Services
People
News and Events
Other
Blogs

A renter's guide to common tenancy jargon

  • Posted

If you are currently renting, or are looking to rent, a property, then the jargon you’ll inevitably come across can appear confusing and overwhelming. Abbreviations, acronyms, you name it – there are plenty of terms you need to familiarise yourself with.

With that in mind, we’ve compiled a list of some common tenancy jargon that you will need to know if you are renting property in the UK.

Arrears

Arrears is any rent that is outstanding. Arrears can be paid in a full amount for a rental period or in part. You can be in what is known as ‘rent arrears’ if you are falling behind with rent payments to your landlord or letting agent. If you do not pay any rent arrears when asked by your landlord, they could apply to court to evict you.

AST (Assured Shorthold Tenancy)

An Assured Shorthold Tenancy (AST) is the most common type of tenancy agreement. An AST is used where the rent being paid is below £100,000 per year and the tenant is an individual or group of individuals who will have exclusive use of the property.

There are certain circumstances when ASTs are not suitable. These can include if:

  • The tenant is a company or other entity
  • The rent is over £100,000 per year
  • The property is being let as a holiday let
  • The property is a houseboat
  • The property is an agricultural or occupationally tied tenancy

ASTs are usually for fixed terms of 6 months or 12 months. At the end of the term, your landlord is allowed to take back the property without a reason (although the government may change this law in the future to make ASTs more secure) so long as they serve proper notice (see the section on Section 21 Notices below).

Your landlord is also allowed to evict you during your tenancy if they have a reason, for example, if you are in rent arrears (see the section on Section 8 Notices below).

Client Money Protection Insurance (CMP)

CMP is a specific type of insurance for letting agents. The purpose of CMP is to protect against the loss of client money such as rent and deposits by letting agents. Total loss CMP means that both you and your landlord can claim back any money that has been lost or misappropriated by an agent.

Covenants

Covenants are specific terms that you agree to as part of your tenancy agreement. They will state what you are prohibited from doing while you occupy the property and they also clearly set out the promises that a landlord or tenant both make during the course of the tenancy.

Examples of covenants that may be put in place as a part of your tenancy include:

  • Preventing tenants from making alterations to a property, such as a building extension
  • Preventing buildings or substantial structures from being erected in a section of land
  • Preventing trades or businesses from operating on the land

Guarantor

A guarantor is an individual who agrees to fulfil your obligations under the tenancy agreement should you ever be unable to do so yourself. Usually this means they will cover arrears if you fail to pay your rent and the landlord is legally entitled to sue the guarantor for the money.

It is a legal requirement for a guarantor agreement to be in writing, so that the guarantor’s legal obligations are clearly set out. A guarantor can also be liable for other conditions under the property, such as damages, so long as this is stated in the tenancy agreement.

You may need a guarantor if your landlord thinks that there is a risk in letting you rent the property. For example, if you are a student or are otherwise not in full time employment.

House in Multiple Occupation (HMO)

For a property to be declared as a House in Multiple Occupation (HMO), then both of the following must be true:

  • There must be at least three tenants living in the property, forming more than one household
  • There are shared toilet, bathroom or kitchen facilities.

You may also be living in a ‘large HMO’. A property is defined as a large HMO if:

  • There are at least five tenants from two or more households
  • The property is higher than three stories
  • There are shared toilet, bathroom or kitchen facilities

A landlord must have a licence from the council to rent out a large HMO.

Examples of HMOs can include house shares where there are no family relationships and bed-sits accommodation.

Inventory

An inventory is a list detailing the contents of a property. An inventory list can include the general condition of the property, detailing how clean it is, whether any repairs are required, and if fittings such as power points are working correctly.

At the beginning of a tenancy, an inventory check should be carried out to detail what condition the property was in prior to a tenant moving in. At the end of the tenancy, another inventory check is then carried out to compare if the condition of the property has changed during the course of the tenancy. If there are found to be changes to the condition of the property, then repair costs can be deducted from the original deposit (other than costs for fair wear and tear).

Agents and landlords may use a third-party inventory clerk to carry out the inventory check.

Periodic Tenancy

A periodic tenancy is one that continues for successive periods, usually either monthly or 4-weekly. The tenancy will continue rolling over until either the landlord or tenant ends the tenancy by serving at least a month or 4 weeks’ notice.

When an Assured Shorthold Tenancy (AST) ends, it will become a periodic tenancy unless the tenant signs a renewal agreement valid notice to end the tenancy is served.

Section 8 Notice

Your landlord may serve a Section 8 Notice on you either during or at the end of your tenancy if they have a reason to end it, for example, if you have fallen into rent arrears or the landlord wants to move into the property themselves.

Section 21 Notice

If your landlord wants the property back at the end of your AST, they will serve what is called a Section 21 Notice.

Your landlord must give you at least 2 months’ notice to leave the property but they cannot serve a notice until at least 4 months into your tenancy.

If your landlord does not serve a Section 21 notice on you, you are allowed to stay in the property after your fixed term ends and the tenancy will automatically turn into a periodic tenancy.

The government has stated that it plans to abolish Section 21 at some point to make tenancies more secure for renters.

Statutory Obligations

Statutory Obligations are requirements of the landlord or agents on their behalf as set by Acts of Parliament. These obligations do not arise from a contract signed between the landlord and the tenant but are instead imposed by law.

Examples of statutory obligations for landlords include gas, electrical and fire safety checks, as well as responsibilities for repairs and maintenance to areas of the property such as installations for the supply of water, gas and electricity.

Tenancy Deposit Scheme (TDS)

TDSs are government-backed schemes to protect tenants’ deposits. If you have an AST and you have paid a deposit, your landlord is legally required to put your deposit money into a protected scheme. If you fulfil all your obligations under the tenancy, you will get the deposit back at the end of your tenancy. If there is a dispute about the deposit then there is a redress scheme that will be handled by the TDS provider.

If your landlord fails to protect your deposit or they do not give it back at the end of the tenancy (without valid reason), you can take them to court.

Get Expert Advice on Renting Property

If you have any further questions about renting property in the UK, or if you are looking for support with buy-to-let property, our experienced team of conveyancing solicitors are on hand to provide you with expert advice that will help you better understand your position.

To get in touch, please give us a call, fill in our online enquiry form or visit one of our offices in Grantham, Newark or Lincoln, and we will get in touch shortly.