person.

V

• Variable Base Rate: The basic rate of interest charged on a mortgage. This may change with market conditions, meaning monthly payments can go up or down.
• Vendor: The person selling a property.

Y

• Yield: Profit from a property calculated as a percentage of its value