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Lettings Glossary

If you’re unsure of any term we’ve used, you should be able to find an explanation here:

A

AAT (Assured Agricultural Tenancy)

 

  • Accommodation provided as part of employment.
  • Such occupant is a licensee.
  • When evicting this falls within discretionary ground 16 of a section 8 notice to quit under HA ’88.

 

Abandonment of Tenancy

  • The surrender of a tenancy without adequate tenant notice.
  • S5(2) HA’88 requires a landlord to procure a court order or action by a tenant signifying surrender – e.g. departure AND return of keys.
  • This appears straightforward, but for some landlords it presents a number of pitfalls.

    Landlords should be certain their tenant really has left, and be wary of being duped into a trap set by unscrupulous tenants in order to use the legal system to secure contrived compensation.

    Witnessing this first-hand: A former tenant failed to pay rent and stole other tenants’ credit card details, before emptying their bank accounts and then his room of possessions and disappearing with the keys. In such circumstances would you have felt free to re-let the room? Most would! Wisely we waited. Sure enough, returning unannounced three weeks later, his luggage cases in tow, this tenant expected his room to be re-let, and looked genuinely disappointed to find his room untouched. Re-letting might have enabled him to claim compensation, which was evidently the point of the exercise. Be warned! Those who defraud fellow housemates will happily also target their landlords.

    Incidentally this crook was eventually prosecuted and sent to jail for the credit-card theft and fraud, but not before putting everyone in the house through hell! For this to happen is rare, but as you can see, not unheard of, and simply not worth risking, which is why…

  • Prudent landlords MUST do their own legal research, as well as demonstrate due diligence with correct notices to repossess before letting to new tenants!
  • See also related topic Abandonment of goods or possessions.

Abandonment of Goods or Possessions

  • Goods left by departing tenants remain the property of the tenants.
  • Old TVs and apparently worthless items might look like rubbish – and probably are – but they belong to the tenants.
  • Landlords cannot interfere with a tenant’s goods or possessions. (Torts) Interference with goods Act 1977.
  • The tenants must be advised that their possessions remain and are given an opportunity to collect or recover their belongings.
  • A reasonable period of notice must be allowed prior to discarding another’s possessions.
  • Reasonable costs for storage may be charged and tenants should be advised of this too.
  • This is the sort of foresight which is ideally provided within the tenancy agreement prior to establishing a tenancy.
  • See Possessions and Abandonment of Tenancy

Absent Landlords

  • Absent Landlords own property in a town, city, country etc in which they are not resident.
  • The further away landlords reside, the less likely they are able to attend to local issues, promptly or at all.
  • Unless they engage letting agents, problems are very likely.
  • Landlords who attempt to manage property from abroad are often criticised for not properly looking after their properties.
  • Neighbours complain when grass is overgrown and maintenance matters are left unattended.
  • Academic Term

    An academic year is split into terms or semesters.

    Academic Year

    • Academic years usually run from July to June each year.
    • Most students start their first day during September, but this varies from course to course and also between educational establishments.
    • An academic year is split into academic terms – usually three – four if including Summer term.
    • The timing of these academic terms is vital when seeking or providing accommodation.
    • If a prospective tenant approaches a letting agent for accommodation with a term starting in September, but ending three months later, then this should cause alarm bells to ring for agents and landlords.
      Why? Because at the end of this short tenancy, letting agents in Canterbury will not easily be able to re-let that accommodation to conventional students, whose academic year ends in June. The number of non-conventional students who might rent from January to June is so small, a void would be likely. So “the bird in the hand” in this instance is not “better than the two in the bush”. Better to leave the accommodation vacant and wait until a conventional student arrives to remain for the whole year.
      This is not to say, however, that you should never accept students ‘out of time’. There may be commercial reasons why such a decision might occasionally be prudent. Should the same student arrive in February and only wish to rent until May, then a letting agent might consider that this is a reasonable compromise, since the property might otherwise remain unoccupied until June.
      Prudent landlords and letting agents keep records enabling comparisons with past and future months and years; supply and demand, together with observations in market trends, as well as political and economic factors, all improve letting success when analysed.
    • If a tenant leaves before the end of the academic year, in January for example, it will be very difficult to find a replacement. This is because most students have already found accommodation for the whole academic year.
      This topic is also related to Dropouts.

    Accelerated Degrees

    • Some universities (eg Buckingham) offer Accelerated Degrees studied during two years (as opposed to three) for those students exceptionally bright enough to assimilate information in a shorter time.
    • Benefits: cheaper fees overall and the ability to start work sooner.
    • Disbenefits: affects quality of life, the normal perception of student experience, limiting socialising time and criticised as unrealistic.
    • Potentially higher dropout rates resulting in greater financial loss as opposed to savings.

    Accelerated Notice To Quit (ANTQ)

     

    Access

    • This can involve
    • Where students need urgent replacement keys Leydon Lettings require:
      • identification (student I.D card with matching photo)
      • a signature in the key book prior to release
      • a record of key holders.
    • This applies to tradespeople who should sign all keys in and out.
    • Keys are kept coded and in a locked cabinet for security.
    • Never identify a property on a key nor provide a clue to the property address by marking the key other than with a secure key code.
    • Remember – lost keys can enable dishonest finders easy entry to your house.

    Accidental Landlord

    • An accidental landlord is an owner occupier who becomes a landlord without intending to, or without awareness of the responsibilities of a landlord.
    • Initially intended to tide over a temporary situation not expected to last, with unintended results:
      An owner may wish to sell a property in a depressed housing market. Unable to sell he lets the property in the hope the market improves. Meanwhile, he finds the new arrangement suits him and continues indefinitely.
    • The issues arising during this “apprenticeship” period are well-known to more experienced agents and landlords; the perception is that amateur unregulated landlords lower the standards of the letting profession by flouting the rules and in extreme instances endangering the lives of tenants.
    • Inexperienced landlords might be best to engage an experienced agent.
    • See Absent Landlord & Reluctant Landlord.

    Accommodation Types

    • Each category of accommodation carries different nuances. Understanding each market is not critical; however, landlords must understand their own market to avoid serious pitfalls.
    • The main two main genres are:
      • Student accommodation
      • Professional accommodation.
    • Other categories include:
      • Council Housing
      • Benefit recipients
      • Asylum seekers
      • Parolees
      • Holiday lets
      • Company lets
      • Satellite accommodation for recovering alcoholics etc.
        Each is a specialist topic.
    • Leydon Lettings has, for 25 years, accommodated all these genres.
    • We started renting accommodation in 1987 to students, adding other categories along the way. We now specialise in student accommodation. Some students have stayed as long as seven years! Summer vacations enable predictable access for maintenance, which suits our ethos.

    Accreditation – Landlord

    • There are different forms of Landlord Accreditation:
      • By payment of membership fees and agreeing to comply with codes of practice, such as the local authority founded Canterbury Accreditation Scheme now run by university of Kent UKC and renamed HomeStamp.
      • There are also examination schemes of accreditation based on membership and payment of subscription, such as those provided by the National Landlords Association NLA, RLA or Unipol for those landlords subscribing to such organisations.
      • Some schemes, like the Property ombudeman’s scheme, are designed to protect landlords and tenants as opposed to agent subscribers. These require fee-paying subscribers to provide evidence of accounting practices. In addition separate client accounts are ring-fenced, to protect client landlords against letting agent impropriety.
    • The aim is to raise standards of professionalism amongst landlords by informing members of their responsibilities through training and / or examination, continuous professional development CPD, attendance at information events, etc.
    • Landlord members are required to adhere to a code of conduct and rules set by each scheme, most of which overlap but have significant differences. Some landlords are members of more than one scheme, broadening understanding and reinforcing the importance of compliance.
    • Tenants can seek redress by complaining to scheme organisers who will investigate and make recommendations. Failure to comply can result in scheme members being banned from membership.

    Acoustic or Sound Insulation

    • Acoustic insulation is likely to be required when converting an upper floor commercial floor to a residential flat if the ground floor is used for commercial premises.
      Likewise if a property will, following renovation, accommodate more than six unrelated tenants (sui generis).
    • The equipment used and the certification required by acoustic engineers is expensive.
    • Preventing sound transmission is complex as it involves air born and vibration sounds though connecting timber joists and staggered wall studs.
    • Special ‘acoustic hangers’ help to absorb sound and minimise transmission. Suspended ceilings create an air cavity between surfaces; ideally the two separating surfaces should have minimal contact if possible using isolation washers and sound barrier pads.
    • Any perimeter holes, gaps or joints should be filled with inter-acoustic sealant.
    • Skirting boards may need to be removed to allow floor insulation to continue to the wall with skirting replaced above any new floor.
    • The process is likely to involve 1 hour fire separation barriers too, where intumescent collars and intumastic sealant is likely to be required.  Service and drainage pipes and cables passing through surfaces also allow transfer of sound, smoke and flames.
    • This is a job for an expert, avoid DIY!

    Acts of Parliament and Judicial Cases Related to Property

    1. Housing Acts 1925 –
    2. Warren v Keen 1954 –
      • “”to use the premises in a tenant-like manner”…
      • The tenant must repair damage to the premises caused, willfully or negligently, by him, his family and his guests.”
    3. (Torts ) Interference with goods Act 1977 (see possessions)
    4. Protection from Eviction Act 1977
    5. Rent Act 1977 –
    6. Unfair Contract Terms Act 1977
    7. Landlord and Tenant Act 1985 –
      • S.8-11 landlord duty to repair
      • Secure Tenancies (mainly LAs)
      • s.8 Grounds 1-16 for eviction (see g.17 1995 Act)
    8. Housing Act 1987-
    9. Limitation Act 980
    10. Town & Country Planning Order 1987, providing for certain changes of property use from Class C3 residential use, to Class C4 HMO use.
    11. Post Office v Aquarius Properties 1987 –
      •  Flooded basement; repair to original condition only.
    12. Landlord and Tenant Act 1987 Section 47 and 48 – name and address of the landlord should be included in the tenancy agreement
    13. Housing Act 1988 –
      • Step towards deregulation to free up over regulated housing market (esp. since HA77)
      • Assured Short Hold Tenancies  – ASTs (less security)
      • s.20 Notices HA 1988 Notices
      • s.21 HA 1988 Notices;
      • Fixed Term s.21 b or periodic term s.21 a options
      • Market rent
      • Recover and enforce only after 6 months
        • Exception
        • Ground 2 HA’88 mortgagee defaults s.101 LPA 25
      • Exceptions: [R.A.S.H.100k) – acronym]
        • Resident Landlords
        • Agricultural Land tenancies
        • Student Letting (only if in Halls of Residence)
        • Holiday Lettings
        • < £1000 p/a London or elsewhere,
        • >£25k p/a now >£100k p/a
      • Grounds for eviction:
      •  1-8 Mandatory;
        • 1  Owner principle former home returning
        • 2  HA’88 mortgagee default s.101 LPA 25
        • 3 Fixed term < 8 months AND former holiday let
        • 4 Term < 12 months etc.
        • 5 Minister of religion e.g. manse required.
        • 6 Renovation works render uninhabitable
        • 7 Former tenant of Deceased
        • 8 Rent Arrears according to rent frequency
      • 9-17 Discretionary:
        • 9 Suitable alternative accommodation available
        • 10 Some unpaid rent on date of service
        • 11 Persistent late rent
        • 12 Unperformed obligation or default tenancy
        • 13House deterioration
        • 14 Nuisance annoyance / immoral illegal conduct
        • 14Aa Tenant departure unlikely to return
        • 15 Furniture deterioration
        • 16 Employed tenant no longer employed
        • 17 Misleading statement inducing tenancy (HA 1996)
    14. Town and Country Planning Act 1990
      This act covers development, enforcement, conservation, listed building consents, Letting and Estate Agents boards.
    15. Environmental Protection Act (1990),  or anti-social behaviour legislation discouraging e.g. noise.
    16. Periodic Tenancy  Hammersmith Council v Monk 1992
      1. Two joint tenants. One of whom provided notice to quit to the Council landlord, but neglected to inform the other joint tenant who remained in the property.  The Council re-possessed the property.
        The House of Lords (HoL) upheld a series of Court of Appeal (CoA) judgments deciding one party to a joint tenancy can end a periodic joint-tenancy unilaterally, by giving correct notice to quit.  Exceptions include express contractual terms to the contrary.  The Council was granted Possession.
    17. Finance Act 1995 – tax affecting overseas landlordsHousing Act 1996 – AST now default tenancy effective 28Feb 1997
    18. Housing Act 2004 –
      • Deposit protection from 2007
      • s.54 Mandatory Licensing large HMOs from 2007
      • s.55 Additional Licensing small HMOs discretionary by LAs
      • s80 Selective Licensing small HMOs discretionary by LAs
      • And much more… this is now the most comprehensive property Act.
    19. Money Laundering Regulations 2007 – Estate Agents required to report suspected fraudsters
    20. Equality Act 2010 – section 15
      • defense to eviction
      • consolidated all previous discrimination acts .
    1. Localism Act 2011
    2. What next?

    Additional Clause

    • See also non-standard clause
    • A clause not provided in a normal tenancy.
    • Landlord and tenant must agree prior to signing or formalising the tenancy.
    • A clause which must refer to any related clause in the normal tenancy agreement.

    Address for Service

    • S.48 of the Landlord and Tenant Act 1987 requires that a tenant is provided with an address where notices can be served on the landlord. This address must be in England or Wales and can be the name and address of any managing agent – it need not be the landlord’s address, but see note below!
    • It is important that tenants forward to the address for service any correspondence sent to the landlord or “the owner” of any rented property. Tenants are normally contractually responsible for the consequence of failing to forward or advise the existence of such notices. This might include letters or utility bills which if neglected may result in services being disconnected. The tenant cannot then reasonably deny responsibility or fault and will suffer the loss of the service disconnected and the reconnection charges as well as any meter or locks replaced in the process at the demand of the utility supplier.
    • Note, under S.1 of the landlord and Tenant Act 1995, a tenant who requests in writing, a landlord’s address, must be provided within 21 days of the tenant requesting and this must also be provided in writing. It is a criminal offense to fail to comply with such request.

    Administration Fees (Admin Fees)

    • There are various time consuming administrative jobs required to establish due diligence.
    • These jobs are not free in that someone has to pay.
    • Who should pay the costs of: setting up a tenancy, vetting and credit checking?  Presently (2013) parliament is debating the justification for such fees.
    • In Scotland the 1984 Rent Act prohibits administration per-tenancy fees.  There are concerns that England may follow.
    • These jobs cannot all be conducted in-house by letting agencies – some jobs require outside organizations to act, precisely because they must be seen to be independent, i.e. unbiased, such as inventory clerks. The reasoning is that, in the event of a dispute, a court can see that there is likely to be impartiality, since inventory clerks must work to a set code of practice.
    • Others jobs require specialist access to protected data enabling credit checks.
    • The agency pays these fees and recovers them form landlords and tenants.

    Advanced Rent

    Adverse Possession

    • Adverse Possession is the occupying of a property for at least 12 years without the agreement of the landlord.
    • Usually the owner of the property so subject is unaware or would take steps to prevent it.
    • After 12 years the occupier can claim possession by formalizing a previously informal arrangement.
    • Squatters who have not paid rent or been granted a license or permission to reside are likely candidates.
    • Landlords abroad (absent landlords) may be unaware of occupancy.
    • Adjacent property owners may be unaware that a portion of their land has become fenced off (creating exclusive possession) or “groomed” for adverse possession unknown to the owner until a claim is presented.
    • A property can be purchased unwittingly from an apparent owner who no longer actually owns the property.  Third party action is likely to enable recovery – very messy.
    • The new “owner” must prove title by evincing
      • exclusive possession – the right to exclude the landlord and others from a portion of the property.
      • absence of original owner consent
      • continuous possession or control for at least 12 years.

    Advertising Standards Authority (ASA)

    • This body regulates what should be included in Letting Agent and Estate Agent marketing material.
    • From 1 Novbember 2013 fees mus be included affecting prospective tenants
    • Already required to be included is the graph for EPC certificates showing the SAP EPC rating.
    • The Committee for Advertising Practice CAP determine compliance.

    Agent

    • There is more than one kind of agent.
    • Letting agents act for property owners (landlords)
    • Sole agent -only one agent is appointed by an owner to sell or let a property
    • Multi Agent – more than one agent is appointed by an owner to sell or let a property.  The successful agent takes all (the commission)!
    • Multi marketing by multi agents means some will not be paid for their efforts, acting as a deterrent.  Sole agency usually gets best results through more committment.
    • Sole Agents prioritise the sale or let of properties ahead of multi agent appointments.
    • Agent for the landlord
    • This can be anyone acting on his behalf
    • It need not be a formal agent, it could be a friend.
    • Agent for the tenant
    • This can be anyone acting on his behalf
    • When a person makes a payment on behalf of a tenant it is prudent and best practice to provide a receipt and to have this countersigned by the “agent for the tenant” stating the purpose for the payment (rent, bills, deposit, etc) and the property it relates to.
    • The authority to act as agent is established by (R.E.A.L.):
    • Ratification
    • Estoppel
    • Appointment
    • Legal implication
      • Think of Real (estate) Agent

    Agent of Necessity

    • When an agent acts without formal authority from the landlord to avoid a potential disaster – e.g. engaging a plumber to prevent a flood, his defence for so acting is that there was no reasonable alternative – the landlord would be legally obliged to pay the agent costs even if he objected, provided the agent demonstrated that he acted reasonably in all the circumstances.
    • See also Agent of necessity , repairsmaintenance.

    Alterations

    • See Discrimination and obligations to carry out reasonable adjustments for disabled tenants.
    • Any proposed alterations made after contracting to rent normally requires tenant consent:
      • if it is different from what they bargained for
      • If carried out during the tenancy
    • Consider the wisdom of effecting non-urgent alterations during a tenancy.  This is likely to result in complaints and claims for reduced or no rent, even when pre-agreed.  The work takes longer when tenants are in situ and many landlords conclude that it is less costly to wait until a void to effect alterations.
    • Tenants normally require permission to make home alterations:
      • Moving flat-packed furniture, once assembled, can cause damage.  Tenancies normally prohibit moving furniture.
      • A nail or screw to support a picture can puncture a water or electric supply.
      • Painting neutral magnolia walls say purple, is unlikely to appeal to average colour tastes and  may need three coats of paint to obliterate.
    • See also Agent of necessity , repairsmaintenance.

    Alternative Dispute Resolution (ADR)

    • This is the independent means of resolving disputes over deposits between landlord and tenants.
    • All landlords are legally required to register an AST deposit with one of four or five Deposit Protection Schemes.

    Amenities

    • The number and availability of common facilities like:
      • sinks, drainers, hobs, hoods, fridges, freezers, shower, toilet, bath, hand basins, en suite or shared lounge, storage, garden, driveway, central heating by e.g. combi-boiler, etc.
    • This can also refer to some furniture e.g.
      • Single or double beds, etc.
    • Amenities are important to attract tenants.  They also include the items which require most effort to clean at the end of the tenancy.

    Amortization

    • See direct repayment mortgage:
    • This is a means of repaying a mortgage in regular instalments until the loan is repaid with interest decreasing inversely proportionally to the rate the equity increases using a mathematical formula.

    Anecdotes for Landlords and Tenants

    • Most landlords and tenants have amusing stories to tell.

    Annual Percentage Rate (APR)

    • An indicator of the cost of a mortgage based on the annualised as opposed to monthly calculations.
    • Criticized for being misleading since most borrowers swap lender or products within say 5 years, whereas the APR is based on the term of the loan e.g. 25 years which is unlikely to be realised.

    Annual Rent and/or Bills

    • This is the annual rent or bills divided into the number of weeks, months or terms of occupancy.
    • Students rent for less than 52 weeks.
    • However the annual cost of bills might be calibrated and paid over a shorter period.
    • This might have the effect of increasing the weekly, monthly or termly amounts payable.
    • It may at first appear unfair, but is actually the same annual cost.
    • A similar situation occurs when students calculate rent weekly and are surprised when the calendar monthly amount is higher.  The quarterly amount remains the same as there are 13 (not 12) weeks in a quarter.
    • Where rent is payable quarterly the figures are easily reconciled.
    • This concept of ‘annualising’ is similar to ‘calendar monthly’ calculations as opposed to four weekly i.e. lunar months.

    Appraisal

    • The process of establishing the value of a property in terms of sale value or letting rent.
    • This will involve comparisons with other properties in the area of similar size and features recently valued.

    Arms Length Property Sale

    • Arms length sale of property.
    • Was the sale independent or did it involve an element of benevolence?
    • This is about whether a property was sold at market value as opposed to bequeathed to a beneficiary.
    • There are tax and legal implications see Capital Gains
    • This begs the question, was the sale merely a gift?
    • Independent valuations avoid such questions.

    Arrangement Fees

    • Money paid to a broker and or lender to arrange a mortgage.

    Arrears

    • Any Money remaining unpaid by the tenant following the due date as in the tenancy agreement.
    • A landlord who is the client of a letting agent can also be in arrears if he fails to pay money to an agent for e.g. maintenance.  Technically this should never happen as the rules on letting prohibit agents from using in-cleared funds.  However, see also Agent of Necessity permitting agents to act without authority or cleared funds. This comes under the topic of lending for which an unauthorised lender’s license is required.
    • An agent can also be in arrears if he fails to pay his client landlord on time following receipt of cleared funds e.g. rent.
    • Landlords should be kept informed of any significant arrears. This is particularly important if the landlord has a rent guarantee insurance policy- the insurer will need to be notified within a specific time-frame that arrears exist to avoid invalidating the insurance terms and conditions
    • Tenants should be contacted to remind them of the arrears at regular intervals but without harassing them by telephoning tenants at work and leaving a message indiscriminately with a workmate or their boss thereby breaching rules of confidentiality.
    • When a tenancy agreement makes provision for interest on late payments this must be calculated on a daily basis and added to the statement of account for the landlord and tenants.  It might be prudent to use this as a lever to prise the correct amount of rent with the promise to forego the interest if the tenant cooperates.  Should the matter go to court no such leniency is likely to be tolerated by a landlord due to the amount of preparation required to attend and provide documentary evidence.
    • Guarantors should be informed quickly of any arrears as they are likely to want to correct the situation before it escalates costing them yet more money.
    • Should a third party assist the tenant or may a payment on their behalf there is a risk that this creates a separate contract with the third party (see consideration).  To avoid this murky situation the agent simply provides a duplicate receipt clarifying that the payment is received from the payer as” agent for the tenant” and to avoid doubt the tenant’s name and address should be entered on the receipt and signed by the named tenant’s agent and countersigned by the landlord or the landlord’s agent.

    Arrival Date

    • The date agreed for arrival subject to providing notice of this date.

    Article 4 Directions

    • The use of statutory planning controls to protect, preserve or prevent what was, from what could be.
    • In this context, protecting residential communities by curtailing the number of HMOs within a selected area.
    • The aim is to prevent the current spread of HMOs and in particular student HMOs.
    • This requires compliance with LAs and Landlords involving a “change of use” of an owner-occupied residence Class C3 to a Class C4: HMO status.
    • There is no charge for Art 4 Directions.
    • Indeed a large number of simultaneous applicants could consequently cripple a LAs administrative budget.
    • Could this be why many Councils in the UK are arguably (cynically) introducing fee paying discretionary licensing?
    • Some inspections incurring fees under licensing are suspiciously similar to those which are the responsibility of LAs under other legislation, but which attract no fees!
    • The penurious-plot thickens!
    • Enabled via the HA 2004
    • This move was first introduced by MP John Healy in Southampton for the Labour party on 29 January 2010 and supported by fellow labour MP John Denham.
    • Implemented on 6 April 2010,
    • Repealed temporarily by the coalition government on 1 October 2010.  Why?
      • To allow for the statutory minimum of 12 months consultation by LAs.
      • This period of consultation has now expired in Canterbury and the survey is complete.
      • A decision is imminent and potentially without notice.
      • As at Early August 2012 it is envisaged an executive meeting following a meeting in November will result in a formal decision.
      • If the vote is against no further action is required.
      • If the vote favours an Art, 4 Direction or a series of Art 4 Directions then it could be implemented without notice.
    • See also Planning Permission

    Asbestos

    • Asbestos can be dangerous to health if inhaled leading to cancer.
    • Asbestos safety reports may be required by a lender prior, to or as a condition of, granting a mortgage.
    • Regardless of any such requirement it is prudent to conduct a risk assesment.
    • Older properties are less likely to be affected but any past renovation may have included asbestos in the construction.

    Asking Price

    • The amount of rent or sale price advertised before negotiation.

    Assignment of a Tenancy Agreement

     

    • A document setting out the terms of the assignment.
    • The present assignor tenant assigns to the substitute tenant assignee, the tenancy in conjunction with the third party landlord.  This tripartite agreement establishes the parties to the new agreement adopting the original terms.
    • A new tenant is appointed to adopt the rights and responsibilities of the original tenancy until the end of the original tenancy term.
    • See also deed of Assignment , substitute tenant

     

    Associations – Landlord and Letting

    Assured Periodic Tenancy

    • An Assured tenancy provides additional security of tenure and can extend to 3 generations of tenants.
    • An Assured Periodic Tenancy can start in this way or revert to an APT following the end of the initial fixed term.
    • Tenants cannot be evicted at all – unless they breach the tenancy terms.
    • Horribly complicated aspect of Landlord and Tenant Law.
    • NEVER confuse this wish a Statutory Periodic tenancy.

    Assured Shorthold Tenancy (AST)

    • Assured Short Hold Tenancy created by 1988 Housing Act enacted 15 January 1989.  Unless specified the AST is the default tenancy for domestic residents.  However, see also exceptions like CLTs
    • Prior to 15.1.89, compliant protected (sitting) tenants could not be evicted.
    • Since this date AST tenants have right to remain for a minimum of 6 months.
    • The Housing Act 1996 as amended and effective from 28.02.97 permits any duration of tenancy, but unusually it cannot be enforced within 6 months.
    • This is important for landlords with pre-15.1.1989 tenants, since different rules afford more protection to such Protected tenants.
    • Any tenancy created after 28 February 1997 is automatically an AST unless stated otherwise.  Section 20 notices are no longer required to be issued from 28 February 1997 prior to granting a tenancy but note that these must be produced in court to end HMO tenancy commencing prior to 28.2.97.
    • Tenancies granted after 15 January 1989 are no longer automatically protected tenancies unless so stated.  They are assured tenancies.

    Assured Tenancy

    • The default tenancy  from 15.02.1989 to 28.2.1997.
    • This is important to landlords considering buying a house with tenants predicating certain legislation.
    • Letting Agents must also be careful when accepting properties with assured tenants.
      NOTE!
    • Protected Tenancies – Tenancies created prior to 15.1.1989 are protected tenancies, also known as regulated tenancies or sitting tenant tenancies.
    • Get it wrong and the result may be a sitting tenant with  potential  succession rights!
      • What does this mean?
      • Well… not only are landlords prohibited from evicting the compliant tenant but
      • Following death the tenant’s off-spring may be permitted to continue in residence.
      • Great, say some naive landlords, there will never be another void!
      • True, but the rent is regulated so the resulting rent is almost worthless in the loan to rent ratio.

    ATED: Annual Tax on Enveloped Dwellings

    • Property related tax payable by companies owning UK dwellings worth more than £2million.
    • The £2m threshold is reducing in 2015 to £1m – and in 2016 to £500k so many small limited companies could get caught!
    • Introduced 1 April 2013
    • Affects non-charitable companies and partnerships owning a property valued or acquired at over £2m
    • Thresholds apply and are subject to change.
    • Relief must be applied for, via an annual return.
    • Charities owning such assets are exempt
    • The tax is payable in “bands” a bit like Council Tax.
    • Consult HMRC for more info or your accountant.
    • See also Mansion Tax

    Auction

    • Properties sold at auction is a growing trend.
    • Properties are advertised in auction catalogues.
    • By registering with the auctioneer regular copies of catalogue are set by email allowing you time to establish properties you might bid for.
    • The time from receiving the catalogue and the properties being auctioned is limited to about a month.
    • Ideally establish the location and type of property desired before receipt of the catalogue to minimise any delay in previewing properties.
    • If you are buying with cash then finance is not  an issue otherwise have an agreement in principle in place to finance any purchase(s).
    • Normally 10% of the purchase price must be paid on the fall of the hammer.  Bank cards are fine.  This will form part of your deposit depending on the LTV If the LTV is over 90% (unlikely) you still need to pay the minimum 10% and any excess is recovered by the loan.  Conversely if the LTV is lower than 90% then the difference is paid by buyer.
    • The balance payable must normally be paid within 28 days.  Failure to compel can result in loss of the 10% deposit!
    • Visit the property by appointment.  The auctioneer will provide an information pack as a guide through the process.
    • The property is likely to be dilapidated or suffering from some defect.
    • Have a survey conducted the fee lost may be rewarded by avoiding subsidence costs!
    • Arrange with a solicitor to have the documents ready in the event of a successful bid.  Searches may reveal hidden pitfalls.
    • Register with the auctioneer and arrive very early to avoid being stuck in a corridor during the auction unable to bid – they can be very crowded.
    • Establish the maximum bid value and avoid exceeding this.
    • Do not worry about scratching you nose and inadvertently bidding – you will be given a card with a number to hold up when bidding.  The number corresponds to your registration details. Alternatively telephone bidding on the day obviates the need to attend at all.
    • The biggest problem having gone to so much advanced trouble is that this develops a commitment to the property.  Know when to stop bidding and wait for another deal.
    • Guide prices often achieve double at auction, just keep in mind what it is worth!
    • Pre and post bidding is possible.  Auctioneers will advise how much will secure the deal outside the auction.  If the property fails to achieve the minimum reserve price then the seller may be willing to climb down.  At the end of the auction buyers sellers and the auctioneer (acting as agent for the seller) may cobble together to thrash out a last minute deal.

    Authorised Guarantee Agreement – AGA

    • A tenant wanting to be released from an agreement may not always be allowed.
    • Sometimes a compromise is the best available option.
    • The tenant can assign a tenancy to a third party if permitted.
    • The landlord is likely to require the incoming tenant to provide an AGA.  This guarantees that the new tenant will be responsible for all rights and more importantly responsibilities

    B

    Bailiff

  • Bailiffs are court appointed officers empowered to enforce e.g. County Court Judgments CCJs.
  • They can gain entry to homes and are entitled to collect debts and repossess property and homes.
  • Bank Statements

  • Part of vetting a tenant is checking affordability and lifestyle via a bank stateemnt. This can be done by an agent or farmed out to specialists.
  • Beds-In-Sheds

    • Outbuildings or cabins converted to habitable accommodation without planning consent, where required.
    • Substantial fines are imposed particularly where a landlord ignores a restraint notice.
    • Fines may be proportional to the amount of the rent with added legal costs.

    Benefit Recipients

  • One in receipt of a state benefit such as the local housing allowance is said to be a benefit recipient.
  • Many landlords will not accept such tenants due to the dificulties endured which include the risk of having to return rent the landlord ws entitled to but that the tenant was not.
  • Incidences of damage to property and rent arrears is higher in this category of tenant, than most others.
  • Betterment

  • This might occur when a claim for dilapidations for an aging item is being charged as new. This would be an unfair charge to tenants if e.g. the walls were badly marked after two years of letting. If it were normal to redecorate every 7 years then in this instance the most one could reasonably charge is 5 /7ths of the total cost of decorating.
  • Bijoux Property

    • A bijoux home is a very small property.
    • Usually compact but tastefully elegant.
    • Compare PensionePied-de-terre

    Bills

    • Includes: e.g.:
      • Utility bills:
      • gas,
      • electric,
      • water,
      • sewerage costs.
    • In addition Leydon Lettings provide:
      • telephone,
      • internet,
      • TV and
      • TV license
      • I.e. double the number of services normally provided in such packages.
      • no charge for our gardener to cut the grass

    Bills Package

  • The provision of a variable combination of utility and other services.
  • Leydon Lettings provides for: gas, electric, water, sewerage costs, telephone, internet, TV and TV license. In addition Leydon Lettings do not charge tenant’s for our gardener to cut the grass bi-monthly.
  • Black Listing

    • See Data Protection
    • The Data Protection Act 1998 does not prohibit landlords divulging personal information where they have a legal obligation to do so.  E.g. to LAs and utility cos.
    • The Data Protection Act 1998 prohibits landlords divulging personal information where their motive is vexatious.

    Blind Booking / Reserving Blind

    • This is not recommended
    • A tenant reserves a property without first seeing (viewing) a selected house.
    • Occasionally, overseas tenants have little choice but to trust the property particulars which is why the accuracy of such details is imperative.  Landlords should beware of such potentially fickle reservations as they are often unsecured.  An initial payment will not cover the lost rent should the tenant walk away upon seeing the house, location, room size, house mates, proximity to uni. etc.
    • If possible prospective tenants should ask a local friend or relative to view before reserving.
    • Similarly a landlord might buy a house unseen, trusting the seller’s description or Property Particulars.
    • As a landlord Bob Leydon has done this twice:
      • the first was a great purchase,
      • the second regrettable – there will not be a third!
      • However busy, try before you buy.
    • Not so risky if only letting as you can walk away after the tenancy expires.

    Block Management

    • Blocks of apartments or flats let by agents.
    • This involves acting for freehold and leasehold owner landlords who in turn let to their tenants.
    • Flats are always owned by leaseholders unless there is only one owner who is the freeholder.  Where there is a leaseholder there is always a freeholder.
    • Common areas are managed by agents including gardens, cleaning and insurance, in addition to any maintenance.
    • Common-holders are owners of portions of a block of flats.

    BMV Below Market Value

    • Buying property below the perceived market value.
    • Often involves buying property from ‘motivated sellers’ of distressed property in pre-foreclosure status.
    • Home owners about to lose their homes are encouraged to sell to such buyers on the basis they can remain in their own homes as ‘tenants’.
    • Any debt on the home is normally repaid by the investor.  The investor gains the advantage of a reduced price property whilst the seller avoids bankruptcy and having to move.  Allowed to remain in the same home a compromise is achieved.
    • Controversial topic with dome investors selling within a short time of purchase resulting in the home owner now tenant becoming homeless.

    Boiler Servicing

    • This is not the same as procuring a gas safety certificate.
    • It is ideally conducted at the same time for a nominal extra fee to the heating engineer.
    • This is an additional means of protecting three persons:
      • The tenant from C.O. poisoning.
      • The landlord from being sued by the tenants or their executors.
      • The Agent from being sued by all and potentially prosecuted by HSE for not taking all reasonable steps to ensure tenant safety.

    Bond

    • In a lettings context, bonds are used as an alternative to a money deposit.
    • The word bond indicates “binding” – in this instance a binding agreement between a local authority (LA / City Council) and a landlord.
    • Whilst a money deposit would be preferred by a landlord the bond offers a compromise.
    • A government protected bond obviates the requirement for mainly social housing tenants and those on low incomes to fund a deposit.
    • In the event of non payment of rent a landlord can invoke the terms of a bond to recover non payment of rent.
    • A bond is primarily aimed at protecting rent and is less likely to provide protection of damage to property.  In any event a ceiling is set to limit government exposure to excessive loss.
    • Vulnerable prospective tenants include: benefit recipients, the young or elderly all with insufficient funds to pay a money deposit.  They can instead approach LAs and request bond assistance.
    • The LA or Local Council will not pay any money unless retrospectively the tenant fails to pay.  The tenant will be required to repay the loss suffered by the Council.  The landlord will be reimbursed for any loss covered by the terms of the bond.  The bond invariably includes numerous exceptions to avoid expose to both abuse and excessive claims.
    • Without a bond many prospective tenants would be homeless.
    • When drafting a contract for a tenant entitled to rely on a bond the normal requirement for a deposit can be either waived or  simply entered as a value of £0 or £zero.

    Booking / Reserving A Property

    • This describes any procedure required to secure your selected house.
    • Rebooking for a further year can involve as much work as the initial reservation if busy current tenants need constant reminding to provide further information.
    • In the worst cases a landlord / agent will retain a property for current tenants who insist they want to stay but offer compelling reasons for not formally signing (out of the country, on holiday, in hospital, etc.), e.g.  Then after the student viewing season has passed, decides to leave before signing the renewal.
    • This leaves fewer available students to fill the vacancy.
    • In some instances a void is created as a consequence of the kindness in keeping the property.
    • The agent is unfair if they do not wait and:
    • Negligent if they do but consequently do not secure a letting.

    Break Clause

    • A tenancy agreement clause permitting either or both parties to prematurely end or break their tenancy agreement.
    • This said, there is an exception to this rule:
      • within the first 6 months of an AST only the tenant can enforce a break clause.
      • The landlord must be content to wait 6 months before the courts will permit him to attempt to end the tenancy, with or without a break clause despite the inclusion of the break clause in the AST.  Statute prevails over contract!
    • With mutual agreement, no minimum notice period is required. Should just one party disagree, then the legal procedures must be carefully followed.

    Bridging Loan

    • When a buyer has temporarily insufficient funds to complete a property purchase, he might use a bridging loan to enable completion.
    • This is a short term loan pending release of funds from an expected source.
    • It may be e.g. that the lender of the main mortgage retains funds pending property repairs.
    • I once bought two properties but the lender held a retention i.e. would not release all the funds, until after the two houses were knocked through to create a single dwelling.  On the day of completion, armed with a sledge hammer, I knocked a hole through the adjacent properties.  I then phoned the lender who sent a surveyor to confirm, before releasing the balance of funds within a few days!  Viola.

    Broad market Rental Areas BMRA

    • This is a government average of the value of rents in a given area
    • It is used to calculate Housing Benefit / Universal Credit CC

    Broker

    • One who specialises in arranging say a mortgage or insurance cover as required.
    • A good broker is indispensable.
    • Not only will they act with integrity and ensure you pay the lowest interest rate possible, they will also get you the best deal available, perhaps the only deal available!
    • Speaking personally my broker once advised me to go to my bank as the interest rate would be cheaper than he could offer.  This was soon after the 2007 crash.  My bank it transpired, “had no appetite” for this commercial loan investment.  Returning to the broker the deal was secured via the broker’s lender – another bank.  This deal is our shop from which we now trade!  The broker is Chris Longhust of Mortgages for Business – cheers Chris.

    Brown Goods

    • Traditionally wooden furniture.
    • See also white Goods – traditionally metal kitchen furniture.
    • White and brown goods describes most house furniture.

    BTL Buy To Let Mortgage

    • Designed specifically for investors / landlords, BTL loans are based, not on the affordability of the borrower, but on the viability of the loan.  Viability is based on two main factors: loan to rent ratios coupled with loan to value.
    • This is in contrast to home owner /occupiers, whose mortgages are based on less reliable ‘affordability’, linked to their “earned income”.  A job can be lost in a moment; rental income is more secure.  Rental income, however hard gained, is not categorised as ‘earned’.
    • Bye Bye Buy To Let:

    • Proposed EU rules could see new BTL mortgages withdrawn.
    • Reckless lending and borrowing resulted in some home owners losing their homes and in rare cases, investors losing their investment properties.
    • This resulted in cries for regulation.  It is right that residential borrowers are protected by regulation.  And to a lesser extent commercial borrowers also.
    • Analogically, the problem could begin with a life-saving transfusion of regulation, to which the patient investor, together with the entire economy and population, is tragically allergic.  The protection intended to cure, could kill vulnerable patients.  But will Dr. EU, first test for an allergic reaction, before emptying the syringe into the lifeblood of the UK housing market?!
    • How might any new EU rules curtail new BTL mortgages?

    • Current BTL mortgages will continue until their terms expire, after which time loans cannot be renewed as a BTL.
    • The consequences would be manifold.
    • Existing mortgages falling due for repayment may not be extendible!
    • This is the point at which investors will be waving bye bye, buy to let.
    • Regulation

    • The reasoning for requiring “affordability” in light of historic economic evidence is compelling and actually sounds prudent, at first; but upon closer examination proves specious.
    • It is imprudent to categorise landlords and investors as ‘residential borrowers’ in need of ‘protection’.  These are savvy business investors, normally required to be existing home owners, whose affordability is already pre-established by track record.  In addition borrowers must pass strict Buy-To-Let rules and satisfy the loan to rent ratio LTR is, in fact, affordable. This is easily verified by conservative surveys conducted by independent surveyors, who are accountable to the regulatory body RICS – Royal Institute of Chartered Surveyors.
    • With all this existing protection and the low number of BTL failures, what is the need for further regulation?  It is as un-cool as putting a gilded notice on a fridge, warning: ‘it is cold inside – wear a coat before opening!’  Protection rackets are not normally linked to the EU but this stretches beyond the borders of the English Channel and any logic.
    • Immediate Effect

    • The wider implications are really serious for all.
    • Lenders will be unable to lend if investors cannot include rental income to demonstrate affordability.
    • Investors could in future be unable to: borrow, re-mortgage or extend mortgages.
    • Consequences

    • For those who are low geared and well established, this might give rise to a minority monopoly resulting in increased rents in the absence of significant competition.  Paradoxically, since improving competition is one of the aims of the directive calling for reform, the opposite effect is likely.
    • This will come at the expense of the majority of landlords who might ill afford mortgage redemptions in the absence of the BTL model.
    • In turn, this could precipitate the sale of entire property portfolios.
    • Were this to occur, an unplanned property sale would mean a massive CGT liability could wipe in a stroke any property portfolio like a downward vortex.
    • Consequently, tumbling house prices could erode the savings even of non-investors.
    • Renters will also be affected if they are evicted and unable to find alternative housing.
    • A double whammy awaits, causing a double dip too many.  Catastrophic consequences for the British economy entirely ‘unhomemade’, by ‘Euromade’ mania.
    • This is compounded by the cost of mortgage transfers, if they are available. Some borrowers may have lost credit status since mortgage inception, preventing their securing a transfer to any ‘responsible’ lender. Their only option is to redeem. Meantime for some, particularly in the north, equity falls means a shortfall even after redemption.
    • A mass exodus of BTL mortgages would see creditworthy borrowers relinquishing low rate MX deals ahead of any approaching deadline introducing any new rules.
    • Lenders will not have sufficient funds and will selectively ration whilst raking in new business. Fees and interest rates will mirror their temporal monopoly.
    • Further, borrowers imprudent enough to have fixed-rate mortgages will also get clobbered with early redemption penalties.
    • The problem goes much deeper.  See separate article in conjunction with this one for the impact for MX customers – this is almost worse, because it is not a proposal it is reality now
    • See also:
    • Draft Directive on credit agreements relating to residential property.

    Build to Rent

    Building Control

    • This is a local government body overseeing building works which require approval.  Examples include anything structural such as demolishing walls and installing lintels where walls are knocked through.  Newly installed drains may need to be tested to ensure the correct gauge pipes are in place and that they will not leak creating a health hazard.
    • A sliding scale of charges apply, depending on the cost of works and whether a Building Notice or Fully Approved Plans are submitted – the latter is cheaper but less flexible and takes longer to procure.

    Building Notice

    • This is a form submitted to Building Control enabling immediate start of construction works without the need for a full plans submission and approval.
    • It costs somewhat more but the time saved is often worth it particularly for relatively small works unlikely to be prohibited.
    • This risk is that in the absence of full plans approval problems such as discovery of underground drains might thwart construction with consequential loss.

    Buy to Sell

    • The process of buying (perhaps below market value BMV) and adding value buy say renovating, extending, securing planning permission, etc, in order to sell for profit.
    • Misjudging the market, many have suffered at a time of falling house prices, unable to secure even their original stake.
    • See also off plan, rent to rentsub let

    C

    CAB citizens advice bureaux

    • The legal organisation to which individuals should be referred when submitting a notice to quit.

    Cancellation

    • Tenants having reserved a property cancel the reservation.
    • There is a short period of time during which certain tenants and especially students, look for a house with respect to the following academic year, say November to January.  The peak month is normally November.
    • Where a group firmly reserves a house and then cancels the reservation, agents may have little choice but to accept less than suitable substitute tenants to secure a booking.
    • This can cause considerable losses. By the time of the cancellation there may be a smaller pool of tenants to choose from.  This is because most student have now secured accommodation elsewhere leaving potentially unsuitable substitute tenants which letting agents or landlords may be reluctantly obliged to accept in the absence of choice  This may prove problematic and costly.  This can result in a cancellation fee.

    Cancellation Fee

    • See Cancellation – the charge to compensate for loss(es) resulting therefrom.

    Cannabis Farms

    • These are increasing within HMOs and cause serious damage to the property and normally result in unpaid rent before Abandonment.

    CAP

    • Committee of Advertising Practice
    • This body provides guidance on how e.g. advertising should be transparent say with regards to non optional fees.
    • See also ASA – Advertising Standards Authority

    Capital

    • Capital is the value of bricks and mortar and fixtures as opposed to
      Revenue which is the rental income.

    Capital Gains Tax

    • Tax payable on the sale or transfer of property after any exemptions. A house formerly occupied by an owner will normally automatically be exempt from the first three years of any gains. Living in a house whilst renovating is not classed as residency!

    Capital Repayment Mortgage

    Carbon Monoxide Alarms

    • Carbon monoxide (CO) is described as the ‘silent killer’ because it cannot easily be detected with effects symptomatic of other problems like lethargy, cold or flue etc.
    • Whilst not a legal requirement in 2014 it is only a question of time before it will be compulsory to fit these.
    • Unlike smoke alarms which might be fitted in several locations, only one CO alarm is likely to be required to protect tenants.
    • See also heat detectors, gas detectors, boiler servicing, gas safety certification.

    Case Law

    • Judge made law case by case
    • Compare Act of Parliament
    • Acts of Parliament must be upheld and enforced by judges
    • However, Acts are not always clear
    • Judges interpret what parliament intended when enacting.
    • Judges may disagree with each other resulting in cases starting in:
      • County courts being overturned in
      • Crown Courts and reversed in the
      • Court of appeal and reversed again in the
      • House of Lords before being overturned in the
      • European Court of Justice.
    • Senior judges must be followed by less senior judges unless they distinguish between cases with different principles.
    • The case of Street and Mountford below is one such example of case law.

    CEDR

     

    Centre for Effective Dispute Resolution CEDR

    • A professional dispassionate means to resolve disputes.

    Certification

    • Includes documents certifying the safety of e.g. gas, electric, fire safety, EPC, etc.

    Chain

    • The number of buyers and sellers in a series of property transactions or sales is a chain.
    • Ideally the shorter the chain the quicker the sale and the converse. The risk of the chain collapsing  increases with each additional property involved.
    • If just one buyer or seller has a  change of mind the whole chain collapses with no one able to buy or sell.

    Change Of Use

    • Normally associated with differentiating commercial properties, office and retail.  In some it instances affects residential use too.  See Class C 3residential and C4 HMO use.

    Chattels

    • Removable goods and possessions as opposed to bricks and mortar buildings with fixtures.

    Check-In Tenants

    • The process of enabling tenants access to their new rented home and ensuring all is well.
    • Ensuring all keys are provided and are opperational with explanations on how to opperate (lift handle before turning key to lock etc.).
    • Ensuring tenants have sufficient information to opperate the variety of appliances – in particular the more complex things like the boiler which often has several components required to be synchronised before the water and heating will work as desired.
    • Ensuring TV controls are easily understood is another point.
    • Internet controls can be complicated with passwords required to connect.
    • Pointing out the location of isolating valves and switches is important to avoid a flood, electric shock and gas poisoning.
    • The simplest way to enable communication for most is by providing a clear manual – “Welcome Pack”.
    • Establishing the condition of the property and that it will be compared with the condition at the end of the tenancy.
    • Securing any signatures and advising the requirement to report any contra findings quickly or within a reasonable time from occupation to discover an discrepancy in the inventory compared with reality.

    Check-Out Tenants

    • The process of establishing the condition of a property upon departure of tenants in comparison with the condition upon arrival.
    • Ensuring all keys are returned and ultimately that the property is made ready for the incoming tenants.  This invariably requires professional cleaners or the house cleaned to a professional standard to establish the point of reference for the standard required at the end of the next tenancy.

    CIH

    • Chartered Institute of Housing
    • A qualification based membership related to housing.

    Civil Law

    • Civil law matters are outside the remit of statute law.
    • An AST is the result of statute law but enforcement of an AST is a civil matter.
    • A tenant breaching the terms of an AST is not normally a criminal matter so the police will normally be unable to assist.

    Claim

    • A legal claim to a perceived entitlement such as rent arrears owed by a tenant to a landlord

    Claimant

    • A claimant is a person making a claim against a respondent in court in an attempt to restore or recover a perceived loss or to recover arrears of rent etc.
    • Formerly AKA plaintiff and defendant changed because the defendant was often wrongly perceived as the one in the wrong when he need not be.

    Class C

    • Class C 3 Residential dwelling houses
      • a. family
      • care home
      • single households
    • Class C4
      • HMO 3-6 unrelated tenants forming 2+ households
      • Prior to Article 4 Directions (A4D) significantly less permission was required to modify such properties.
      • Following an A4D a garage extension would require permission.
      • If converting from Class C 3 to C4 planning permission is required simply to be allowed to rent it.
    • See also Permitted development and Planning permission.
    • See Sui Generis
    • See HMO, Large HMO and Licensable Property

     

    Claw Back

    • Housing benefit overpayments may be clawed back from tenants and aven landlords if they were aware the tenant was not entitled e.g. the tenant is no longer resident.
    • See actual occupation.

    Cleaners – Cleaned to a Professional Standard

    • The importance of a thoroughly clean house at the start of a tenancy cannot be overstated – whatever the cost!
    • The phrase “professional cleaned” or “cleaned to a professional standard” is not a legal requirement but failure to do so is likely to result in a legal dispute at the end of the tenancy.
    • It is no longer acceptable to demand the tenants engage professional cleaners at the end of the tenancy.  It is now more politically correctly stated that a house be returned, “cleaned to a professional standard” on the basis that some “amateur cleaners” – you and I, are capable of cleaning to a higher standard than some “professional cleaners.”

    Cleaning / Professional Cleaning

    • In order to evince a property is unclean at the end of a tenancy the landlord must first evince it was professionally cleaned at the outset.
    • This is most effectively achieved by systematically ensuring that no one moves in prior to cleaning.
    • This is not always possible with back to back tenancies, but should be done at the earliest opportunity.
    • Failure to do this is failure to evince at the end of the tenancy that the tenants are responsible for any mess found.
    • Ideally an independent professional cleaning invoice together with an inventory list of anything less than clean is documented.

    Cleared Funds

    • When transferring money from a tenant or landlord account to an agent, money leaves the donor account but may take time to be received or visible in the agent’s client account.  Letting rules require compliant letting agents to ensure they are in receipt of cleared funds prior to acting in reliance of those cleared funds.  An agent may be held negligent and responsible for the consequences of acting prematurely.  The temptation to do so is heightened by  pressure to act quickly in an emergency – agents must remain calm and wait!  See retention  if a letting agent stands as surety even for a small amount it acts contrary to all the rules!  Apart from the rules this is lending which requires a lenders license.

    Clearing UCAS

    • The process of finding available university places in mid-August following release of A level results is called Clearing. Actually available between July and September, it assists those without a university place to find a suitable vacancy.  Anyone applying to university will have completed entrance application forms and visited a number of first preference campuses.  Should an applicant not secure the required A level grades for first choice entry, then an alternative search for a place via clearing is the last resort.  Universities and undergrads are matched to mop up remaining vacancies.
    • First year students normally only secure accommodation in halls of residence if the university is the students first choice.  It is thus common for clearing students to rent from private landlords for the whole three years.
    • There are some suggestions that degree courses could be done in only two years.  If so this would seriously jeopardise the letting profession in all university cities like Canterbury.  Universities would then accommodate students for 50% of the time students attended university, as opposed to the current circa 30%.  This would worry most landlords and the consequential displacement of the letting market.
    • Some students are opting to study abroad utilising English speaking courses, in say Holland, The fees are significantly cheaper; the accommodation costs may be more expensive.  The net gain makes this an alternative option for some students.

    Client

    • Includes firstly the landlord client, and secondly to tenant customers often treated as clients.
    • The agent acting has a duty of care to both.
    • The first duty is owed to the landlord whose conditions for letting must be applied to any subsequent tenants.
    • Beyond this, the duty is unbiased.

    Client Account

    • This is actually a client-bank-account held in trust by agents on behalf of clients.
    • It is the account into which all clients money is placed and ring-fenced and
    • Should not be used to prop up the cash flow of ailing businesses during lean times.
    • In the event an agent goes bust the tenants and landlord client can quickly receive the return of their money from this secure account.
    • This should include any student or tenant’s:
    • When funds clear, money should quickly be forwarded to recipients when due.
    • The balance of a client account should never fall below the total amount owned by, or owed to, all the clients.
    • The agent is in a unique position of trust.
    • To betray this trust by utilising the funds for other than the purpose promised is not merely theft but the more serious deceptive act of fraud.  This is a criminal offence carrying a potential custodial sentence.
    • Ironically such accommodation is rent free, but not recommended!

    Client Conflict Of Interest

    • Some landlords are also Letting Agents- LANLA’s. These  Property professionals own one house or a personal portfolio of homes, whilst  simultaneously letting others on behalf of their client landlords. This might  give rise to a conflict of interest.For example: imagine that all but two houses have been let. The student viewing season is almost over. The first of the two homes is owned by the LANLA; whilst the second is owned by his client. A group of  students, having viewed both, cannot decide, since they are equally suitable.  Now they seek guidance on which to choose? Does the LANLA flip  a coin or ask the prospective tenants to choose? Is he able to resist the  temptation to prioritise his own interests? The following might avoid any such  conflict and establish integrity.
      • Any ethical dilemma is quickly resolved by ensuring the personal portfolio always takes second place. Such policy must be decided upon prior to the  predicament. Human nature is self-seeking until harnessed by a highly developed  conscience.
      • The question “yours or mine?” i.e. which one should be marketed first; ought  never to arise.
      • If the LANLA works hard and markets accommodation properly  he will normally let the remaining personal house in due course, whilst  retaining his integrity meantime.
      • Ultimately this is not merely the most ethical, but also the most  commercially advantageous approach.
      • The LANLA will receive commission as agent for the client, in  addition to the rent from his personal portfolio. Win: Win!
      • Showing preference risks not merely losing any commission (in the event the  house is slow-moving and the client defects), but moreover the LANLA   ‘s reputation.
      • Always favour clients in the event of any such conflict.
      • The advantage of using a LANLA with such dual experience  is likely to be reflected in the additional service provided.
      • Some letting agents do not share the same insights of a landlord.
      • Similarly, most clients do not share the extensive knowledge of an  agent.
      • With a foot in both camps the LANLA will likely enjoy a more  balanced understanding, sharing more empathy with the needs and personal  concerns of a fellow landlord.
      • In such scenario it may be a simple matter to allow tenants to choose for  themselves, being careful not to influence either way.
      • If tenants have no preference then it is best to rent the client’s house  first!
      • The above situation involves an ethical choice of properties by the LANLA . There are times when the dilemma is not the property but the  tenants.
      • Almost 20 years ago, a similar situation arose. In this scenario two tenants  were keen to secure either of two houses; neither had a preference. Perfect –  what possible conflict could exist? Two tenants and two houses where is the  dilemma?
      • Both houses were aimed at professional tenants. Both tenants were  professionals. One tenant was a recent graduate; the other was an aging  builder.
      • Again, the first house was owned by the client whilst the second was owned  by the LANLA.
      • Statistically, the recent graduate was then less likely to be as reliable a  tenant as the gruff looking builder.
      • The client’s first impression was a prejudicial impressionism!
      • The builder’s physical appearance resulted in the client ignoring the  statistics favouring the more presentable graduate.
      • Having provided the client with the tenants and statistics, the client was  immediately persuaded, in his own mind, that the erudite graduate was the better  bet, despite evidence to the contrary.
      • The client was allowed to select: “It is entirely your choice; if the client  selects the builder on the left; then the LANLA will accept the  graduate on the right, for his own property” and vice-versa.
      • The builder went on to reside in the LANLA’s house for years;  whilst the graduate’s stay at the client house was short-lived and problematical.
      • The former was a model tenant who was never in arrears, whilst the same could not be said for the graduate. Never rely merely on a pair of eyes – always analyse the facts. Always act with integrity even if this means losing an opportunity, at least you will not lose sleep!

    Client Instructions

    • These must be followed unless to do so would contravene other rules such as the Equality Act 2010 and unreasonableness.
    • Instructions may include not pets but guide dogs and goldfish might be reasonable to accept.  No DSS is a common condition but cannot be enforced retrospectively e.g. should a tenant lose a job.  Girls only is discrimination on the grounds of gender but may be allowed, whereas sex discrimination on the grounds of sexual orientation – transsexual, gay or lesbian is not allowed.

    CMA

    • See the Competition and Markets Authority – CMA.
    • Effective from April 2014
    • Set up to assume some of the responsibilities of the OFT.
    • See also COMPARATIVE MARKET ANALYSIS CMA:
    • This body now regulates letting and estate agents and can prosecute breaches of the code of practice including confiscation orders where the proceeds of such acts result in benefits to those consequentially in breach.

    CMP: Client Money Protection

    • This is a form of insurance designed to protect client funds.
    • Normally provided as part of certain regulatory bodies membership including:

    ARLA, UKALA, NFOPP, NALS, RICS and The Law Society.

    Co-regulation

    • An alternative to government (top-down) regulation.
    • Regulating the letting industry by cooperation between local authorities and letting associations.
    • Alan Ward of the RLA promotes such a concept.

    Commencement Date

    • The date the tenancy starts.
    • Leydon Lettings normal start date is 1 July in any year.

    Commission

    • Letting agents charge commission to rent, manage or find tenants on behalf of landlords.  This is normally deducted from rent but must never be deducted from a deposit which must be retained in accordance with the scheme rules in a client account.
    • Estate agents selling an owner’s property are entitled to commission.  However, there are situations where estate agents argue about which agency was responsible for introducing the tenant or buyer and who contributed most to the sale.  In sales, always check the terms and whether it is based on Sole Agency, Multi-Agency as well as what happens if the seller sells to say a friend or neighbour where the agent takes no active part in the sale.  Foxton’s v hamptons 2008 is a case in point. Held: the agent claiming commission must be the effective cause of the sale where more than one agent contributes.
    • Note that both selling and letting agents are likely to have a Tie-In period of say 6 weeks to 3 months.
    • Sole selling rights means the seller’s appointed agent is the only one permitted to sell within the tie-in period and commission is likely payable regardless of involvement in the sale when sold.  If the buyer is “ready willing and able” and the seller decides not to sell then the seller may be liable to pay the agents commission.
    • Sole agent is slightly different in that if the seller finds the buyer the agent is unlikely entitled to any commission.
    • If you limit the number of agents to two, this is called a joint sole agency.  The fee is normally higher and the agents split the commission between them following sale.
    • Notice periods follow the end of the tie in period.  E.g. sellers provide say 14 or 28 days notice advising the agent of the intention to end any agreement with the agent on the final day of the notice leaving the seller free to sell themselves or through an alternative agent.
    • Agent tactical switching can involve starting with one agent for an agreed short term say up to 6 weeks.  In the event the property remains unsold the seller invites multiple agents at a higher feet.  The first agent is thus incentive to sell within the initial period and the seller takes advantage of the potentially lower initial commission.
    • In a 2015 a landlady Mrs Collins successfully argued that no further commission was due the agent following failure to provide adequate notice of her intention to sell her rented home, managed by her letting agent.  Having evinced the sale it was held: In order for the agent to charge commission in such circumstances, an agent must prove is suffered a material disadvantage and consequential loss.  Since the tenancy would have ended anyway no loss was suffered so no claim for breach was acceptable.  Note had the property not been sold the commission would likely have been payable.

    Commissioning Certificates

    • Following the installation of a new boiler or electric wiring system a certificate is required by Building Control to confirm it is complete and thus safe.

    Common Hold

    • Common-holders are owners of portions of a block of flats.

    Common Household

    Common Law

    Common Law Tenancy – CLT

    • The law is subdivided into two parts.
    • The latter covers this type of tenancy.
    • CLTs are suitable for non- ASTs
    • Common Law rules apply to any such CLT eviction and not AST rules.
    • S.8 and S.21 notices are not available for evicting CLT tenants.

    Common Parts

    • Common parts of a property – any shared portion of a home such as:

    Entrance hall, or amenities such as kitchen, bathroom, toilets etc.

    Company Lets

    • A non AST is used for letting to companies and some non- companies – see CLTs.

    Comparables

    • The process of comparing the value of one property with another.
    • This can be required to establish a realistic property valuation.
    • Lenders will require surveyors to secure adequate comparable to ensure it is not exposed to excess risk
    • Investors  will require surveyors to secure adequate comparable to maximise the loan to value to increase any potential leverage.
    • See AppraisalsSurveys and valuations.

    Comparative Market Analysis CMA

    • This is a service offered to landlords or sellers establishing the value of rents or sale price following any recommendations for improvements to optimise either.
    • Many agents perform this service for free in anticipation of being offered an instruction to sell or let a property.
    • The agent having thus expended significant time, learns the owner has walked away with the agents efforts at no cost to the owner.
    • Some agents will only perform this service following instruction.
    • This chicken and egg scenario results in much agent disappointment.
    • Other organisations suffer the same dilemma including specialists asked to report on say timber condition with a view to instructing such contractor to effect any repairs.  Free quotes from such organisations are now most often chargeable.

    Compatibility of House-Mates

    • See Mature Students
    • PGCEs are unlikely to be compatible with undergrads.
    • Politics and religion need not divide, tolerance and consideration are more likely to determine whether a group are compatible.
    • Age can be important.  Younger students are more likely to want to play loud music and to want to return home late potentially disturbing any older house-mates.
    • One cannot discriminate on the grounds of age, but a group of young girls cannot reasonably be expected to share a house with a middle aged man.

    Competition and Markets Authority CMA

     

    • The CMA is concerned with consumer rights and Consumer Protection Regulations CPRs.
    • Landlords are both consumers and providers of accommodation to consumers.
    • Letting agents provide a service to both landlord and tenant consumers.
    • In April 2014 the CMA adopted some of the responsibilities of the OFT particularly in relation to fees.
    • Fees chargeable up front, or that are not within the control of a tenant, such as exit fees, must be published prior to marketing.
    • Late payment fees are within the control of a tenant so do not need to be published.
    • However, fees charged by the agent must be unambiguous and disclose any source of income from tenants and or tradespeople to landlords.
    • CMA also address unacceptable service levels and repairs.
    • CMA provide for 5 categories:

     

    • Consumer Protection – B2C
      • B2C = Business to consumer dealings.
    • Business protection – B2B
      • B2B = Business to Business dealings
    • Unfair Terms in consumer Contracts Regulations 1999(UTCCRs) – B2C
    • Supply of Goods and Services Act 1982(SGSA) – covers contractual terms
    • Unfair Contract Terms Act 1997 (UCTA) – B2C, B2B

     

    • Issues include distance selling.  The latter does not apply to tenants as housing is an essential service.  However, guarantors as well as landlord clients are protected by the act, with now 14 days cooling period, during which time consumers may withdraw from any agreement not face to face. See article: http://213.120.142.153/drupal/coolingoffperiod
    • As a consumer, tenants and landlords are entitled to protection from agents that must provide accurate property descriptions.
    • The tenant will normally be a consumer; however, a company let is likely to be a B2B dealing.
    • Large portfolio landlords are likely businesses.
    • Landlords with one or a few properties are likely consumers.
    • Whatever the category, regulations apply to greater or lesser extents with more progressively more protection offered to more vulnerable consumers.
    • Agent’s renewable fees to landlords are likely to be deemed unfair unless there is significant work or costs involved.
    • Agents charging landlords for tenant finder fees for continuing tenants is not a fair if no further work is involved.
    • Classic additional charges should be published upfront for landlord perusal:
      • Inventories
      • Check in
      • Check out
      • Credit checks
    • Honesty in dealing is essential:
      • “Ideal BTL ” is a misleading statement if located in a locality controlled by an Article 4 Direction.
      • “Tenants waiting!” or “Landlords waiting!” must be a statement of fact not merely an inducement.
      • Agents and landlord descriptions must not include or exclude “material” information. “minor improvements required” is a misleading description of a derelict property scheduled for demolition!
      • Transactional decisions must be based on true statements.
        • “Sea views” would be misleading if blocked by Dungeness power station – true analogy!
        • “Tranquil terrace” next to a noisy haulage company operating 24/7, likewise.
        • A tenant could sue for lost time and costs spent viewing such properties if they would not have viewed, but for the mis-description.
        • Claims to membership of a trade body must be true.
        • Rules of membership of such bodies must be adhered to if advertised as members.
        • Agents must not rely on landlord statements as true until proved.
          • Gas certificates held by landlord must be provided for verification to agents.
          • In the absence of such verification the agent is obliged to instruct another inspection to procure certification.
        • If a tenant fails a credit check but the tenant has not been dishonest and the landlord rejects the tenant then any payments made by the tenant must be returned.  The landlord is obliged to pay the costs if the landlord has been warned by the agent e.g. in the terms of business that he would be responsible for costs of such failure.
        • Tenants and landlords must be told before signing or committing, how to end an agreement and any costs associated.
        • Any AST deposit must be properly administered and protected with clear details of the scheme.
        • Landlords must not issue retaliatory eviction notices or operate in a vengeful or harassing or aggressive manner towards their tenants.  No fault evictions, in response to a complaint, is contrary to CMA guidance.
        • Landlords must not enter a tenant’s home to discuss rent arrears without their permission.
        • Refusing to return a holding deposit must be reasonable.
        • Tenants responsible for utility bills must be provided with the supplier details and not unreasonably prevented from switching.
        • Landlords providing bills packages and that are responsible for payment need not agree to switch.
        • Repairs and maintenance matters must be prioritised and conducted in a professional and timely manner.
        • Landlords and agents have a duty to disclose to prospective and current tenants within a reasonable time any serious defects at a property.
        • Furniture damage should be replaced with the same or better quality.
        • Client money should be ring-fenced in a client account and landlords ideally paid within 5 days of receipt but within one month in any event.
        • See more at Lettings Guide.

     

    Complete Completion, Completion of Sale

    • The final stage of a property purchase resulting in release of keys and access to the property.

    Compliance

     

    • Letting property, involves minimum requirements, rules, housing standards and certification for landlords and their letting agents to comply with.
    • Any neglect, could result in: compromised safety,  tenant fatality, landlords / letting agents suffering loss, being sued or prosecuted.
    • A good way to ensure compliance is to have a check list.  Do not rely on memory or others.
    • Computer software systems employed by letting agents provide reminders to renew certificates (gas, electric, EPC).
    • Spot checking is prudent to ensure that any systems relied on, actually work.  Some computer systems only provide reminders once a minimum of basic information is uploaded.  Failure to upload could result in the absence of a reminder.
    • Should a box remain unticked it is possible for a reminder to be neglected.
    • Having established a sound infrastructure it can be beneficial to go beyond mere compliance.  Often the cost to supply and fit say one mains wired smoke-alarm is not much less than fitting say a carbon monoxide alarm at the same time.
    • Fires emanating in the loft are unlikely to be detected until too late.  Likewise a gas escape could result in an explosion. A faulty boiler could result in CO poisoning. So why not fit: a smoke detector in the loft, a gas detector near gas appliances and a CO detector near the gas boiler?
    • Leydon Lettings supply all three.
    • Of course there is a cost attached. Of course it is not a legal requirement so some argue why bother?  There are, however, significant and compelling reasons for landlords to go over the top: their tenants are safer, the landlord’s property is better protected, it is less likely that a landlord will suffer rent loss due to preventable demolition. Your insurer is also likely to agree a lower premium – to say nothing of the primary motivation – to protect our tenants.
    • Some landlords are unconcerned about such matters.  So allow me to impart some additional motivation.  Should an incident occur, and a landlord might otherwise be guilty of negligence, he can rely on the defence of due diligence if: the landlord can establish that he took all reasonable steps to avoid the incident, which despite his efforts, nevertheless occurred.  He will not then be guilty of the offence!
    • Imagine that a tenanted house burned down due to say: 1) faulty boiler, 2)electrical fault, 3)gas leak, or 4) through careless tenants lighting candles.  What action could a landlord take to demonstrate due diligence?  Let’s take each point in turn:
    • 1) Most landlords erroneously rely on a gas safety certificate as sufficient safety protection.  Wrong!  This is merely minimal compliance.  A family car requires an MOT legally.  Few would neglect to service the car in reliance on an MOT simply because it is not a legal requirement to service.  If a motoring accident resulted in a negligence claim for compensation, it is possible for the vehicle owner to be sued in tort law, via civil litigation, for consequential loss resulting from failure to service the vehicle.
    • It is no different for a rented home!  Failure to service a boiler (in reliance on the gas safety certificate alone) is unlikely to protect a landlord against a civil claim.  This is particularly so if the landlord can be shown to have failed to have taken suficient reasonable steps to prevent the incident!
      • Likewise boilers require periodic servicing to ensure safety.  This is in addition to gas safety certification.  However, if the landlord can demonstrate that he only complied with the minimum requirements, but he also more than complied by fitting say: fire doors though not required, smoke, gas and CO detectors not required, an annual boiler-service not required, then such landlords could argue successfully defeat an allegation of negligence.

     

    Confidentiality Clause

    • A statement such as those added to the end of an email advising the receipient that the information is intended for the recipient only and that it is confidential.

    Confiscation Orders

    • Where the proceeds of dishonest acts result in benefits to those consequentially in breach of say lettings and estate agent rules the CMA can prosecute.
    • This can result in the sale of property with the proceeds of sale confiscated thereby denying those in breach from benefiting from dishonest gains.

    Conflict of Interest

    Consents

    • Prior to letting a client property the owners must provide consent to let.  Owners are not always apparent and prospective owners may not be owners.
    • See also permissions for the extent of this topic.

    Consideration

    • Most would think of this as the requirement to be mindful of others especially living in a community extending from your housemates to the neighbours in nearby properties.  Whilst this is increasingly important with the expansion of HMO communities displacing long term residents there is another meaning in relation to a contract:
    • Money or value – e.g. we agree to a discount of rent during the summer vacation for new tenants yet to arrive in say September in consideration of your agreeing to us renting to holiday makers in your absence.  Voila!  Returning tenants still get the discount but do not have summer lets so their possessions can remain.  Not all homes are discounted.
    • See also Estoppel
    • Consideration can be acts or ommisions in response to a promise and relied upon by the other to their detriment.

    Contact

    • S.48 of the Landlord and Tenant Act 1987 requires that a tenant is provided with an address where notices can be served on the landlord. This address must be in England or Wales and can be the name and address of any managing agent.

    Contract

    • In Lettings this is a tenancy, commonly called an agreement and most often an AST – but not always.
    • A contract can created verbally, in writing, or by conduct indicating a contract and a combination of these.
    • To be valid, a contract must include three core elements:
      • Offer – must be unconditional.
      • Acceptance – “Yes! I agree.”
      • Consideration – money or money’s worth.
        • When all three are present an agreement exists.
        • A counter-offer eliminates any previous offer.
        • What constitutes each element is debatable.
        • What can appear to be an offer might be merely an invitation to treat – window and web adverts.
      • In addition, to be valid the parties must:
      • have the legal capacity to enter a contract – e.g aged over 16 etc.
      • intend to enter a legally binding contract.
    • Ending a contract: (mnemonic P-FAB – Think of pre-fab)
      • Performance – when the contract term ends.
      • Frustration of the contract due to uncontrollable events such as fire, flood, storm-damage etc.
      • Agreement by the parties – mutually
      • Breach – when either party fails to perform a core obligation.
    • A tenancy contract to rent must include details of the3Ps:
      • Property  – address
      • Price       – rent
      • Parties    – landlord, tenants and any agent.
    • Remedies for breach of contract include SID:
      • Specific performance – enable the tenant to rent
      • Injunction – prevent the mischief causing the breach
      • Damages – compensate the tenant for non performance.

    Contractor or Tradespeople

    • Payment to such bodies must be recorded by the landlord or his agent to offset against tax and to enable bookkeeping and statement verification.
    • Agents are not permitted to order such work until the landlord has lodged cleared funds to pay in full or there is sufficient rent in cleared funds available to pay for the works.  Exceptions include “Agent of Necessity
    • An agent instructing a contractor on behalf of his landlord client will have to pay the contractor even if the landlord does not!

    Contrived Tenancy

    • A Contrived Tenancy is not a tenancy per se.
    • The classic authority is Street v Mountford
    • The type of tenancy is what it is in fact, in accordance with legal criteria, not merely in description.
    • Housing Benefit or Universal Credit fraud might uncover a sham tenancy where a tenant is really a non-qualifying relative.

    Conveyancing

    • The process of selling a property.

    Cooling Off Period

    • Where tenants sign away from a landlord or letting agent premises – whilst tenants do not necessarily have the right to a cooling period under rules from 1 July 2014 – guarantors do have have such a right.
    • Prior to 1 July 2014 the cooling period was 7 days but extended to 14 days under new rules.

    Core Terms

    • The core terms of any contract are the most important terms.
    • Lesser terms might be classed as ancillary terms.
    • The core terms are likely to include the commencement and completion dates, the term or duration of the contract, the rent  and frequency payable, the address of the property, whether utility bills are included. etc.
    • Ancillary terms might include the frequency of property inspections, redirecting mail after tenancy termination, etc.
    • The OFT  describe core terms as those “expressed or presented in such a way that they are, or at least are capable of being, at the forefront of the consumer’s mind in deciding whether to enter the agreement.”
    • Core terms should, whenever possible, be clearly stated at the start or front of a tenancy agreement, so as to avoid being overlooked or lost within an expanse of text.
    • Any potentially onerous terms are best highlighted.

    Corporate Landlord

    • A company letting a property to a tenant

    Corporate Tenant

    • A tenant which is a company or business renting a property.
    • In this situation sub tenants may occupy as directed by the superior corporate tenant.  This is a form of headleasing.
    • Establishing the legal personality of the tenant may be important to avoid failing to comply with what might then be an AST complete with deposit protection implications.

    Correspondence Address

    • The correspondence address to which one prefers mail to be sent to:
      • An absent landlord would not want bills sent to a rental property if that is not his main residence or if there is a chance the tenants might bin the mail!
      • Students, having graduated and returned to their family home, will not want their graduation certificate sent to their former landlords rented property.  Redirecting mail is important to prevent fraudulent use of another’s information and property.
      • Credit cards sent to a former rented address can be used dishonestly by subsequent tenants.

    Council Tax

    • Individual tenancies are treated differently to joint tenancies.
    • Students are treated differently to professionals.
    • Full time students are normally exempt.
    • Part-time students are not normally exempt.
    • A house fully occupied by benefit recipients who are all otherwise exempt ironically may nevertheless give rise to a Council Tax liability if they have individual tenancies and not joint tenancies.
    • Likewise a group of exempt students on individual tenancies would not constitute a student exempt house as this is classed as an HMO for which no exemption exists.
      • The responsibility to pay council tax arising from individual tenancies rests first with the landlord although this can be passed on to the tenants via proportionally increased rents.
      • If the tenants are not Joint Tenants this is likely the case
    • If a joint tenancy exists, the tenants; not the landlord, are jointly responsible for payment of C.T. at the band rate applicable.
    • If the house is solely occupied by “qualifying students” they are likely exempt.
    • Should circumstances change and a student drops out of uni., but remains in residence, then the house no longer has student exempt status.  However, only the non-student in this instance would become liable to pay C.T.
      • If only one resident is a non student then a 25% discount would apply reducing any liability.  However, band C equates to say £1200 pa in Canterbury and if this were the responsibility of just one tenant this is £100 per month less £25% = £75
    • Most houses are banded from A, B, C etc with A the cheapest and the last letter the dearest.  So if you live in a posh house and the house loses its student status, it could be expensive if you live in band F.
    • Most student houses are located in band C.  This fact is rarely relevant until a non student becomes resident.
      • Should students take in a lodger unknown to the landlord or agent and this person is not deemed to be exempt then  this could give rise to a C.T. liability.
    • Ultimately all residents are liable to pay unless exempt.
      • CT Exemption is not automatic, it must be applied for by asking the uni. registrar for a certificate of exemption.
      • Failure to provide certification to the City Council will give rise to a liability.
      • The City Council may backdate exemptions up to 6 months and occasionally longer if given good reasons for the delay e.g. bereavement of close family member.
      • Should circumstances change tenants must notify the City Council within 21 days, e.g. loss of entitlement to discount. The discount is applicable only for the duration of the course and this may last say 3 years.
      • However, if students remain in residence beyond the last day of their course then council tax is payable on a daily basis by all those still resident.
      • This is a good reason to leave quickly following the course termination date.
    • In the event the house suffers a void (including summer vacations), then owners become liable pro-rate, on a daily basis, with 90% liability – until a new tenancy is created.  New rules from 6 April 2013 indicate it will soon be 100% liability with no reduction.
      • It is ironic that just when a landlord suffers most he suffers yet more!
      • The policy behind this is not merely financial but to encourage maximum occupancy of housing stock to reduce homelessness.
    • Any non-exempt or non qualifying student substitute tenant could affect whether C.T. is payable in Canterbury see:
    • In Canterbury CCU and UKC students’ exemptions can be verified by The City Council if they have your I.D Card details. Leydon Lettings normally provide a table with all tenants’ details for this purpose but students should not rely on this and should submit their own application.

    Counter-Offer

    • An offer which when made automatically rescinds any previous offer – see contract

    County Court Judgement (CCJ)

    • If debtors owe rent or other monies a landlord can apply for a County Court Judgement (CCJ), through the County Court in the location of the debtor.  If the debtor tenant fails to pay, then the landlord must apply to the court for a warrant of execution – a bailiff will attend the tenant’s residence and seize goods to the value of the debt. The CCJ remains on the register for 6 years  if not paid within 30 days.  This will make it difficult for the debtor tenant to get a loan or a job.

    Courts

    • A building in which legal cases are tried
    • Most landlord matters will be conducted at the County Court.
    • See also small claims court and Alternate dispute resolution ADR
    • There is a hierarchy of courts dealing separately with criminal and civil matters with some overlaps all progressively dealing with the most serious matters and appeals: Magistrates Court, Crown Court, High Court, Court of appeal, House of Lords and European Court of Justice.
    • Court of protection – has a duty when selling a property to secure a fair and reasonable price.  I.e. not merely accept a forced sale value for convenience.

    Covenants

    CPRS

    • Consumer protection from Unfair Trading Regulations 2008
    • Letting agents must describe properties accurately and not mislead tenants with a misdescription or misleading information.Article 4 Directions
    • “Ideal investment property” in an area restricted by  would be a misdescription if planning permission was not implied or granted.
    • Creative reasoning is not acceptable – e.g. an agent reasoning in defense of such statement, that the property will increase in value, is disingenuous and misleading and need not even be true in a falling market.
    • In order to increase in value the owner is likely to need to let it meantime in order to pay the mortgage.
    • In any event an investment property yields both revenue and capital gains. Both should be achievable to qualify for the description, “Ideal investment property”.
    • See also conflict of interest  and fiduciary duty.

    Credit Checks

    • Tenants must be credit worthy.  This is established by vetting with credit checking agencies.
    • See the main referencing check-list and important Lifestyle referencing.

    Credit Rating or Credit Status

    • Few lenders will consider granting a loan until vetting the credit status of the borrower.
    • Companies specialising in providing an individual’s details include Experience and others.
    • It is prudent to check ones own credit status to avert identity theft and in case a county court judgement has been inadvertently entered.
    • A utility bill in the name of an absent landlord but instead sent to a rental property where it is ignored and left unpaid would result in a county court judgement.  This will adversely affecting the credit status of the person named on the bill.  In turn lenders will frown upon the borrower.  Thus credit checking one’s own status will reveal such judgements before significant damage occurs to ones credit status.  By contacting the sender of the bill and explaining that the correspondence address is not that of the rented property and paying the said bill, then the erroneous judgement will likely be removed from the register of judgements listing the entry detailing any failure to pay.

    Credit Reference Agency

    • An organisation specialising in verifying the credit wothiness of a prospective tenant prior to granting a tennacy.
    • Such agencies demonstrate independant decision making removing blameworthiness when a check fails.  It is not personal!
    • Any voids are likely to be devastating with such low margins.

    Crowd Funding

    • Goups of individuals contributing from £1000 upwards in order to acccess the property market.  The average contribution is under £4000.
    • This results in a lowish capital yield of say 4-5-6%.
    • Rent yields are as low as 5%
    • Not for home occupiers this is for Buy to let.
    • Popular in Manchester UK
    • Avoids some hurdles of going through lenders.
    • Gearing is more complex with selling somewhat more so.
    • Aimed at benefit recipient tenants (if not investors) the margins for profit are lower than in other letting genres.
    • At least it is a start on the housing market but not much of one.
    • Some investors could lose moneyu in a downmarket.
    • This is micro ownership rather than major investing.
    • Each owner owns a share.
    • The property is managed by a suitable letting agent capable of keeping the property let.

    Custodial Scheme

    • An independent means of holding a tenant’s deposit.
    • An insurance backed scheme is not independent but is protected by the insurance company in the unlikely event the deposit is not returned in accordance with the scheme rules.

    D

    Damages (2)

    • The damage caused by say a tenant
    • The legal remedy of damages to restore the injured party as near as possible to his position before injury.
    • Injuries include physical, psychological as well as financial losses.

    Dane-geld

    • Dane-geld is a medieval tax paid to the Danes to stop them invading England.
    • Can be used to describe a form of property related extortion, esp. regarding access to property.
    • Protected tenants have agreed to accept compensation to permit possession.  Some see this as an unfair levy.
    • Tenants who know their Housing rights and the difficulty of landlords enforcing breaches, may take advantage, resulting in landlords paying for what they are already entitled to.  E.g. tenants who demand to be released from their outstanding arrears of rent in order to agree to an earlier landlord application for a possession order.  Is this merely another form payment made under duress similar to that paid to the Danes via the Dane-geld.  The landlord in a lose-lose situation, would ultimately win the case but lose the interim rent over a protracted eviction and, from a tenant man of straw might never receive any arrears via an unenforceable CCJ.

    Data

     

    • Information contained in any form, e.g. paper, computer, image.
    • Identification Data describes any information in any medium from an independent and reliable source.
    • Data gatheringData protection

     

    Data Gathering HMRC

    • HMRC is entitled to demand that landlords and letting agents provide information regarding income from rents.
    • This can be initiated with a statutory notice under paragraph 18 of Schedule 23 to the Finance Act 2011
    • An appointment will be made to visit the landlord or letting agents premises for the purpose of gathering data.
    • Landlords who imagine they can avoid or worse evade tax are mistaken.

    Data Protection

    • Any landlord or agent must be registered if they retain potentially sensitive information.
    • In addition landlords have a duty to protect information and their tenants by following data protection rules.
    • Landlords and tenants:
      Disclosing information about tenants
    • This is a good practice note answering some frequently asked questions from landlords about :
      • How the Data Protection Act applies to them.
      • The information they hold about their tenants,
      • Information held on their behalf by a letting agent.

    Death

    • No one likes discussing this topic but someone must countenance it at some point, if only to determine “what if” a tenant dies.
    • The demise of a tenant need not end a tenancy.
    • The deceased tenant’s possessions belong to the decease’s Estate and cannot be disposed of by a landlord without consulting with the estate executors.
    • What are a landlord’s responsibilities following the death of a tenant.
    • What are the decease’s responsibilities to a landlord via his or her estate?
    • What is an Estate and is this the same as the next of kin?
    • A complex topic see Death, succession, Next of Kin, Estates

    Decanting

    • The legal process of transferring tenants from one property to another.
    • Most often associated with social housing and overseen by Decant Officers.
    • Applied in situations where properties have fallen below or never attained an acceptable housing standard or via natural disasters e.g. flooding.
    • Tenants may have a right to return to their original property following improvements or renovations – subject to time limits on length of occupation.  Alternatively tenants may have no right to return but a right to remain at their new dwelling.
    • Tenants may have no right to return and in some instances no right to be decanted and may simply be evicted.

    Declination of Prospective Tenants

    • Following vetting, should a landlord decline a prospective tenant, other than for failing referencing, the tenants deposit should be returned to the prospective tenant without question.  The landlord is responsible for paying the appropriate fee not the tenant.
    • If a tenant has a string of CCJs and neglects to say so upon being asked, the tenant may legally lose the holding fee.

    Deed of Assignment of Tenancy

    • A deed of assignment can cover the transfer of ownership of property, rent and other assets.
    • In a lettings context this is the transfer of a tenancy.
    • This might follow a student dropping out and another replacing the “drop-out“.
    • A document called a Deed of Assignment is prepared, often by a solicitor (but need not be).  This must be signed  by each of the three parties: Landlord, original tenant(s) and substitute tenant.
    • In addition each signature must be witnessed verifying that the signature is that of the named party.  The witnesses must provide their own signature and address in the event of a dispute as to the authenticity of a party signature.
    • The new tenant takes over from the old tenant usually releasing the original tenant.
    • Sounds simple in theory, but in practice is fraught with complications.  See Subletting and Substitution

    Deed of Guarantee

    • A guarantee signed and witnessed as a deed by the guarantor.
    • The guarantor agrees to pay the tenant liabilities in the event the tenant does not.

    Deeds

    Delegated Legislation

    • This is delegated power devolved from parliament and entrusted to local authorities
    • It enables local decisions to be made by local authorities.
    • See also the Localism Act 2011.  The Big Society!

    Department for Communities and Local Government DCLG

    • DCLG is a government body responsible for improving a number of localism issues including housing and communities.

    Department of Work and Pensions DWP

    • This is the government organisation responsible for processing and  paying housing and other benefits.  See Universal Credit.

    Deposit – Protection From 2007 – Renting

    Any AST deposits must be registered if the rent is

    • below £100,000 pa. Housing Act 2004.

    Exceptions are:

    • Deposits when required must be handled carefully to avoid inadvertently  breaking the law.  There are prescribed forms and time limits which must be adhered to, in order to avoid fines of up to three times the value of the deposit.
    • As an agent, additional care must be taken when returning certain deposits to tenants.  Agents must avoid becoming erroneously liable for subsequent recovery of deposits returned to a landlord for which the agent might be responsible for paying (again) to the tenant.  The landlord and not the agent might actually be the responsible party.  To protect an agent; the agent can require the landlord (who agrees to the release of a deposit or portion thereof) to provide an indemnity so as to protect the agent should there be a later claim from the tenants.  Claims can be made retrospectively up to six years!
    • With any deposit it is important to stipulate: Mnemonic i-padch (combination of i-pad and eye-patch triggers memory) :
      • Interest – specify whether payable to tenant
      • Protection – What the deposit is protecting
      • Amount – The amount of the deposit
      • Dispute – What happens in the event of a dispute.
      • Conditions – on returning within time limit.
      • Held –  Who holds the deposit – which scheme?

     

    Deposit – Purchase

    • The amount of capital (value) contributed to a purchase or
    • The value of an interest in a property (equity) contributed towards a purchase
    • The balance of the purchase is funded by the mortgage loan.
    • Say you buy a house for £100k.
      • You borrow £75k and you provide £25k deposit.
      • 75% LTV = 75% of debt you owe to the lender and
      • 25% of the deposit is the amount you provide to buy a property.

    Deposit Scheme For Regulated Agents DSPRA

    • The system used prior to the 2004 Housing Act as amended by the Localism Act 2011.
    • This was a voluntary scheme until the HA 2004 was implemented on 6 Apr 2007.
    • The new rules are mandatory for AST
    • Any other tenancy is exempt but can include the scheme voluntarily.
    • See Deposit Protection
    • See Superstrike v Rodrigues
    • See non compliance implications if not fit and proper person.
    • The maximum amount of deposit is two months rent or 1/6th of the annual rent.  See implications in Premium Tenancy.

    Detectors

    • There are an increasing number of home safety detectors:
    • Smoke Detectors to alert there may be a fire
    • Heat detectors (like smoke) but in a kitchen to avoid nuisance alarms.
    • Carbon Monoxide detectors to alert a potentially fatal defective flue.
    • Gas detector to alert unspent gas could result in an explosion.
    • Moisture detector to alert the humidification is too high or low.
    • Remote temperature thermostats alert landlords / agents to the risk of freezing pipes in winter if heating is below 13 degrees.

    Dilapidations

    • Damage to contents and property usually at termination of the tenancy compared with the inventory upon arrival excluding ‘betterment’ and any normal wear and tear.

    Direct Payments

    • This is direct payment of Housing benefit or local housing allowance to landlords as opposed to benefit recipients who then indirectly pass on the same payment to their landlords to cover the rent.
    • In order to encourage benefit recipient tenants to become more responsible with their finances and to overcome any stigma attached to such payments previously paid to landlords on behalf of tenants – the government policy is now to make payments indirectly to tenants and not to the landlord.
    • In limited circumstances payments will be paid directly to the landlord, if the tenant is more than two months in arrears or if the tenant requests it.
    • Landlords resent payments made to tenants and not directly to landlords because benefit recipients are more prone to spending the money allocated for rent on anything but rent.  The landlord suffers.
    • Landlords providing such tenants with accommodation feel they subsidise the state because the law set by the state contributes to tenant arrears and the eviction process prolongs the injustice with landlords watching months go by without rent whilst tenants “play the system” delaying eviction with impunity.
    • Altruistic landlords initially desirous to help less fortunate tenants soon become cynical as their kindness is exploited.
    • See also Universal Credit.

    Direct Repayment Mortgage

    • The means of re-paying a mortgage loan (see also interest only repayment)
    • Say you buy a house for £100k.
    • Say you borrow £75k
    • You thus provide £25k deposit.
    • 75% LTV = 75% of debt you owe to the lender and
    • 25% of the deposit is the amount you provide to buy a property.
    • In this instance you repay the mortgage by direct repayment.
    • This means the mortgage loan decreases inversely proportional to any equity increase  (amortization).
    • This continues throughout the term until the mortgage is repaid to the lender and you own all the equity.
    • This is in contrast to an interest only mortgage
      • The loan remains the same and
      • You repay using an alternative means e.g.
        • You sell and downsize, and
        • Rely on any inflationary property increase in value to repay the loan.

    Disabled Tenants

    Disclosure

    • Disclosure of information encompasses various areas.
    • In court when presenting evidence disclosure prevents “trial by ambush” since all sides are entitled to consider the evidence and prepare a defence.
    • A landlord introducing “new information” in court would require ‘leave of the court’ (permission) to present it.
    • Material Facts are a form of disclosure i.e. facts which are important to those requesting them.
    • Insurers require candid disclosure of facts material to risks affecting premiums.
    • Mortgage lenders set interest rates partly based on risk.  False information securing an offer not otherwise available is fraud
    • Landlords induced to enter into an agreement in reliance on false information may, under ground 17 of the housing Act 1988, evict a tenant for such induction.
    • Letting Agent have a fiduciary duty to disclose all fees charged to their landlord clients.
    • Some letting agents circumvent disclosure by loading service charges by 10 to 20% of the value of any maintenance.  The charge is not necessarily wrong but non-disclosure is!

    Discretionary Grounds

    • The grounds a judge has discretion over whether to grant an order for eviction (order for possession)
    • Discretionary grounds s.8 Housing Act 88 grounds 9-17.
    • See S.8 Housing Act 88 grounds 1-8 mandatory grounds

    Discrimination of Tenants

    • Discrimination was addresses by the Equalities Act 2010
    • This Act consolidated all previous discrimination Acts.
    • Illegal on the grounds of race, religion, colour, ethnicity, sex or disability.
      • Agents and landlords may be obliged to carry out reasonable adjustments for disabled tenants e.g. grab handles. Landlords are not normally obliged to make major alterations to assist the disabled although many do.
    • Note that age discrimination is only prohibited by employers.
    • When letting – a group of 20 year old girls seeking a house mate are entitled to exclude anyone based on any age, sex, or e.g. personality.  This is logical, otherwise tenants would be unable to choose their house mates.  Letting agents would be unable to reject unsuitable prospective tenants.

    Distance Selling

    • Accommodation is exempt from the rules normally applicable to distance selling.  However, guarantors of tenants may be entitled to a 14 day cooling off  period from 1 July 2014.
    •  the guarantor relationship could be treated separately from any tenant supported by his guarantor. The new rules double the cooling period to 14 days. Some house or room lets are time sensitive. Students happy to arrive in September do not like moving two weeks later in October.
    • There is a tangible cut off point capable of being compromised by the extended cooling period. It could affect unique situations: lets say the smallest least attractive room available in a house is last to reserve or replace a drop-out tenant and this immediately prior to start of term in September.
    • Were a student unable to travel quickly enough to view before a room was reserved by others they may book “blind” even paying the admin fee by phone (consideration). The room now booked means the landlord turns all other students away who will have found a home elsewhere within days not weeks. Two weeks later prior to expiration of the cooling time when all students have found alternative accommodation a guarantor refuses to sign the guarantor agreement and or deliberately fails the credit check by refusing to answer the questions.
    • The new rules will exacerbate an already tricky deadline without countenancing yet more.
    • This could result in a void potentially lasting one year until the following September when the same scenario could repeat ad infinitum.
    • With no Guarantor and little prospect of securing alternative student tenants mid October after term starts where does this leave the letting agent?
    • What advice does the agent give his landlord client?
    • The agent or landlord will likely have turned away many other last minute prospective tenants in reliance on any initial payment and promise of a guarantor.
    • During vetting a guarantor realising he is unsuitable refuses to answer credit queries thereby failing the credit check.
    • Where does that leave everyone… legally?
    • Worse the tenant may demand a full refund of the non-refundable administration fee!
    • We are always extremely reluctant to reserve a room or property “blind” when close to likely “cut off” points.
    • There is too little contingency time if things go wrong.
    • One is never certain whether any cut off point has already past!
    • Not until further requests are declined over the intervening  days FOLLOWING a reservation, does it become apparent that the property could have let to physically present tenants and guarantors.
    • The distant ‘bird in the hand’ on the end of the phone – is better than two still to fly in through the high street doors.
    • A foreign student cannot justify the cost of an advanced flight to view a room when such transactions normally occur without incident.  But with 14 days cooling, such incidents are now more likely.

    Dominant Tenement

    Double Agent

    • An agent acting for both the buyer and seller or
    • An agent who discloses the lowest selling price to the buyer in order to sell speedily.

    DPS: Deposit Protection Scheme

    • Two types:
      • Insurance and custodial:
    • Insurance backed,
      • permits landlords to retain and return deposits.
    • Custodial,
      • requires deposits to be passed to independent custodians to retain until termination of the tenancy.
    • Very strict rules require landlords to
      • provide prescribed information to tenants within 30 days
      • or the deposit to be registered within 30 days under
      • the Localism Act 2011 applicable from 6 April 2012.
    • Landlords accepting deposits will, from 6 April 2012 have tighter rules of compliance or
      • face a minimum fee of 1 times the value of the deposit
      • Or up to three times the value for serious breaches.
    • In addition landlords can be sued for up to 6 years even after the tenancy ends where landlords return deposits but fail to provide
      • the prescribed information and or
      • Register deposits within 30 days.
      • And that’s not all – the section 21 (Accelerated Notice) is not available if rules are breached, so no sympathy from the courts.
      • Effective from 6 April 2012.
    • Deposits taken prior to the protection scheme was introduced are not regulated, i.e. pre 6 April 2007 UNLESS,
      • you have renewed meantime.
    • No renewal requires no re-registering.
      • So a continuing periodic tenancy originating before 2007 is not required to be registered until first renewed and upon each renewal thereafter.

    Draft Tenancy

    • A copy of an agreement potentially unpopulated with sufficient information to enable objection or agreement prior to signing.

    Dropping Out

    • A void can occur if
      • a tenant swaps university or
      • leaves prematurely resulting in a vacancy within a home.
    • Normally the departing tenant and remaining tenants are jointly responsible for
      • finding a replacement or
      • paying the rent.

    See also Deed of AssignmentSubletting and Substitution

    Drugs, Students & House-Mates

    • I do not take illegal drugs so I have no need for concern – right? Wrong? If you share accommodation with others, students, professionals, benefit recipients, etc do you imagine your innocence will protect you completely? Do you know if they are taking drugs? Or, you may be aware but consider it is their life to do with as they please.

    Dry Rot

    Dual Benefit

    • This is a housing benefit payment paid for more than one home at the same time – but only if this is unavoidable.
    • A tenant in receipt of housing benefit is exposed to Dual Liability of rent or risk losing their new rented home to others.
    • See also Housing Benefit

    Dual Liability

    • A tenant moving from one house to another ideally stops paying rent for the first home whilst simultaneously starting to pay rent for the new home.
    • Unfortunately life is not always ideal.  The tenant is likely already required to provide at least one month’s notice to the old home landlord.  By the time the notice expires the house may be let to others.
    • Hence the occasional need to pay two rents for an overlapping period.
    • See also Dual Benefit.

    Due Diligence

    • Every landlord and letting agent or estate agent has a legal and moral duty to conduct themselves and their businesses responsibly.  Failure to do so could result in contractual or criminal wrong doing.  Disciplines and check lists are an effective way to ensure important matters are not overlooked.  Certification: gas, electric, fire safety, EPC, etc could be allowed to expire without adequate disciplines and checks.  This is part of due diligence.

    Due diligence

    • Every landlord and letting agent or estate agent has a legal and moral duty to conduct themselves and their businesses responsibly.  Failure to do so could result in contractual or criminal wrong doing.  Disciplines and checklists are an effective way to ensure important matters are not overlooked.  Certification: gas, electric, fire safety, EPC, etc could be allowed to expire without adequate disciplines and checks.  This is part of due diligence.

    Due process

    • Established in the Magna Carta this is the legal process required to allow the rights of individuals prior to establishing issues of justice.
    • The law does not work in isolation of the rights of individuals.
    • A tenant subject to eviction is entitled to be informed with proper notice and given an opportunity to defend the action.

    Dwelling

    • Any residence or place to live.

    E

    Easements

    • These are legal interests in land ensuring judicial certainty in the event of disputes (i.e. not merely equitable interest allowing judicial discretion as to the outcome).
    • Think of Legalease-ments (jargon) as op. Equitable Interests
      • Two Types of easement, Usage and Granted:
    • 1. Entitled by use – uninterrupted for 20 years without
      • Concealment (Secrecy
      • Force
      • Permission
        • (the mnemonic is a lettings software program)
    • 2 Expressly granted (i.e. documented upon sale of property in the property deeds).
      • Usu. involves two separately owned portions of adjacent land with a dominant right over the owners land by the non-owner.
      • This right creates a Dominant and Servient Tenement.
      • The dominant right benefits the non-owner
      • The servient tenement suffers the burden of the dominant non-owner using the right of way to access another nearby portion of land.
      • Such situations are usually clear in the deeds but can cause neighbour diputes when unclear.
      • The Law of property Acts 1925 provide the rules.
      • Examples include rights of [L.A.W.S.):
        • Light
        • Aqua (Water)
        • Way
        • Support e.g. a supporting wall.
    • See also restrictive covenants

    Effluxion of Time

    • Archaic term still found in modern tenancies.
    • Used instead of ‘expiration’.
    • The tenancy ended by effluxion.
    • The tenancy expired or reached the end of the fixed term.
    • If an agent takes on a tenancy with such archaic words, double check the date when the tenancy commenced – if it pre-dates 15 January 1989 it may be a protected tenancy.

    Electoral Role

    • Establish identity of parties by ensuring they are listed on the ER.
    • If not a more thorough search may be required or decline the parties.

    Electoral Role

    • Establish identity of parties by ensuring they are listed on the ER.
    • If not a more thorough search may be required or decline the parties.

    Electric Certification

    • There are various electric certificates:
    • Periodic Certificates at 5 yearly intervals or upon a change of tenancy.
    • PAT testing of Portable Appliances – especially important are ‘moving’ appliances like vacuum cleaners, irons, and washing machines which vibrate ‘nicking’ cables causing short circuits.
    • Part-P is normally completed by the electrician and provided directly to Building Control.
    • Commissioning certificates following renovation etc.

    Empty property Service

    • Provided by agents to landlords of unlet properties.
    • Not related to the rent as there is none.
    • Simply a set fee to attend and check there is nothing untoward: leaks, burglars, forced entires, windows closed securely, curtains open or closed as requested.

    Encumbrance

    • In short this is a burden of some sort.
    • A property sold unencumbered is essentially sold free of the type of liability to which the encumbrance might relate
    • If a property is mortgaged, then to loose any financial encumbrance the mortgage must be repaid
    • Similarly if vat is applicable, if there is vat on the property,or stamp duty particularly at a higher rate, or easements, covenants and anything that might diminish the value or saleability of a property.

    End Tenant

    • This is a tenant not directly connected to the landlord.
    • A superior tenant, subletting to a sub-let tenant (inferior tenant) if at the end of a chain of sublets is the end tenant.
    • The danger to the landlord arises when the link between the end tenant and the landlord becomes too tenuous.
    • Mortgage lender conditions may be breached, resulting in the creation of prohibited tenancies creating difficulty in repossessing in the event of arrears.
    • Insurers risks may increase when letting to certain tenant genres.  It is likely to be a material fact, that the landlord may have no control of a tenancy, if there is no direct relationship with the end tenant.
    • Sea also Let to let and head leasing and disclosure.

    Energy Ratings

    • See Energy Performance Certificates EPCs.
    • Properties are rated A through to G from most to least efficient respectively.
    • Started by the former Home information Pact H.I.P.s, EPCs are all that remain.
    • From 2018 EPCs with a rating lower than e will be un-lettable.

    Enforceable / Unenforceable

    • In this context contracts which can and cannot be enforced by law.
    • Some interesting examples include:
      • An AST eviction: even after the agreed term expires, it cannot be enforced within the first 6 months of the tenancy.
      • Alternatively, how about this one: An accelerated notice to quit S.21 is unenforceable if a landlord fails to license a licensable property to which the notice relates.
      • Similarly if the tenancy expires eviction cannot be enforced until expiration of the notice period.
      • AST NTQ should be sent at least two months prior to the end of the initial term of the tenancy to be enforceable.
      • After the expiry of the tenancy a different S.21 notice is required and the tenancy reverts to an AST periodic tenancy.  Again the minimum statutory notice is required to enforce.
      • The Limitation Act normally prevents the enforcement of a debt after 6 years.

    Enforcement

    • In the context of lettings this is the legal processes required to ensure a tenant complies with the terms of a tenancy agreement:
      • both during and after termination of the tenancy term.

    Enforcement Options

    • Depending on the debtors financial means: Landlords might access various means of enforcing eviction – with bailiffs; or, enforcing a debt (rent or bills) via distrait of goods following securing a County Court Judgement (CCJ), again with bailiffs if selling the tenants goods or guarantor’s possessions to recover the debt.  Note, distrait or distress, in this context, is the seizure of property in an attempt to secure payment of rent owed.
    • Where the tenant owns no goods but has third party or other means to pay, then a judge can grant a landlord with a  garnishee order, e.g.
      • attachment of earnings order – with the employer obliged to deduct regular payments from wages and to pay deductions to the court and thence to the landlord.
    • Where a tenant owns property, say a house (rare), then a charge can be placed at:
      • any third party land registry
        • so that when sold the landlord is paid before any remaining sale proceeds go to the owner of the property (the tenant of the landlord’s house).

    Enjoin or Joinder of action

    • Where a party suing another enjoins a third party to the action this is a joinder of action.
    • This could happen where a tenant sues a landlord for non paymnet of a deposit returned erroneously by the agent.  The agent is enjoined and must admit guilt and compensate or defend the action.
    • This is despite the agent no longer holding the deposit.
    • The agent was responsible for the return of the deposit to the correct party.
    • See stakeholder

    Environmental Health Officer

    • This is a local authority employee responsible for matters affecting your heath within the home including: dampness, excessive heat or cold and the like.  See HHSRS.

    EPCS

    • Energy Performance Certificate.
    • Renewable every 10 years.
    • Must be included in marketing material from 6 April 2012 or
    • In the absence of provision – face fines  fixed at £200 for every property affected and loss of landlord or agent reputation.
    • Loss of reputation means no longer being a fit and proper person.
    • If deemed unfit to manage a licensable property a licence will not be granted!
    • The whole EPC need not be displayed – only EPC ratings.
    • SAP = Standard Assessment Procedure – the method used to assess a property’s energy performance, I.e. the efficiency of heating, controls, insulation, ventilation, glazing, lighting etc.

    Equality Act 2010 – Section 15 – Defence to Eviction

    • Effective 1st October 2010
    • Should a landlord seek possession from a disabled tenant whether or not the tenancy agreement has been breached, extra due diligence is required.
    • Prior to The Equality Act there was no defence to possession following service of a valid s21 Notice to quit under the Housing Act 1988 – not necessarily so any more.
    • Under Section 15 a disabled person is discriminated against if treated unfavourably due to something arising in consequence of the disability and the person allegedly discriminating cannot demonstrate that they acted proportionately to achieve a legitimate aim.
    • A landlord’s right to end an AST using the statutory notice procedure if the occupant is disabled is compromised.
    • If a landlord knows of a tenant disability but neglects to ensure that the tenant grasps the effects of a s21 notice, then the landlord may be deemed to discriminate against the tenant, since the tenant may lack the capacity to comprehend.
    • Ironically, if landlords are unaware then it is not discriminatory, i.e. ignorance is bliss, but paradoxically not negligent.  The landlord must have subjective knowledge of the disability to be deemed to have discriminated. Where a landlord demonstrates he acted proportionately to the effects of the disability he has not discriminated.
    • London Lewisham BC v Malcolm, House of Lords is the main case upon which s15 was later based.
    • Schizophrenic tenant took in lodger contrary to rules resulting in eviction.

    Equity (2 meanings)

    • Equity 1st meaning
    • The amount of capital (value) remaining in a property after any mortgage loan is deducted.
    • Say you borrow £75k and
    • You provide £25k deposit.
    • 75% LTV = 75% of debt you owe to the lender and
    • 25% of the deposit is the amount you provide to buy a property.
    • In this instance the 25% is known as the equity or the amount remaining after any loan is deducted.
    • direct repayment mortgage means
      • the loan decreases inversely whilst the equity increases (amortization).
    •  An interest only mortgage in contrast is where
      • The loan remains the same for the term of the loan.
      • The equity could, but is unlikely to, remain the same.
      • The equity can vary with house price value fluctuations via
        • economic circumstances or
        • improvements made to a property via
          • renovations or
          • dilapidations experienced by the lack of  maintenance.
    • Equity 2nd meaningA branch of Common Law  Equity is about fairness.
      • Under the rules of equity a judge can award 3 remedies:
        • Think of the name S.I.D.:
        • Specific Performance by discretion
        • Injunction by discretion
        • Damages as a right
      • Where there is a conflict between common law rights and equity then equity always prevails.
    • Equity is a discretionary remedy, not an automatic right or entitlement.
    • Parties acting without integrity are unlikely to be permitted to rely on equity as a remedy.
    • I.e. “Equity must come with clean hands”

    Erasmus Student Network (ESN)

    • ESN ia a support and advisory orgaisation assisting thousands of international students to study full or part-time abroad. Origins within European ESN is now an international body.
    • Erasmus students in the UK will thus invariably emanate from non UK countries.

    Erasmus Students

    • Erasmus Students are essentially foreign exchange students.
    • They can be ideal to mop up places created by any drop-out students.

    ERP

    • Enterprise Resource Planning
    • This is the combining of separate aspects of  an operation to enable greater efficiency.
    • In a lettings contect this might include specific software for letting agents such as CFP lettings management software.
    • This allows agents to input data to enable reminders of certification expiry dates – this can save lives as well as agent reputations!

    Essential Services

    • Sas, electric, water and sewerage are all essential services
    • See utilities for other non essential albeit necessary services.

    Essential Services

    • Sas, electric, water and sewerage are all essential services
    • See utilities for other non essential albeit necessary services.

    Estate

    1. A housing estate or location.
    2. Part of a larger property – e.g. an estate surrounding a property.
    3. A legal term relating to the rights and responsibilities of a tenant
    • This last term is the most likely topic related to lettings.
    • It is also unlikely to be countenanced in most landlord’s lifetime.
    • What happens to a tenant’s possessions or their tenancy entitlements or responsibilities following a tenant’s death?  See succession.
    • See also Next of kin.

    Estate At Will

    Estoppel and Promissory Estoppel

    • This is an equitable legal means used by the judiciary to prevent injustices.
    • Say e.g. a landlord agrees to his tenant leaving prior to the expiration of the tenancy without the need to pay the remaining rent..
    • Under the strict rules of the tenancy agreement the landlord is entitled to claim the unpaid rent for the remaining tenure.
    • The landlord would be prevented from so enforcing the contract by estoppel.
    • An agreement requires at least three things to be valid: offer acceptance and consideration.
    • The offer and acceptance is straight forward, “I wish to leave early will you release me from the contract?” “Yes!”
    • The consideration is normally rent, but in this case it is “acting in reliance upon the landlord’s promise to allow the tenant to leave prematurely without paying rent otherwise due”:
      1.They tenant subsequently seeks alternative accommodation  and
      2. By giving up existing accommodation and paying rent elsewhere acts to his detriment.
    • The doctrine of promissory estoppel is applied thus:
    • The landlord will be estopped (prevented) from enforcing his claim for the rent to which the landlord might otherwise be entitled.
    • This doctrine of Promissory Estoppel is founded on three core elements (Why is it always three?):
      1. The landlord’s promise, representation and or assurance made to the tenants
      2. Reliance upon it by the tenants
      3. The tenants suffered loss or detriment as a consequence of the tenants reasonable reliance.
    • In these circumstances such agreements are often oral.
    • Evincing a claim need not necessary require documentary evidence.
      Parol Evidence permits spoken promises to be admissible evidence and in civil cases is based on the balance of probabilities: 51% i.e. more likely than not, unlike criminal evidence, “beyond reasonable doubt.”

    Eviction

    • The legal process required to end a tenancy usually where the tenant defaults in some way with regard to tenancy obligations.  A court order is required.
    • See protection from eviction.

    Excess

    • This is normally the amount an insurer will require a policyholder to pay in the unlikely event any claim – say the first £100.
    • In addition a second excess may be payable for high cost repairs. E.g. period properties where there is more risk of dry-rot wet-rot, subsidence, heave, landslip etc.  The latter categories can attract an excess of say £1000 and this is payable by the policy holder. Any amount in excess of the “excess” is paid by the insurance co. for any such damage resulting.

    Exchange of Contracts

    • The point at which a buyer and seller are legally bound to complete a property purchase or be subject to paying compensation.
    • A similar exchange between landlord and tenant is also binding.
    • Prior to this point all dealings as said to be ‘Subject to Contract‘ i.e any pre-contract dialogue is not yet binding.

    Exclusive Possession

    • Exclusive Possession is a principle established in the case of Street v Mountford
    • Exclusive Possession means that one or a number of joint occupiers have the exclusive use of at least some part of a property.
    • The landlord is excluded (inspections and viewing by permission of the tenant – not the landlord)
    • The landlord is paid rent.
    • A bark room is unlikely to qualify.
    • A room in a house with shared toilet and kitchen may qualify.
    • Such circumstances can determine the type of tenancy held by the tenants irrespective of the title of the tenancy.
    • If the property is called a license (with almost no rights) but has exclusive use of a significant part of a property, then it is not a licence but a lease (with significantly more rights).
    • The occupier is either the tenant or the license.

    Extension of Tenancy Term (duration)

    • Extension of an AST must be carefully worded to avoid creating a new AST enforceable by the tenant for a minimum of 6 months.
    • If a tenant wishes to remain after the end of an AST for say a couple of weeks to attend a graduation ceremony but decided to remain for say another 6 months, the tenant could legally do absent a properly drafted Extension to AST.
    • This requires careful reference to the original AST for say 12 months to be extended by 12 days say.
    • This gets messy if a s.21 notice to quit has already been provided.

    F

    Fair Rents

    • Fair rents are rents controlled by the Rent Act 1977.
    • Ironically the rents are below market rents, compared to HA’88 rent rules.
    • So whilst fair on tenants they are unfair on landlords.
    • Further such rents can only be reviewed biannually  (two yearly) following application and agreement by RAC
    • S.70 RA’77 rules apply to assessments related to supply and demand and scarcity within a locality.
    • The Rent Acts (Maximum Fair Rent) Order 1999 limits rent rises to 7.5% upon first registration; thereafter to 5% + inflation.
    • Invariably any rent increase favours tenants at the expense of landlords.

    Fees

    • From 1 November 2013 all letting agents are required by law to provide details of their fees to prospective tenants on all marketing material.  Not all fees are required but administration and exit fees are included.
    • Other charges by letting agents might include:
    • Administration Fees
    • Inventory Fees
    • Check-in fees
    • Check out fees
    • Late Payment Fees
    • Replacement key costs
    • Interest on late payment fees
    • Maintenance payment administration fees
    • Call out fees
    • Abortive call out fees (when the call is not justified).
    Other charges might include:
    •  If a tenant changes a utility supplier a £200 administration charge will be made to cover the administrative cost of reversing the change plus any monetary costs incurred. e.g.
      • Pay any interest at the rate of 4% above the Lending Rate for the time being of the landlord’s bankers upon any rent or other money due from the tenant under this agreement which is more than 3 days in arrears in respect of the period from when it became due to the date of payment
      • Pay all costs, charges and expenses (including legal costs and surveyors fees) incurred by the landlord incidental to any notice served or claim in respect of any breach of the tenant’s stipulations and conditions or any other provisions here contained.
      • Pay £5:00 for each tied up and closed bin-liner full of rubbish remaining at the property following tenant departure.
      • Pay £15:00 for each rubbish bag the landlord is obliged to fill at the property following the tenants’ departure.
      • Pay £12:00 for each regular payment made other than by standing order.  First payments can be made in any way without cost.
      • Pay £15 for each reminder of late payment, howsoever communicated.
        • These reminders will not exceed one every seven days from the due date of payment.
        • Late payments are disproportionally costly and are less than charged by lenders to Leydon lettings.
      • Pay £20 for each reminder for information where more than three requests have been issued over a three week period, but such information has not been received.
        • After three weeks each and every reminder will attract a fee of £20 with no more than one reminder per week chargeable.
        • Such information might include e.g.
          • applicant information form,
          • standing order forms,
          • guarantor agreement forms,
          • student I.D.,
          • passport,
          • driving license (where applicable).
        • We wish to provide all our tenants with the best service available.  Time spent repeatedly chasing documents detract from this service to the detriment of our overall service.
        • Pay £25 for each occasion a standing order or direct debit or other payment method not paid into the landlord’s bank account by the due date.
        • Pay £35 for each occasion where the landlord is asked or obliged to attend to collect or make payment.
          • This applies whether late or not e.g.,
          • where the tenant is otherwise unlikely to pay or
          • where the tenant requires cash, instead of cheque, for the return of any overpayment;
          • or requires a bank visit to enable an international bank transfer for which a further bank charge is likely payable.
        • Pay £40 for each occasion where the landlord is asked or obliged to visit a property to enable access, following the loss or misplacement of household keys.
          • Depending on the day and hour and whether a locksmith is involved this cost will reflect the actual cost rather than the lower fixed cost of £40.
        • Pay £30 for each occasion where the landlord is asked or obliged to contact a tenant who keeps a pet at the property.
        • Pay any bank charges resulting from the tenant’s insufficient bank account funds being available by the due date for payment or at the date the tenant has advised his bank to pay by standing order any payment to the landlord.  The landlord does not accept responsibility for the tenant’s bank charges in any event and to clarify the landlord does not operate any direct debits and therefore has no control over the alteration of amounts, or  amendment of dates, after the standing order has been set up.  Where a tenant wishes to vary or postpone payments he must arrange this himself with his bank in person.  Where a money transfer is made directly into the landlord’s bank account the tenant must quote the landlords reference which will at least include the tenant’s surname and house number.  The tenant must also inform the landlord in writing, preferably by email, on the same day or without delay, stating the name of the bank, account and sort code from which the amount was paid and into which of the landlords bank accounts the amount was credited.  The tenant is responsible for evincing any such payment by whatever payment means he has chosen to make including cash over a bank counter or telephone bank transfers where there is there is insufficient evidence to identify any payment.  The landlord does not yet accept any payment by bank card or credit cards.
        • The tenant agrees to cooperate with the landlord by making payments into any bank or banks the landlord nominates.  The tenant is responsible for any bank or currency costs incurred by the landlord when refunding any deposit or payment.
        • Pay any charges incurred by the landlord to recover unpaid rent and bills and repossession of the property.
        • Where the landlord, in order to gain legal possession, is obliged to engage the services of the legal profession, the tenant will pay all reasonable collection costs.
        • If, following non-payment of rent, Leydon Lettings is obliged to engage the services of a debt collection agency, the tenant will pay all related costs.

    Fico

    • Financial Intermediaries and Claims Office
    • See NRL tax

    Fiduciary Relationship

    • In lettings – this might describe the relationship between a letting agent and his landlord client.   The agent should never allow the landlord to suffer detrimentally due to putting the agents interest before the landlord.  The agent should surrogate himself in order to protect the interests of his landlord client where there is a conflict of interest.

    Fines

    • Under the Localism Act 2011 if landlords fail to register or protect tenants’ deposits they face a fine of up to three times the value of the deposits! And fail to provide the prescribed  information within 30 days of receipt of deposits and landlords can be sued up to six years later, yes even following a tenant’s departure.  Say an ex tenant finds themselves in future penury, perhaps unable to buy a new car?   “I know, what is my old landlord’s name from five years ago?  I’ll get them to pay!”  And  pay they will.  Pay day might take on a new meaning, deposit day.
    • Fail to market a property without attaching an EPC- another fine!  And, you  may no longer be a “fit and proper person” to licence a property.
    • Fail to update a gas safety certificate – fine or worse! Go to jail, do not  collect £200 instead pay many times more in compensation to your victims!
    • Fail to Licence a Licensable property – fine! And, denied use of  section 21 Accelerated Notice to Quit!
    • Fail to comply with Council Improvement Notice – fine or worse!
    • Fail to register for Data protection via ICO – fine!
    • Personally this is all just fine by me. As a landlord and letting agent, I  am tired of being tarred with the same brush as non-compliant landlords.
    • Localism Bill 2010 from 15 November 2011 became

    THE LOCALISM ACT:

    • A five  part Act, one of these parts – housing affects Deposits:
    • How will new rules affect landlords / agents?
    • Landlords accepting deposits will have tighter rules of compliance or face a  minimum fee of 1 times the value of the deposit or up to three times the value  for serious breaches. Starting to feel not so fine? There’s more!
    • In addition, landlords can be sued for up to 6 years after the tenancy ends  where landlords return deposits but, fail to provide the prescribed information  and register deposits within 30 days.
    • And that’s not all – the section 21 (Accelerated Notice to Quit) is not  available to non-compliant landlords, so no sympathy from the courts if your  tenants do not pay their rent!
    • This came into effect on 6 April 2012. Letting agents and landlords that do  not take deposits are unaffected.
    • Deposits taken prior to the protection scheme was introduced are not  regulated i.e. pre 6 April 2007 UNLESS you have renewed meantime.
    • No renewal means no need to register.
    • So a continuing periodic tenancy originating before 2007 is not required to  be registered until renewed
    • Localism Act re EPCs:
    • A remnant from Hips, EPC rules changed from 6 April 2012
    • For now it is important that landlords and agents provide an EPC with all marketing material or face fines and loss of reputation.
    • From 2018 under the Green Deal any property with a certificate rating below  ‘E’ will be banned from the lettings market. I.e. ‘F’ and ‘G’ will be  un-lettable without additional work to raise the rating. Leydon Lettings have no  properties rated as low as this so is unaffected

    Fire Doors

     

     

    Hi Paul – This is a big question so I will summarise my understanding.  Note, even where not required, the importance of the spirit of building regs as opposed to legal requirements requiring smoke and intumescent seals cannot be overstated as they do save lives. Intumescent seals are most commonly required in doors or door linings, but also in glazed transoms above doors, door viewing panels, where pipes run between rooms enabling the spread of fire and in flame retardant paint products.The seal when heated expands preventing flames and smoke filtering through from the areas affected by fire, to those areas designed to be protected, so as  to enable preservation of life on the other side of the door.  Initially prior to the spread of flames and burns, smoke seals provide some advanced protection from asphixiation caused by the spread of smoke and toxic fumes. Intumescent smoke seals ARE required in certain situations – but not just seals as you will see!: Some of these situations include:

    1. Large HMOs i.e.. Mandatory Licensed properties on all bedroom and common-habitable-room doors (excluding: cupboards, bathrooms and toilets and entrance and exit doors.
    2. In addition fire doors secured with a set of three fire hinges retained by fire door stops which are glued and screwed to the door liner, and finally fire rated door closers are also required to complete the required fire rating.
    3. Half hour rating is normally required but in exceptional situations 1 hour rated doors are required e.g. two separate properties with a connecting door would be required to provide one hour for occupants to escape the fire – thus one hour fire rating.
    4. Most houses do not require any of the above measures but it is our policy to fit them in any event – particularly following renovation as the additional cost is negligible.  It also future-proofs against subsequent further legislation requiring yet higher standards of protection.
    5. Where the door finish requires painting it is prudent to use intumescent paint as opposed to conventional wood-painted finishes.
    6. Non-licensed small HMOs may not require all doors to be fire-rated but some doors if exposed to additional risk might be required to be fire rated.  This would include a bedroom accessible via a kitchen, so that in the event a fire starts in the kitchen the adjacent occupant might not perish before escaping from an alternative exit such as a window..  The fire door would give the occupant additional time to escape via the window.  The window opening should allow a width of at least 450mm to enable the largest occupants to escape.  If the window hinges obstruct an escape or reduce the space to escape, then egress hinges should also be fitted to that room window or windows.

    Fire Risk Assessment

    • The following from http://www.firesafe.org.uk/houses-in-multiple-occupation/ will assist you and is the template Leydon Lettings use to assess any risk. The regulatory reform (fire safety) order, became effective from 1st of October 2006.  Cherwell Fire Safety 0800 998 7958 advertises as operating in Canterbury but do not appear to have an office south of London.  http://www.cherwellfiresafety.co.uk/index.php  
    • Also see Fire Security based in Aylsham 01304 842317   http://www.fire-sec.co.uk/services/
    • See also HHSRS considerations in our glossary.
    • Fire Precautions
    • The document Guide 3 – Sleeping accommodation should provide all the information you require to conduct a Fire Risk Assessment.
    • The Responsible Person (RP) for managing should:
    • Complete a fire risk assessment and consider the fire precautions in the common area and eliminate or reduce to the lowest possible level
    • Consider escape routes which may require the provision of a fire barrier between the common areas and the living accommodation to create a protected route to a place of ultimate safety.
    • Consider the need for a fire detection and warning system and should it be extended into the living accommodation.
    • Consider the need for emergency escape lighting.
    • Consider fire-fighting equipment and facilities.
    • Consider the need for signs and notices
    • Consider recording, planning, informing, instructing and training which will require producing a fire action plan.
    • Maintenance
    • Any fire precautions provided will need to be maintained and this will not cause problems in the common areas. However, if they have been extended to the living accommodation this may cause problems. This is because domestic dwellings are exempt from the order and the tenants cannot be forced to co-operate with the RP. Therefore it is important that the tenancy agreement has a section devoted to Fire Safety that lays down duties the tenant has to abide by. This should include permission for the RP and any persons appointed by him/her to enter the living accommodation to carry out maintenance of any fire safety equipment.
    • A Log book recoding incidents of fires or alarm soundings and testing should be kept in all Mandatory Licensed properties.
    • This said all properties should comply with HHSRS rules

    Fit And Proper Person

    • It is a requirement for managers of licensed properties to be a fit and proper person.
    • This is someone without convictions related to property misconduct.
    • It might also relate to e.g. crimes of theft and violence.
    • A person not considered to be a fit and proper person may not be permitted to manage a licensable property.

    Fixed Term

    • A Fixed Term tenancy describes a tenancy with pre-established start and end dates.
    • This in in contrast to a periodic tenancy which continues on a month by month basis following the end of the fixed term, without the requirement to renew the tenancy.
    • The initial fixed term of a tenancy can be as little as say six hours, but the landlord could not legally enforce any eviction if the tenant decided he wished to remain for say six months.
    • Meantime any pre-arranged subsequent tenants would be prevented from occupation – such extended tenancy could legally last 6 months.
    • There are ways to motivate tenants to stick to the original term agreed.  By providing in the contract that the rent increase 10 times the original rent should the tenant leave after the end of the fixed term agreed.
    • So although the landlord would be unable to evict the first tenants or accommodate the new tenants for at least six months, he could sue the overstaying tenants for the additional rent.
    • This additional rent might enable the landlord to accommodate the disappointed second group of tenants e.g. in a hotel – assuming the landlord is successful in suing the late leaving first group of tenants

    Footprint 1 (Carbon)

    • The amount of energy we consume directly or indirectly, creating greenhouse gases harmful to the environment.
    • Indirect – goods manufactured in countries other than the country of consumption – e.g. China exporting to the world creates an environmental problem for itself and the world for which the rest of the world’s consumers share responsibility.
    • Direct – in a UK letting context, this is the amount of energy we consume in our homes.  This can be reduced by fitting modern condensing boilers, cavity and loft insulation, etc.
    • Landlords unwilling to modernise should examine the energy and money savings from the Government’s  Green Deal
    • Tenants can insist on upgrading where Landlords refuse.
    • Third world manufacturing of white goods with cheap labour means it iis often more economical to replace than repair, further harming the planet.

    Footprint 2 (Credit Checking)

    • This term is related to credit checking and rating.
    • Each time a credit check is conducted, a “footprint” is left behind.
    • Too many footprints can make a borrower appear desperate causing their prospective or existing lenders to sound alarms.
    • Letting agents conducting credit checks on prospective tenants and their guarantors will each leave a footprint on their credit status e.g. Exprerian.
    • Investors and indeed anyone can pay credit-check companies e.g. Experian to see what foot-prints have been left on their credit status by others without their awareness.
    • Your permission is required by others to run a credit check failing which they are in breach of data protection rules set and policed by ICO.

    For Sale By Owner (FSBO)

    • A growing number of owners are selling properties without the help af an estate agent.

    Forced Sale Value

    • When a property must be sold to satisfy a debt, those responsible for selling must act with due diligence to ensure the owner is not deprived of an open market value.
    • E.g. The Court of protection – has a duty when selling a property to secure a fair and reasonable price.  I.e. not merely accept a forced sale value for convenience.

    Forfeiture

    • Most tenancy agreements will include a forfeiture clause stipulating what will result in the retention and non-return of a payment
    • There are pre tenancy situations which might also include such a clause such as when reserving a house.  In England and Wales it is normal to secure a house by payment of an administration fee.  Whilst the purpose of the fee is to cover administering the new tenancy the payment for this service creates a significant deterrent to later drop out.  Such commitment creates reasonable certainty the prospective tenant is serious and will reassure an agent to take the property off the market.  The cost to an agent and landlord of dropping out cannot be overstated as it is likely to exceed the value of the admin fee.  For this reason a tenant is likely to forfeit any admin fee.

    Forwarding Past Tenants Mail

    Four Unities

    Freeholder

    • Owner of a freehold as opposed to a leasehold.
    • A freeholder can grant a leasehold.

    Frequency or Duration

    • Prior to the 1996 Housing Act the minimum term a tenancy could be granted was for a minimum of 6 months.
    • Post the ’96 Act it can be for any period.
    • However, it cannot be enforced within 6 months.
    • Should the parties agree only 6 weeks at the outset and the tenant prior to departure announces they rather like the house and wish to remain they are entitled to do so.  The way round this is to ensure that should the tenant do so, the rent will increase ten times the initial rent.  This acts as an incentive to comply not just with statute but the contract.
    • Tenancies can be granted weekly, fortnightly monthly quarterly and annually but avoid any other periods.  Mandatory grounds for eviction make no provision for other than the above and so it could be messy albeit not illegal.
    • It is possible to have a tenancy for up to 3 years less a day.  3 year and more must be created by deed.
    • Never agree to a 4 weekly tenancy as this period is not provided for in the court mandatory grounds of section 8 notices.

    Full And Final Settlement

    • Full and Final Settlement is a phrase used to bring a dispute to and end.
    • An offer of Full and Final Settlement may be made ‘without prejudice’ i.e. a goodwill gesture or genuine compromise to avoid the greater cost of litigation, or loss of reputation, even if the offeror is convinced he would win in court – since there are no winners if justice is more expensive than the value in dispute.
    • Acceptance will normally bring the dispute to an end.
    • However, this phrase must not be used as leverage to apply undue influence when that which is offered is merely what the recipient is entitled.
    • Nor should a litigant take advantage of such knowledge when threatening litigation knowing his adversary will likely aquiesce to an extortionate demand, the defense of which will cost disproportionally more than the value of any claim.
    • A court or any regulatory body could dismiss such acceptance of payment under duress.
    • A desperate litigant may have no real choice but to accept such an offer, if desperate to meet financial commitments.
    • If, say, a tenant is entitled to receive the return of a deposit or refund of rent, then offering those entitled to such payment is merely fulfilling a legal obligation to return what is held “in trust”.  The rightful owner and recipient should not be obliged to accept what is owed in exchange for not claiming any other legal entitlement.
    • Such tactic is therefore a breach of trust.  Far from a goodwill gesture, this is a form of extortion to avoid dealing with a bigger issue or more serious complaint.
    • Draft ContractWithout Prejudice and Subject to Contract

    Funds

    • Money or money’s worth or assets.
    • Cleared funds are required prior to some purchases, e.g. property, or services such as accommodation, or conducting maintenance by an agent on behalf of a landlord.  In each case funds must be cleared and available at the bank prior to contracting.

    Fungal Growth

    • Mould invariably involves moisture.
    • Ventilation is therefore a good starting point to a cure.
    • Showering with very hot water encourages excessive steam and condensation and if left mould will make this their habitat.
    • See also Heave,  Subsidence, Landslip, Timber TreatmentMouldWet RotDry Rot.

    Furniture

    Furniture and Furnishing (Fire) (Safety) Regulations 1988 as amended 1989 &1993 is the act covering furniture.

    From January 1997, it became unlawful for landlords to supply upholstered furniture in rented properties which fails to conform to the 1988 standards
    Upholstered furniture manufactured before 1988 may contain foam capable of quickly giving off lethal toxic fumes. New standards require furniture fillings to include safer materials also covered by material with greater fire resistance.

    Covered by the regulations are:

    Upholstered seating, furniture, beds, mattresses, headboards, sofas and sofa-beds, futons, scatter cushions, seat pads, loose and stretch-covers.

    New Furniture purchased after 1988 must be labelled to indicate compliance. Since 1993 it became illegal to sell second-hand furniture which does not comply.  Pre-1950s furniture is exempt from this law.

    Further Advance

    • A  Further Advance refers to further borrowing on a mortgage subject to sufficient equity being available.  In inflationary times such advances are commonly used as deposits to enable further purchases.  See leverage and gearing.

    G

    Gas Safety

    • Landlords are legally obliged to ensure a gas safety registered engineer conducts a survey and certifies properties as safe; failure to do so is a criminal offence and could result in a tenant fatality and a landlord being imprisoned.
    • Certificates must be retained for two years and
      • displayed in HMOs as well as
      • holiday lets and
      • made available for tenant inspection prior to occupation.
    • In addition, though not a legal requirement, landlords can for a small additional cost, service the boiler and system.  What better way to evince due diligence?
    • From 2013 flues must be accessible and capable of inspection to minimise the risk of carbon monoxide poisoning e.g. from a concealed underfloor flue.
    • Any construction and boiler provision must comply with ACoP
    • Mains and battery backup powered carbon monoxide detectors save lives.
    • Boilers fitted in lofts are more difficult to access but as CO is lighter than air, any leak disperses into the atmosphere, not into the house.
    • Danger signs include:
      • orange and yellow flames
      • Soot e.g. around a gas fire or boiler
      • Sickness or flue-like symptoms.

    Gas Safety Register

    Gazumping

    • ‘Gazumping’ describes sellers who initially accept an offer from prospective purchasers.
    • In a rising price market a second purchaser offers a higher offer and the seller accepts.  The first buyer has been gazumped!  (Goes up).
    • The first buyer is invited to enter a price war or withdraw, thereby loosing any legal and survey fees paid prior to exchange – after this point the contract is legally binding.  Should gazumping occur a number of times the loss of such fees can prevent the first buyer purchasing any property at all, as their deposit was consumed by fees.  Some have been bankrupted by the process  This practice is banned in Scotland following such outcomes.
    • See analysis following Gazundering.

    Gazundering

    • This is the opposite of Gazumping (see above).
    • In a falling house-price market, a purchaser offers a second seller a lower offer for a similar property and the seller accepts.  The first seller must either accept a lower offer from the same buyer or hold out for a higher offer.  The seller has been gazundered!  (Goes under).  Unfortunately there are often other often emotional factors involved.  an unscrupulous buyer will deliberately attempt this practice even when the market is stable.  They rely on the cost and inconvenience to the seller including the consequential loss of any onward purchase, to effectively extort the seller into selling the property for less than it is worth to a buyer with integrity. This is the most despicable of such practices.
    • Analysis of gazumping and gazundering
    • The law of England and Wales (unlike Scotland) enables such practices.  Until ‘exchange of contracts’, either party can withdraw from the sale or purchase with losses incurred by both parties, however and paradoxically, the most committed party invariably loses most.
    • The time to complete a sale can take two or three months during which time markets can change.  Were the legal system reformed to enable faster sales such practices could be outlawed.

    Gearing

    Gentrification

    • Wealthy buyers able to pay more for a property than the indigenous population, can result in local people unable to buy in their home town, village, etc. e.g. areas of London and scenic Welsh holiday homes.  Local farm workers on relatively low incomes become unable to afford to live in the area causing resentment.

    Ghostification

    • This is one of the effects of studentification.
    • During the summer when most students leave for vacations entire estates are left bereft of both occupants and long term community residents.

    Goods and Possessions

    Grandlord/Granlord

    • A Grandlord or granlord describes the growing trend for those older than say 50 years, to invest in property, rather than in more conventional saving and pension plans.
    • A compound from two words: landlord and granddad.

    Green Deal

    • The Green Deal is a government scheme aimed at encouraging energy conservation.
    • In relation to letting property, this became a serious prospect with the introduction of Energy Performance Certificates, EPCs.
    • The idea is to enable inefficient energy systems to be improved.
    • Until recently, with the exception of perhaps double glazing, the challenge was in motivating investment towards modern efficient boilers, loft and cavity and solid-wall insulation, etc. with few willing to fork out due to disproportionally long payback periods.
    • Not any more!  Government grants enable e.g. landlords to borrow in a scheme linked to energy consumption.  This means that repayments will never exceed the actual cost of the energy that would have been consumed, prior to improvements being carried out.
    • Deterrents introduced from 2018 mean that a property with an EPC rated F or G cannot be let – it will become an offence to rent such a prohibited property.
    • This is a double motivation to save the planet by reducing our carbon footprint responsible for global warming and polar icecap melting.
    • A further motivation means tenants will be able to demand that landlords reasonably improve home energy efficiency, as this will save tenants money.  Landlords will be unable to refuse any reasonable requests to improve.
    • In short, it is a win-win situation for all concerned, allowing no excuse for lethargic landlords to put off energy conservation any longer.
    • Is it a good idea?  It is a no brainier!  For no upfront cost a new boiler can be installed and the loan repaid with the saving.  What’s not to like?
    • See also:

    Grounds for Eviction

    Guarantor or Parental Guarantor

    • Guarantors agree to be responsible for rent, bills and damage in the event the tenant fails to pay.  Most students have little history indicating creditworthiness and so this compromise protects the interests of landlords who would otherwise be reluctant to let to students.

    Guide Rent / Guide Price

    • The likely sale price or rent achievable.

    H

    Halls

    • Halls of residence as supplied by universities and educational establishments like language schools.
    • These institutions invariably enjoy exemption from Council Tax.
    • They also are outside the AST status and students have less legal rights compared to those resident via AST private landlords.

    Harassment

    • In a lettings context this describes a landlord who acts inappropriately, knowingly or innocently to the detriment of tenants or contrary to law.  Some landlords deliberately seek their unwanted tenants’ eviction, by making their tenant’s lives difficult.  Constructive illegal eviction.
    • See Protection from Eviction Act 1977.

    Head Leasing

    • This is a tenant not directly connected to the landlord.
    • superior tenantsubletting to a sub-sub let tenant (inferior tenant) at the end of a chain of sublets is the end tenant.
    • Sea also  Let to let and head leasing.
    • Some Universities rent properties from landlords that in turn let to student tenants – this is classic head leasing.  Similarly a Company Let where the company let from the landlord and then to their employees.  Care must be taken in this situation to avoid creating a tenancy with the member of the company as opposed to the company itself, as this could create a different tenancy than that intended with adverse legal ramifications including DPS

    Heat Detectors

    • Heat detectors are often used where smoke detectors would be a nuisance, such as in a kitchen.
    • Only when the ambient heat reaches a certain temperature will the alarm sound – or if another interconnected smoke alarm sounds, the interconnection will set off any heat detectors and smoke detectors connected to it.
    • See also smoke detectors and where they are required.

    Heave

    Help To Buy

    • A government scheme introduced in 2013 by the coalition government to boost an ailing economy by enabling prospective home-buyers who demonstrate they can afford the repayments, albeit not the full deposit, to buy a home.
    • LTVs of up to 95% for such buyers enabled by government funding and guaranteeing lenders their top-up, encouraging confidence for lenders to lend and has positively impacted the market.
    • Not expected to run indefinately.  A short term catalyst during the recession probably running until the next election only.
    • Not available to BTL landlords to rent property.
    • Restricted to residential sales thus excluding commercial sales.
    • Controversy exists over whether this will ironically artificially inflate house prices risking a double dip recession.

    HHSRS

    • Housing Health and Safety Rating System. HA 2004.
    • This requires landlords or letting agents to conduct a risk assessment on all properties in accordance with a 29 point checklist and
    • to take steps to minimise such risks.

    A. PHYSIOLOGICAL REQUIREMENTS: 

    Hydrothermal Conditions

    1 Damp and mould growth

    2 Excess cold

    3 Excess heat

    Pollutants (non-microbial):

    4 Asbestos (and MMF)

    5 Biocides

    6 Carbon Monoxide and fuel combustion products

    7 Lead

    8 Radiation

    9 Un-combusted fuel gas

    10 Volatile Organic Compounds

    HHSRS. Housing Health and Safety Rating System:

    Space, Security, Light and Noise:

    11 Crowding and space

    12 Entry by intruders

    13 Lighting

    14 Noise

    C PROTECTION AGAINST INFECTION:

    Hygiene, Sanitation and Water Supply:

    15 Domestic hygiene, Pests and Refuse

    16 Food safety

    17 Personal hygiene, Sanitation and Drainage – e.g. includes risk from Legionella – e.g. where water rests in pipes undisturbed for a time at certain warm temperatures bacteria accumulate so when arriving at a property after a possible period of non-occupancy flush toilets since inhaled vaporised droplets can be harmful – particularly to vulnerable people with lowered immune systems e.g. during or following illness..

    18 Water supply for Domestic Purposes – following a vacation or upon first arrival run taps for a short time before drinking to ensure fresh and free of Legionnaires’ disease.

    D PROTECTION AGAINST ACCIDENTS:

    Falls:

    19 Falls associated with baths etc.

    20 Falls on the level

    21 Falls associated with stairs and steps (ensure adequate handrails)

    22 Falls between level

    Electric Shocks, Fires, Burns and Scalds:

    23 Electrical hazards (fit trip switches)

    24 Fire (provide smoke and heat detectors, fire blanket etc.) fire certificates evince due diligence.

    25 Hot surfaces and materials

    Collisions, Cuts and Strains:

    26 Collision and entrapment

    27 Explosions

    28 Ergonomics (human factors affecting ability to function e.g. opening a fire door with no physical strength to push the door open if elderly).  Leydon Lettings has just agreed to alter a period property which is not dangerous per se but presents a risk to the tenant who suffers from dizzy spells.

    29 Structural collapse and failing element

    High Rent Tenancies

    • Tenancies with an annual rent exceeding £100,000
    • Such high rent tenancies are excluded from the protections afforded to ASTs.
    • High & Low Rent Tenancies are classed as a Common Law Tenancies.
    • Low rent tenancies have rents under £1000 pa in London and
    • Under £250 pa elsewhere in the UK.

    Holding Deposit

    • A deposit  or bond retained to secure a tenancy subject to credit checking and signing a tenancy agreemnt.
    • Failure of a prospective tenant to proceed to contract is likely to result in the loss of the holding deposit.
    • The property cannot be offered to another whilst the holding deposit is retained and the proceedure of checks and drafting contracts is underway.
    • In the event the tenant is sucessfully credit checked but still rejected by a landlord the tenant receives a full refund of the deposit.
    • In the event a credit check fails for something which the tenant ought reasonably to have known the tenant is likely to lose the holding deposit.
    • The holding deposit is normally deducted from the first rent or admin fee and therefore is not retained.

    Holding Over

    • When a fixed term ends and prior to a new term starting this is described as holding over.  Mainly for commercial tenants. Similar in principle to a periodic tenancy and can be used to enable a tenancy at will in the interim.  Fraught with problems for both landlord and tenant as it might be deemed that a new fixed term tenancy or a periodic tenancy has commenced contrary to the wishes of either landlord or tenant to the benefit of one and detriment of the other depending on their respective plans.

    Holiday Lets

    • Holiday Lets are governed by a unique letting agreement not  protected by the same rules as an AST – instead it is similar to CLT rules.
    • The temporal nature of such a letting agreement does not warrant the same protection as a property which is the only or permanent residence of the tenant.
    • There are potential pitfalls for unwary landlords letting a property for a short time erroneously using an AST agreement instead of a holiday letting agreement.
    • Remember, the minimum enforceable period of six months must expire prior to seeking court assistance to evict via an AST tenant – whatever shorter term might be agreed at the outset!   I.e. a landlord and tenant can agree a one month tenancy, however, if the tenant decides to remain for say six months, then the law will not allow the landlord to hold the tenant to his promise to leave after say four weeks – the landlord is stuck with the tenant.  Fair? No! Legal? Yes!
    • The point of stating this is reflected in the situation when the next tenant cannot move in because the previous tenant is still sitting there!  Beware of any potential inadvertent overlaps!  If there is a risk, use a holiday agreement CLT  not an AST.  Note that it must be a holiday let and not a means to circumvent AST rules – see  Street and Mountford.
    • The nature of a holiday let is more commercial than residential.
      • The occupants are customers as part of a business
      • The rubbish created is commercial and must be disposed of in accordance with separate rules (commercial waste is paid for separately not as part of residential waste).

    Homelessness

    • This is a massive topic beyond the scope of a glossary.
    • There are those who through no fault of their own become homeless.
    • Long term homeless find it most difficult either to secure accommodation or to comply with the responsibilities of a resident.
    • There are those who are considered voluntarily homeless by not paying the rent or behaving in a way likely to result in eviction.
    • Sleeping on friends couches with no where else to go is technically homeless.  LAs may say otherwise.
    • LAs will encourage tenants to remain in a property until the last possible moment before being considered homeless.  Even after an order for possession (eviction) is granted, LAs may insist the tenant await the Bailiffs to escort them out before considering them homeless.
    • Meanwhile the landlord must pay fees for each legal step, Summons, Bailiffs, usually loss of rent, legal advice, administration costs and court attendance.

    Homestamp

    • Originally Canterbury Accreditation Scheme now run by University of Kent UKC and renamed HomeStamp.
    • The aim is to promote high standards of student accommodation by working in harmony with representatives from Students, Landlords and Letting Agents.

    Household

    • This is not about the house, but the number and relationship of the occupants to each other.
    • A single occupant is always only one household.
    • If all occupants are related in some way even remotely they are likely classed as Class C3: one single household.
    • An unmarried couple (male of female) is likely a single household.
    • If just one person is unrelated to another within the same house e.g. a tenant then the category of housing is deemed to be two households.
    • A group of students was once deemed to be a single house hold – not any more, unless they are also related in some other way e.g. triplets, cousins, uncle, aunt, step parent, half sibling, etc.

    Housemates

    • House mates can be a group of friends sharing a house.
    • It is also loosely, any group of house sharers with nothing more in common than the fact they are all tenants in the same house.
    • Individual tenancies attract numerous potential problems.

    Houses in Multiple Occupation (HMO)

    Two types –

    • large and small:
    • A small HMO is sometimes Licensable (see licensing):
      • or more tenants
      • forming two or more households,
      • living on any number of storeys,
    • A Large HMO is always Licensable:
      • or more tenants
      • forming two or more households,
      • Living on three or more storeys.

    Housing Act 1988

    • Step towards deregulation to free up over regulated housing market created by the Protection from Eviction Act 1977 subsequently mitigated by the HA 1988
    • Assured Short Hold Tenancies – ASTs (less security)
    • s.20 Notices HA 1988 Notices
    • s.21 HA 1988 Notices;
    • Fixed  s.21 or periodic term options
    • Market rent
    • Recover and enforce only after 6 months
      • Exception
      • Ground 2 HA’88 mortgagee default s.101 LPA 25
    • Exceptions: [R.A.S.H.100k) – acronym]
      • Resident Landlords
      • Agricultural Land tenancies
      • Student Letting (only if in Halls of Residence)
      • Holiday Lettings
      • < £1000 p/a London or elsewhere £250 p/a,
      • >£25k p/a now >£100k p/a
    • Grounds for eviction:
    • 1-8 Mandatory;
      • 1  Owner principle former home returning
      • 2  HA’88 mortgagee default s.101 LPA 25
      • 3 Fixed term < 8 months AND former holiday let
      • 4 Term < 12 months etc.
      • 5 Minister of religion e.g. manse required.
      • 6 Renovation works render uninhabitable
      • 7 Former tenant of Deceased
      • 8 Rent Arrears according to rent frequency
    • 9-17 Discretionary:
      • 9 Suitable alternative accommodation available
      • 10 Some unpaid rent on date of service
      • 11 Persistent late rent
      • 12 Unperformed obligation or default tenancy
      • 13House deterioration
      • 14 Nuisance annoyance / immoral illegal conduct
      • 14Aa Tenant departure unlikely to return
      • 15 Furniture deterioration
      • 16 Employed tenant no longer employed
      • 17 Misleading statement inducing tenancy (HA 1996)

    Housing Act 2004

    • The most important points
    • This act preceded by some years, the date of implementation.
    • Deposit protection from 2007
    • s.54 Mandatory Licensing from 2007
    • s.55 Additional Licensing
    • s80 Selective Licensing

    Housing Benifits

    • A Means tested benefit to assist those unable to afford all or part of their rent.
    • Many Letting bodies specialise in renting to this category, known as Social Housing:  Councils and Housing Association.
    • Others refuse to accept such tenants due to the high proportion of associated problems.
    • This subject is a self contained topic with ever changing rules.
    • Change in material circumstances must be reported to The Benefits Agency.
    • Couples separating when in receipt of HB must declare such material change in circumstances.
    • Death of a HB recipient spout likewise.
    • Prison
      • A tenant who is sentenced to a term of imprisoned for longer than 13 weeks is not entitled to HB during the sentence – i.e. he is unlikely to have a home to return to when released from prison often precipitating homelessness.
      • Even if it is merely likely the prison sentence will exceed 13 weeks (one quarter) no HB is payable.
      • However if the prisoner is on remand HB is payable for up to 52 weeks.
      • A family in receipt of HB whose spout or child is imprisoned can affect entitlement or amount of HB
      • Even if otherwise entitled to HB if you do not intend to return home upon release you will not be entitled.
      • If the landlord will rent to others during your sentence you will not be entitled to HB whilst you are in prison.
      • Ironically there are situations where dual payments are allowed: e.g. when moving home up to 4 weeks dual payment may be allowed to secure the new property whilst still obligated to pay current rent.  Alternatively a disabled tenant requiring adaptations may be allowed up to 4 weeks for this whilst remaining in previous home.
      • Battered or abused tenant spouses or anyone fearing violence from family or from say neighbours may, be allowed up to 52 weeks housing benefit on the main home – only if they intend to return to their old home similar to prisoners on remand, who leave their home for temporary accommodation.
      • Large families may be entitled to more than one home with dual benefits.
      • For specific relevant matters consult the Benefits Agency.

    HSE

    • Health and Safety Executive
    • This body is responsible for investigating health and safety aspects particularly those potentially dangerous or injurious to residents and visitors and includes trades-people.
    • Landlords have a duty of care to provide adequate scaffold for their maintenance people when say,pointing a chimney.
    • In the event of a fall, the landlord is very likely to be responsible unless he can demonstrate that he exercised due diligence.

    I

    Iceberg Houses – The Only Way Is Down!

    • So called because, like the proverbial tip of the iceberg, often most of the property is below the surface – unseen.
    • Ironically this can cause unseen undermining of adjacent properties relying on their neighbouring structures for support.  The Party Wall Act may be powerless to prevent problems.
    • Particularly popular in posh areas where land is expensive or simply not available.
    • Planning prohibition can prevent upward extensions but may be unable to deny excavation below ground.
    • This can involve several storeys down and with the use of modern Sun Pipes even caters for natural sun light, albeit without a view unless you have a powerful astronomical telescope or perhaps more appropriately a periscope!
    • Ideal for car parking, swimming pools, cinemas, gymnasiums, dark rooms, storage – basically anywhere light deprivation is either important or unimportant, as the case may be, due to the non requirement for a view from a window.

    ICO Information Commissioner’s Office

    Identification

    • Upon registration at university or college, students receive an Identity card (ID).  This normally provides a student’s number and their examination number and a photo stating their university.  This is unique to each student and acts as a reasonable means of verifying that students are who they say they are.  Leydon Lettings as part of due diligence require each student to provide a copy of this document prior to contract signing.

    Identify Theft

    • A little known fact for landlords is that they are more likely than most to have their identities stolen.
    • This is particularly so, when mail addressed to the landlord, continues to be sent to his rented property in his absence.
    • The tenant has at least six months to obtain all the landlords details and to pass himself off as the owner ironically utilising utility bills to evince his address.
    • The first inkling a victim-landlord perceives occurs when the tenant accumulates arrears and has quietly left without trace.  Only later will the landlord learn that his house has been sold and his credit cards fraudulently “maxed out”.
    • Past tenants are also likely to be targeted, especially if they do not instruct the post-office to forward their letters to any new address. We had at least one such dishonest tenant see Abandonment of tenancy.

    Immigration Act The 2014

    • Effective autumn 2014 – date to be confirmed and phased in limited locations until established.
    • This is a border control issue.
    • Universities and Social Housing providers are exempt; landlords are not!
    • Fines of up to £3000 for non compliance.
    • Landlords must establish a tenants right to reside.
    • More to follow when rules become clear.

    IMO (Interim Management Order)

    IMO Interim Management Order.

    Statutory local authority provision to compel a landlord to comply with housing standards, safety and regulations.

    See also: EDMO, IMO, FMO, Small, HMO, Large HMO, Sui Generis.

    Improvement Notice

    • Where a property requires remedial work to bring it up to an acceptable standard the local authorities can serve an improvement notice upon the managing agent or landlord.
    • Failure to act upon such a notice is a criminal offence.

    In Loco Parentis

    Income Tax Allowable Expenses

    • Such expenses must be wholly and exclusively for business use.
    • Revenue and Capital allowances are treated separately:
    • Capital Expenses:
      • Based on bricks and mortar these allowances are claimed only upon property sale or transfer i.e. delayed
      • Some apparently capital allowances are treated as revenue allowances under “the nearest modern equivalent rule”.  i
      • Improvements are normally treated as capital allowances
      • However, double glazing, originally treated as an improvement is now treated as revenue.
      • Alterations are not normally revenue but capital.
    • Revenue expenses 
      • Almost anything part of an existing property that already exists can be replaced with an equivalent substitute and be treated for tax purposes, not as capital, but as revenue:
        • kitchens, bathrooms, doors, painting, roof repairs or replacement are all revenue items.
        • The basic rule is, “if it already exists then it is probably allowable” as revenue expenditure.
      • Rental (revenue) income can be offset immediately by  allowable deductions reducing tax payable:
      • Accountants fees
      • Advertising
      • Certification Service and Servicing
        • Electric
        • Gas
        • EPC
        • Fire
      • Cleaning
      • Council Tax – where payable
      • Fees:
        • leaseholders
        • Legal
        • Letting agent
        • Maintenance
        • Professional
      • Gardening
      • Ground rents
      • Guarantor Vetting / Credit checks
      • Insurance:
        • Protecting rent losses.
        • Claim fees.
        • Buildings
        • Contents.
      • Interest :
        • Mortgage loan interest BUT NOT capital repayments
        • Loan Interest with exclusions related to improvements.
      • Inventories
      • Maintenance
      • Marketing advertising costs
        • Client and tenant
        • Rental property
      • Rent collection / enforcement
      • Repairs and Maintenance:
        • Broken furniture
        • Cookers, hobs, hoods
        • Dampproofing
        • Electrics
        • Gutters
        • Lead flashing
        • Plumbing
        • Repainting
        • Roof tiles /slates
        • Sand Blasting /stone-clean
        • Wet and Dry Rot
      • Revenue travelling costs between properties solely for the purposes of the rental business are an allowable expense in computing rental business profits
      • Transport and carriage – fuel, tax, insurance, MOT adding back any private-use proportions.
      • Warranties on e.g. white goods
      • Water-rates and utilities is provided as part of a bills package.
      • Window and Door Replacement (equivalent)

    Independent Taxation

    • Spouses are taxed separately after receiving separate allowances according to their individual circumstances.
    • Lenders may double the facility offered to an individual landlord by including a spouse investor.
    • With independent taxation, the other side of this coin is that when a couple let a property via an agent, which both spouses jointly own, they must provide evidence of exemptions or have income tax deducted at source proportional to ownership on the deeds for any spouse not providing exemption.
    • Another anomaly occurs when spouses separately own properties and ask a solicitor to convert them from individual, to joint, ownership.  Whilst this is likely to reduce income tax beware.  The Worthing Tax office is likely to look at CGT implications.  My wife and I discovered this unexpectedly.
      • Ironically, this can give rise to a capital gain for one or both spouses, even though no sale actually occurs.  This is because they have transferred assets, albeit between themselves, and it is this transfer which can create a liability, particularly when the value of the transfer exceeds the CGT threshold (£10,900 in 2013).
      • The amount of CGT payable depends upon whether you are a basic, or higher rate, income tax payer AND the amount of the gain.
      • If your revenue income in 2013 exceeds £32,010 you are a higher rate taxpayer.
      • The CGT rates payable are: 18% or 28% for basic and higher rate taxpayers respectively.
      • Any gift or transfer, as well as sale of non-exempt assets are subject to CGT.
      • Upon death no CGT is payable – instead you pay IHT.
        • The IHT threshold  in 2013 remained at £325,000.

    Individual, Individual Tenancy

    • Problems arise when a prospective tenant seeks accommodation but cannot afford their ideal, to rent a one bedroom flat.
    • The next best arrangement is to share a house with a group of like minded friends and form a joint tenancy all sharing the costs of rent and bills equally. Student tenants fit this classic scenario.
    • Some tenants are less fortunate and do not have a readily available nucleus of friends who are also seeking to house-share. The older the house mate the less likely their peer group will be seeking accommodation. This is when problems manifest – problems of compatibility in particular.
    • Most Landlords and agents, given the choice, would opt for a group of joint sharers. They all share a joint tenancy.
    • This is in contrast to a group of unrelated individuals who all share a house with separate tenancy agreements, each starting and finishing on different dates. Each tenant pays their rents in accordance with the perceived value of their room and shared amenities.
    • In the UK, this has numerous ramifications involving complex Council Tax calculations and determinations. In addition, legal implications affect tenants who have not exactly chosen to live together, what happens if they fall out with each other?
    • The problem is exacerbated when some tenants, who would otherwise be exempt from Council Tax, find themselves having to pay anyway. Students and benefit recipients have to pay Council Tax simply because of the type of tenancy they hold. In this situation the landlord is likely to become responsible for paying the Council Tax, even when all the occupants would otherwise be exempt. Were the tenants instead part of a joint tenancy agreement, they might be better off. The landlord is consequently obliged to reflect this additional cost of Council Tax in the rent. This means that any exemption is effectively lost. Yes it is so messy and it gets yet messier! Once there is a separation of tenancy dates and rents, residents become individual tenants attracting a raft of specific rules apply. The landlord is similarly affected.
    • Other considerations include damage to property. E.g. who is responsible for the hole which mysteriously appears in a door? With individual tenancies and the absence of joint responsibility, timid tenants might not wish to name the culprit, simply stating, “Honest it wasn’t me!” This is not the sort of house-share that most tenants would choose. Without collective responsibility, enforcement is almost impossible. Eviction of bad tenants on an individual basis can take several months, hampered by the absence of cooperation and witness statements.
    • Costs are yet another consideration. E.g. in the UK, each tenant in this scenario must have a separate TV license for their own TV, if it is located in their own room. This is in contrast to joint tenants who need only one TV license for all televisions located anywhere within the property.
    • Planning permission is a further consideration. This may be required for such tenancies where there are more than three unrelated occupants sharing an HMO (house in multiple occupation). If granted, it is time consuming and attracts an application fee.  Any acceptance will include restrictions.
    • Simple maintenance matters must be communicated, but who will be responsible for reporting urgencies to and from the landlord or letting agent? Within a disparate group of transients some may not convey a landlords’ response to immediately attend to say, an emergency electrical fault.
    • Such tenancies seldom see the entire house empty. However, despite this, incidences of theft are higher than joint tenancies.  This is not caused, as one might expect, from break-ins, but from inter-tenant theft of possessions – especially food. Tenants who have not chosen each other are less benevolent to one another.  When a property is empty, this is normally the ideal time to decorate and renovate. Perpetual occupation makes decoration more difficult to plan, resulting in greater inconvenience to all. Working with tenants in situation also adds to any costs for labour, due to working around an existing group.   This is in contrast to groups of students normally absent during summer vacations allowing the house to be decorated in the tenant’s absence.

    Inferior Tenant

    Inheritance Tax

    • Tax – payable on the value of an estate including property after deducting any exemptions.

    Inner Room

    • An inner room is  located within another room.  This may be an upstairs room accessible via an outer room.
    • For safety such rooms should be risk assessed for emergency exit.
    • A dining room converted to a bedroom accessible only via the kitchen is an inner room carrying additional risk.
    • Should a fire emanate from a kitchen then the occupant in the adjacent inner room may not be able to escape via the kitchen.
    • For this reason alternative escapes include a door to the outside from within the room (say the former dining room).
      • Alternatively through a suitable ground floor window fitted with egress hinges and with an opening in excess of 450mm wide.
    • In addition due to the risk, such inner rooms should be fitted with a smoke detector and accessed via a fire door.

    Inspection (Property Inspection)

    • Most properties are inspected quarterly to determine the property is in a safe and acceptable condition.  After tenants arrive this inspection is compared with any previous checks and any repairs noted and attended to.  Notice must be provided in advance of inspections. Final inspections at tenancy end are compared with pre-tenancy arrival to establish the extent of any dilapidations during the tenancy.

    Insulation

    • Lack of insulation can result in consequences:
    • Tenants under the Green Deal can demand adequate insulation if such request will reasonably reduce their heating costs.
    • Inadequate insulation is likely to result in mould as condensate settles on cold surfaces.

    Insurances For Lettings

    • Tenants must consider insurance for personal possessions.
    • Landlord insurance  is not the same as normal domestic insurance, due to the business and third party risks.
      • The insurance company needs to know their exposure to any risks and any vitiating factors.
    • Buildings insurance, covers the normal bricks and mortar and fixtures and fittings.
    • A specialised landlord policy may cover a combination of such risks.
    • Public Indemnity Insurance PI is for Agents or those offering advice in a professional capacity in consideration for a service.
    • Rent Guarantee is a form of insurance requiring pre-payment of a premium to enable recovery of rent.  In the event of tenant default the insurance company pay the landlord the rent subject to conditions: landlord deposits utilised prior to payout etc..
    • Legal Protection is a form of insurance requiring pre-payment of a premium to enable recovery of legal costs in the event of say being sued.
    • Client Money Protection CMP is an insurance to protect landlords against agent impropriety, provided the agent is a member of the scheme.
    • Deposit Protection can be retained in custody schemes or in insurance backed schemes to ensure tenants are able to recover their deposits in the event of impropriety or fraud.
    • HMRC investigation insurance.  Membership of say the NLA comes with cover in the event of such investigations.  These are becoming more likely without fault, but the cost of evincing compliance is onerous and thus insurable.

    Intentional Homelessness

    • Acts or omissions in a tenancy resulting in eviction or unnecessary premature departure can be deemed by the benefits system as voluntary homelessness.
    • This can result in tenants being advised to remain until the landlord has gone to the time and expense of securing a court order thereby delaying eviction to provide respite for the overstretched Local Housing Allowance budget (LHA) meantime.
    • This adversarial approach often creates animosity which might not otherwise exist between a landlord and tenant.

    Interest

    • The amount payable in exchange for a lender granting a loan – the amount is calculated in relationship to predetermined interest rates related to Bank of England base rates or LIBOR rates.
    • Other factors are risk related, according to the borrowers credit rating.
    • See also LIBOR.

    Interest For Life – A Life Interest Or Life Estate

    • The benefit and enjoyment of the use of an asset for the duration of a person’s life – after death the property goes to the beneficiary determined by the bequest.
    • This might be used by a couple whose intention is is to bequeath their residential home to a trust or other cause but wish to continue in occupation until the death of the owners.

    Interest Only Mortgage

    • This is typically a BTL mortgage (although BTL can include capital repayment too).
    • The borrower pays interest throughout the term of the loan – traditionally 25 years.
    • A retired person taking out a loan would unlikely be granted 25 years to pay unless his life expectancy is likely to outlive the loan.
    • This is in contrast to a direct repayment mortgage where the borrower pays both interest and capital.
    • A slow start mortgage is a compromise between the above two mortgage products.
    • One in 8 borrowers claim not to know that they have an interest- only mortgage.  Either they lack understanding or mis-selling is widespread.  Retired home owners throughout the UK are being refused extended mortgages due to their age and limited longevity to repay.  This is not so common with BTL mortgages but the same phenomenon can face investors too.  For more see articles on this topic.

    Interim Management Orders

    • Interim Management Orders are imposed on landlords or letting agents by a local authority where it decides to take over the management of a property for an initial period until such times as the property is properly managed or is sufficiently safe for the present tenants to reside.
    • Any costs incurred in the management of making the property compliant will be deducted from any rent with any shortfall being charged to the landlord.
    • See also Restraint Notice

    Intestate

    • When a person dies their estate is disposed of in accordance with their will.
    • In the absence of a valid will, signed by two independent witnesses, the rules of intestacy apply to the distribution of the decease’s rights and responsibilities.
    • The relatives of a tenant who dies intestate in England or Wales E/W are normally prioritised first in the hierarchy of those entitled to inherit any rights or responsibilities of the deceased.
    • A deceased person’s spouse is normally the first priority then their children, then any living parents, siblings, uncles, aunts, nephews, nieces etc and ultimately cousins and so on.
    • However, in E/W, most young unmarried student tenants are unlikely to have countenanced a will.  Should they die intestate invariably their parents are prioritised first, by statute.
    • In Scotland the parents would receive 50% with any siblings together sharing the remainder of any entitlement.
    • Other jurisdictions would vary in a similar way.

    Inventory

    • A written and or
    • photographic record of
    • the condition of a property
      • prior to arrival of a tenancy and or
      • during and upon departure at the end of a tenancy and
      • scheduling any dilapidations
    • It is important to take care to ensure that any mid term alterations are documented and if necessary signed by the parties to avoid a conflict at the end of a tenancy.  If the condition is only recorded at the outset, then any alterations made mid-term will not be included in the schedule.  E.g. a new lounge-suite provided towards the end of the tenancy could disappear with the departing tenants.  The tenants cannot be charged as evidentially the suite is not listed on the inventory!

    Inventory Abbreviations

    • Inventory clerks quickly summarise much information in a limited written space.
    • To assist them to do this efficiently they use lettings jargon.
    • Some commonly used check-in /check-out inventory-clerk terms:
      • ABD – As before described
      • AC – Average condition
      • AD – Antique defect, e.g. crazing
      • Adj – Adjacent to
      • AN – As new
      • CCU – Condition Consistent with Use
      • CU – Consumer Unit i.e. electric fuses
      • CH – Central heating
      • CP – Car park (private, public Adj, space)
      • CWA/CWU – Consistent with age/use
      • DG – Double glazing
      • DC – Domestically clean
      • DW – Dish-washer
      • Excl – Excluding
      • FF – First Floor
      • F/F – Fully furnished
      • FC – Fair condition
      • GC – Good condition
      • GF – Ground Floor
      • IAC – In Average Condition
      • IPC – In Poor Condition
      • IU – In use
      • IWO – In Working Order
      • IGO – In Good Order
      • LHS – Left hand side
      • LSM/s – Light surface mark  / scratch
      • MCA/ MCU – Marks consistent with age/usage
      • ND – Newly decorated
      • NFC – Not fully cleaned
      • NFV – Not fully visible
      • NH/FH – Not hung e.g. mirror, clock, picture
      • NFHN – Not fully hung, e.g. curtains
      • NI – Not inspected
      • NIU – Not in use,
      • NS – Not seen
      • NT – Not tested
      • NWO – Not in working order
      • NW – Not working
      • O/l – Overlooks
      • OSP – Off street parking
      • OV – Overview, e.g. from e.g. upper window
      • PC – Poor condition
      • Pkg – Parking
      • RC/RFC – Requires cleaning/further cleaning
      • RD – Recently decorated
      • RHS  – Right hand side
      • RMR  – Regular Maintenance Required
      • RSJ – Rolled Steel Joist
      • SF – Second Floor
      • Shw – Shower
      • SS – Slightly soiled
      • T & G  – Tongue and groove i.e. match boarding
      • VGC – Very good condition
      • VPC – Very poor condition
      • WD – Washer-dryer
      • WC – Water Closet, i.e. toilet
      • WFR – Where fittings have been removed
      • WIU – Well in use
      • WM – washing machine
      • WO – Working order.

    Investment Property

    Invitation To Treat

    • This is a term distinguishing the essential elements of a contract.
    • To be valid, a contract must have three main ingredients:
    • Offer
    • Acceptance and
    • Consideration (money or value).
    • A shop window displaying a property to let, is not, as it might appear, an ‘offer’.  This is merely an ‘invitation to treat’.  i.e. passers-by are being invited to come into a letting agents office to show an interest in any number of properties, perhaps view some, and ultimately to offer to rent a specific property.
    • Even after accepting an offer to rent this is merely an agreement which is not yet legally binding – not until consideration (payment) is also part of the agreement (absent vitiating factors) is there a legally binding contract.  Vitiating factors might include something which induced the deal e.g. by misrepresentation.  E.g. “You told me you were 18, but I subsequently I learned that you are only 14, therefore, you do not have the legal capacity of an adult to enter into such an agreement.  This said, agreements of necessity, made by say a 16 year old can be legally binding as housing is necessity, unlike say buying a car, which is not likely to be.

    J

    Johnson V Old

    Joinder of action

    • Where a party suing another enjoins a third party to the action, this describes a joinder of action.
    • This could happen where a tenant sues a landlord for non payment of a deposit which was returned erroneously by the agent to the landlord and not the tenant.  The agent is enjoined and must admit guilt and compensate or defend the action -despite the agent no longer holding the deposit.
    • The agent might later recover the loss vicariously by claiming against the landlord.  This is a messy resolution.
    • The agent holding is responsible for the return of the deposit to the correct party.
    • If the agent held as stakeholder he could refuse to return the deposit to either party until the landlord and tenant agree or failing this a court settles the matter.
    • See stakeholder

    Joint and Several Liability

    • Each tenant is individually and jointly responsible for contractual  liabilities arising during the tenancy.
    • E.g. a TV is smashed and no one owns up.
      • The landlord is at liberty to charge each tenant an equal portion, or
      • Any tenant the whole portion or
      • In disproportions
        • To secure the “reasonable” replacement cost.

    Joint Tenancy

    • Any number of people can share a joint tenancy but only the first four named own it as such.
    • The fifth, sixth, etc. tenants are considered to have an equitable (fair) interest in the tenancy.
    • Most members of a joint tenancy never even realise the first four are categorised separately.
    • Only when a problem arises does the distinction become important to enforce tenancy rules.
    • In this simple scenario a husband and wife bore 2.4 children with no children to any previous marriage and with little investments.
    • They would likely buy a property as Joint tenants.
    • On the death of the first, the survivor automatically inherits the whole investment irrespective of their wills.
    • Their wills might mirror each other (mirror will) or they might be wildly different from each other.  No matter, as far as the joint tenancy goes the last survivor gets the lot irrespective of their initial joint contributions.
    • Any assets outside the joint tenancy are treated in accordance with their individual wills.
    • The last to survive can bequeath both the property and separate assets (chattels) to whomsoever they wish.
    • The winner (survivor of a joint tenancy) takes all!  All the value of the property  but not necessarily the chattels inside the house, which may be treated in accordance with any will.
    • There are conditions attached to a joint tenancy called:
      • ‘The Four Unities':
      • Unity of:
        1. Possession,
        2. Interest,
        3. Time and
        4. Term.
    • What I call the PITTs. PITT.
    • Unless each of these concepts is identical it is not a joint tenancy but a tenancy in common.
    • Equal possession of the property (no segregations),
    • Equal interests (not 50% but all own 100%),
    • All tenancies commence at the same point in time and finally
    • All tenancies are for the same term or duration.
    • Any distinction – it is not a joint tenancy rather it would be a tenancy in common.
    • Understanding “The PITTs” enables a better understanding of a rental joint tenancy.
    • The only room with an en suite cannot cost more than a room without. Fair ? No way! So how do you distinguish? You don’t! Never!
    • However, to overcome the inequity you simply:
      • add the sum of the parts and
      • agree the total of the sum is payable by all as joint tenants
      • then divide the total of the sum (i.e. the total rent) equally between the number of tenants.
    • Simple?  Not really!  But it is fairer.
    • Imagine a group of six joint student tenants and
    • six sets of parental guarantors?
    • Aha the plot thickens!
    • The guarantors can, if you agree, limit the guarantee to only their child’s portion of responsibility… how?  do tell!
    • by applying the same calculation for the same reason!
    • Each Guarantor pays only one sixth, representing their child’s risk.  “Oh right! – I still don’t really get it?”
    • The phrase Joint and Several Liability now slots nicely into the portion of the brain now called, ‘no brainer’.
    • Unfortunately even this phrase is no longer technically correct.
    • “Oh!”  Under the Crystal Clear rules this is not everyday parlance and must thus be spelled out as to the implications for the tenants!  E.g.
      • “Everyone owes everything and anyone can be called upon to pay everything in the event the others do not.”
    • You think this is complicated?
    • Remember, in a joint tenancy all things must be equal.
    • Not necessarily so in a TiC.
    • Returning to the tenancy in common all things might still be equal but it can still be called a tenancy in common!
    • Why?
    • Just because this was elected at the outset.
      • For tax propitiousness
      • For division of shares to beneficiaries.
    • So why can’t I elect a Joint tenancy if i wish?
    • You con – but only if the 4 unities are present otherwise it is not what you call it but what it is
    • It is a Tenancy in common by default if any of the 4 unities are absent!
    • Simple?  I thought not.
    • Ironically you can call a joint tenancy by its namesake, but it might still be a TiC.
    • “Explain it another way so I understand?”
    • If any of the four unities are absent is is not a joint tenancy.
    • In default it is a TiC.  “OK I’ve got it” – phew!
    • Unless you revisit the definition then a year from now you will unlikely remember the distinction between TiCs and JTs.  Think of it as a name: J.T. Pitt had no TiCs (burrowing worms) – this acronym will serve you well if you are a law student studying landlord and Tenant Law – Good Luck!
    • Back to TiCs –
      Tenancy in Common example in practice
    • A couple with joint investments e.g. in property, might place their jointly owned investments in a Tenancy-in-Common agreement.
    • Complicated?  You bet it is – at least today!
    • But tomorrow when one dies it is simpler.  Ooer!
    • This enables their assets to be disposed of in accordance with their individual wills and this in turn will doubtless save a small fortune in tax liabilities.  The survivor if a beneficiary of a will may derive a greater inheritance.

      Changing the subject slightly from owner to renter:

    • Note – to end a rental joint AST tenancy on the due date you must issue a notice to quit at least two months prior to expiration of the tenancy.
    • You must also issue each named joint tenant with an individual notice to quit.
    • At Leydon lettings we back this up with an email containing the information in prescribed form advising of the postal delivery.
    • It would then be difficult to argue non-receipt if received by more than one means of delivery.

    Judicial Revue (JR)

    • Were a local authority to disregard an Act of Parliament, in so doing, it might act beyond its remit – See ultra vires.  A Judicial Revue would be the last option open to a victim of such act or omission.  This is an expensive time consuming process where judges review the actions taken whilst comparing the lawfulness of the acts before determining whether the actions were lawful.  If found unlawful, the local authority would have to reverse any decision.  The costs born by the loser are substantial.  Even the winner is likely to have to pay substantial sums.  Article 4 and Additional Licensing must be implemented in accordance with rules based upon evidence to support the need to introduce such measures.  Failure could result in JR.

    Judiciary

    • Judges in a court of law

    Just And Reasonable

    • Term used by courts in discretionary cases, e.g. s.8 HA’89 discretionary grounds 9 to 17 judges can refuse possession orders if it is ‘just and reasonable’ in all the circumstances.
    • Nevertheless the tenant is now on notice that a repeat offence is likley to be treated more seriously.

    K

    Key Security Code

    • This is a security system to protect the identity of a property in relation to property keys.
    • Never identify a property on a key nor provide a clue to the property address by marking the key other than with a secure key code.
    • Lost keys can enable dishonest finders easy entry to your house!
    • Key storage is best within a secure locked cabinet with access and codes restricted to those who need to know only.
    • See also access.

    L

    LA

    • Local Authority

    Land Registry

    • A register of who owns every property in England and Wales.  Exceptions are those properties not yet registered.  Registration occurs automatically upon purchase of a property.
    • Agents may have to consult the registry to establish that a Landlord purporting to own a property is in fact the owner.
    • Likewise tenants have been known to steal the identity of an owner in order to sell a property they do not own. The first the real owner knows is when he no longer receives the rent from his now departed rich tenant.

    Landlord

    • There are many types of landlord in the lettings profession:
      • Resident landlords – normally reside at the same address as their tenants and enjoy preferential tax rates
      • Non resident landlords do not reside at the same address as their tenants.  Most tenants prefer this landlord to avoid landlords influencing tenant lifestyles.
      • Buy To Let  (BTL) landlords are potentially the same as non resident landlords.  BTL rules normally prohibit personal or family member residence.
      • Commercial landlords let to wholesale and retail businesses and often involves vat on rents unlike residential landlords
      • Social landlords include local authorities and housing associations.  Social housing tenants include a higher proportion of benefit recipients.

    Landlord / lady

    • A Landlord is one who rents property to a tenant for rent.
    • The landlord bears ultimate responsibility for complying with statutory and contractual compliance.
    • There are different types of landlords:
      • Absent Landlords own property in a town, city, country etc in which they are not resident.  The further away the landlords reside the less likely they are able to attend to local issues, promptly or at all.  Unless they engage a letting agent, problems are very likely. Landlords who attempt to manage from abroad are often criticised for not properly looking after their properties.  Neighbours complain when grass is overgrown and maintenance matters are left unattended.
      • Accidental Landlords by virtue of unplanned or unintended circumstances now rent property.
      • Resident Landlords provide accommodation to their lodger tenants.
      • Non Resident Landlords live in property let by a landlord who is not resident.
      • Most tenants prefer non-residential landlords because the presence of the owner landlord is perceived to impinge upon a tenants freedom.
      • Commercial landlords owning retail shops and industrial premises let to business people.

    Landlord Associations, Forums and Organisations

    southern-landlords-association-logolandlords_logocanterbury_landlordsICO_logo

     

     

    rla_main_logo

    tpos_logo

    For more see Links

    Landlord Referencing Services (LRS)

    • There are many companies offering referencing services
    • See referencing for checklist.

    Landslip

    Large HMO

    • A large HMO is a property with more than 5 unrelated tenants forming more than one household over three or more storeys and sharing some amenities.
    • See HMO.

    Lead Tenant

    • Described by Tenancy Deposit Protection Schemes TDPs as the person to whom any correspondence is sent in order to return any deposit, if taken.
    • This can cause problems should the lead tenant drop out or leave a house prematurely e.g. if pregnant or unable to cope with their course etc.  A new lead tenant should be appointed.

    Lease

    • An archaic term for a tenancy agreement now reserved for tenancies lasting more than 3 years and for land up to 99 years.

    Leasehold

    • Where there is a leasehold there is always a Freehold.
    • The Freeholder (owner) leases property or land to the Leaseholder for a term of months or years.

    Legal Estates

    • There are two types of legal estates as defined in LPA 1925:
    • Freehold and leasehold.
    • Where there is more than one freeholder they are called common holders.  E.g. Two plus owners of a block of flats are common-holders.

    Legal Protection

    • This is a form of insurance requiring pre-payment of a premium to enable recovery of legal costs in the event of say being sued.

    Let To Let

    • Properties rented by those who seek to sublet to others for profit or convenience.
    • This is only unlawful if done without consent or restriction.
    • A controversial phenomena due to negative impact on superior landlords when deceived by inferior landlords / superior tenants.

    Letting Agent Management Software

    • This allows agents to input basic data to enable the output of intelligent information: reminders of certification expiry dates – this can save lives as well as agent reputations!  Many other benefits include landlord statements, list of viewings per property and other info enabling such analysis.  Listing properties to let or for sale is a useful feature and some programs include exclusive web advertising.  See also ERP and CFP
    • See also: Rentman, Gemini, LetMC, Carl, VTUK soon to release idx integrated software, Acquaint/BrightLogic, idx integrator software include 10Ninety, Agent Pro, Gnomen, Expert Agent, Jupix.  There are some really bad programs which will lock up a computer with annoying pop ups.  Research what’s best for you.
    • If you live in an area where most agents use a particular program there is potential merit in adopting this enabling seamless transitional compatibility when engaging new staff.
    • All perform similar tasks with varying degrees of user-un/friendliness.

    Leverage

    • In a lettings context an investor may utilise equity within property to support a mortgage or further advance to act as a deposit in order to buy yet more property.  See also gearing and further advance.

    LHA

    • Local Housing Allowance

    LIBOR

    • London Inter-bank Offered Rate
    • The word London might suggest isolation from the rest of the world but in fact the rate is set by over 15 countries every day by 11:45am.
    • Barclays contributed to distorting the rate for personal gain.
    • Some mortgages are now based on LIBOR rates as opposed to Bank of England Base Rates.

    Licensable Property

    • This is completely different to the licence described in the above case of Street and Mountford where the owner grants permission for a visitor to stay until requested to leave.
    • A licensable property requires the City Council to grant permission to a landlord to let a property via s.54. s.55  or s.80 of the HA 2004 .
    • A property designated by
      • statute or
      • local authority required to be licensed see License.

    License – By Invitation

    • Put simply this is what is granted to a visitor to a property:
      • allowing visitors to stay as long as owners permit
      • expiring upon owners asking visitors to leave.
    • See Street and Mountford for a comparison of a lease and a licence.
    • not to be confused with property licensing – the first licensee has few rights whereas the second license holder has significantly more rights to let where others may not.

    License To Let

    There are two types of property-licenses:

    Mandatory and Discretionary Licensing.

    • Mandatory (Parliament insists all such properties are licensed):
      • Part two of the Housing Act 2004 (HA 2004) covers mandatory licensing under s55.
      • This provides that a large HMO is:
        • 5 or more tenants
        • living on 3 or more storeys
        • forming two or more households
      • Must be licensed wherever located in England and Wales. This part of the act was implemented in Canterbury in 2007 – most Canterbury student landlords are familiar with this.
    • Discretionary Licensing (Parliament allows LAs to designate areas as licensable):
    • Discretionary Licensing is twofold:
      • Additional and Selective Licensing
      • “Additional Licensing”
        • is found in part 2 and s.56 HA 2004.
      • “Selective Licensing”
        • is found in part 3 under s. 80 HA 2004
    • Both Additional and Selective Licensing require Landlords to license properties in different situations but with the same outcome – hefty fees resulting in higher rents and significant paperwork.
    • Additional Licensing provides that small HMOs, i.e.
      • or more tenants
      • forming two or more households,
      • Living on any number of storeys, be licensed in “Designated” areas.
    • This part of the act is currently the controversial subject of consultation with a possible view to implementation in Canterbury in 2013.
    • Three sharing blood brothers is one household
      • not an HMO so not licensable,
    • Two brothers and a friend is two households
      • this is an HMO and potentially licensable
    • Selective Licensing enables “Local Housing Authorities to review housing conditions in their districts” and
    • requires small HMOs with
      • 3 or more tenants living on
      • any number of storeys
    • to be licensed if an area falls within certain negative criteria –
      • mainly run down housing with
      • serious anti-social behaviour
      • related to the properties in question.
    • See also Selective Licensing

    Lien

    • A lien is a form of security.
    • A lien is granted by the owner of a property (the lienor) to provide security to a lender or those with an interest (the lienee).  Similar to a mortgage or second charge.
    • Failure to honour the terms of the lien could result in the the recovery of the value of the lien from the residual value of the property after being sold.

    Lifestyle Referencing

    • Lifestyle referencing considers wider spending habits of tenants who might easily afford the rent with adequate income.  However, their lifestyles are such that their spending habits might exceed otherwise affordable budgets, potentially making such prospective tenants a poor risk.
    • See referencing for main topic.

    Limitation Act

    Section 24 Limitation Act 1980:

    • No action can be brought upon any debtor after 6 years of the date of an enforceable judgement e.g. CCJ.
    • And no arrears of interest in respect of any judgement debt is recoverable after the expiration of 6 years from the date on which the interest became due.
    • As with most laws there are exceptions.
    • A property mortgage is enforceable for 12 years after judgement
    • Provided no new action is claimed then an apparently old case can still be enforced.
    • If a debtor agrees to pay a debt over a time exceeding say six years then the debt continues to enforcible for a further 6 years beyond the last payment or acknowledgement of the debt.
    • Some debts are enforceable for up to 20 years e.g. Crown debts.
    • Lowsley v Forbes 1998 established than no new action can be enforced after 6 years but that a pre-existing judgement is enforceable within 6 years of the judgement date.
    • E.g. say a rent debt is enforced after 5 years and 11 months (within the limitation), the creditor still has a further 6 years before becoming time barred, in this case 11 years and 11 months.  Almost 12 years!
    • Any extension of time beyond 6 years requires leave of a judge (i.e. permission) to enforce and would have to have good grounds for extending.

    Litigant In Person (LIP)

    • A Litigant In Person” (LIP) is one who attends court and represents himself before a judge.
    • This saves the cost of legal representation but risks being under-represented and becoming overwhelmed by the proceedings, formalities and lack of knowledge of the law.
    • Not for the faint hearted particularly if the matter is emotional. If clear on what to do and the case is a straight forward there is minimal risk.

    Loan To Rent Ratio

    • The ratio of rent to mortgage-loan required to pay the loan expressed as a per cent.
    • Too low rent and you cannot afford the mortgage.
    • Likewise too high interest and you may struggle to pay the mortgage interest.
    • This percentage fluctuates with Bank of England interest rates or LIBOR rates as set by lenders.

    Loan To Value

    • the ratio of deposit in relation to mortgage loan.
    • Say you buy a property for 100k and your LTV is 75%
    • So you borrow £75k and you provide £25k deposit = 100%.
    • 75% LTV = 75% of debt you owe to the lender and
    • 25% of the deposit is the amount you provide to buy a property.
    • In this instance the 25% stake is also known as the equity or the amount remaining after the loan is deducted.

    Localism Act 2011

    • A five part act.
    • One part relates to property:
      • Deposits 
        • how they are protected
        • the time to protect – 30 days
        • when they should be repaid
        • how they are held – custodial or insurance.
        • when they must be registered – ASTs only
        • the prescribed information required to be given to interested parties – tenants and guarantors etc.
        • penalties of 1 to 3 times the value of the deposit for failure to comply
      • EPCs:
        • These must be procured prior to marketing.
        • made available to prospective tenants prior to viewings.
        • From 2018 must not be rated below ‘E’

    Locks

    • This is a simple word with many pitfalls for the unwary.  See also implications for TVs
    • Windows – Security v convenience
    • It is important to secure a window to prevent burglaries.
    • First floor windows may be at risk if accessible from flat roofs.
    • Porch roofs, garage extensions, front door canopies, can enable window access to burglars.
    • During hot weather if you leave a window ajar be sure the handle is at least in the locked position (with or without key)before leaving a house unattended with an open window.
    • Locks to bedroom doors Security v convenience
    • There are two costs to consider:
    • The cost in terms of safety and in terms of money.
    • Should a fire fighter attend a house and discover a locked door then this is very likely to end up with a sledge hammer hole in it to determine whether there is anyone inside lying unconscious.
    • On the one hand there is the cost of human life and on the other the cost of a new fire door.  In 25 years there have been three fire related incidents in a student property (two minor and one more serious but non fatal).
    • Tenants and Landlords view this topic in two ways:
    • Tenants may be nervous about a house mate or guest:
      entering a room causing embarrassment or threat.
      Tenants could pay with their lives e.g. fire, due to locked doors preventing access
    • Tenants generally secure a small discount form insurers by stating they have a room lock.
    • In order to save a negligible reduction on a student’s insurance premium landlords regularly pay hefty call out charges for each occasion a trades person is unable to access a house.
    • Landlords face when providing door locks.
      1. The cost of installing the lock
      2. The cost of maintaining the lock and keys
      3. The cost to attend when a tenant loses a key or locks it inside
      4. The cost of abortive time for trades people unable to gain access to a locked room.
      5.The cost of abortive time for trades people unable to gain access to the entrance door.
      6.The cost of further damage e.g. flood or fire, due to locked doors preventing access.
      7. The cost when trades people knock on a door and ring the bell repeatedly but the residents refuse to answer and ignore the trades people outside in the hope another house mate responds. This is a very regular occurrence. Likewise delivery of furniture and white goods are returned to manufacturers marked, “no one present at appointed time”.
      8. A possible prohibition against providing bedroom door locks by any mortgage lender.Bedroom doors and locks require some forethought.  If the bedroom door is locked does this mean the room is empty, or is the occupant merely asleep or in the en suite shower and thus unable to hear the door knocking over the noise of the shower?  Always lock your door when in the shower and cover yourself up before emerging into your room! Leave your key in the lock if you are inside but do not turn it.  Just leave it loosely in the lock so it can be pushed through without the need to turn so it is obvious you are present to a fire fighter.  Then if a key is available emergency access enables the lock to open quickly without breaking the door down.
    • When entering a room the normal procedure we recommend:
    • After knocking and calling out gingerly we open the bedroom door if a spare key is available, calling out, “coming in”, with the door ajar, before fully opening the door following no response.  Few trades people have access to bedroom keys and a locked door is likely to mean a further return trip before the problem can be resolved.  Meantime tenant(s) remain unaware of any attempt to repair may continue to complain that the defect remains.Example email to tenants:
    • The Heating engineer is attending on xxxxxxxxxxxxxx at an unspecified time to do a periodical inspection of your heating system.
    • Should there be any problems with plumbing please advise prior to the visit and if you are present bring any such matters to the attention of the engineer.
    • Please do leave your bedroom doors open during this inspection as all radiators will need to be accessible.  Should you have a loft hatch in your first floor bedroom, access to the loft boiler will be necessary.  Please ensure any area below the trap hatch is free of items which could be damaged by access.  Please ensure your computer especially a lap top is closed with cables capable of being moved aside to enable loft or radiator access
    • Locked doors add significantly to the cost of maintenance.  We have wrestled with the solution to this expensive problem.  It is now our policy where, having provided notice of a trades person attending, and where the trades person is then unable to access locked rooms and needs to make a return journey to charge groups for each abortive call out charge.  This statement is designed to get your attention and to ensure you stick a post-it note to your door above your room lock saying do not lock on the day appointed for a trades person to attend!The current less attractive alternative is for us to disable all key locks. Lock provision is not mandatory.  Many landlords do not provide locks and save themselves much more than the cost of the locks.  E.g. when viewing a house it takes several times longer with keys than without; adding considerably to the time taken to view and let a house.  For landlords room keys are a curse, help us by leaving doors open where requested.
    • Occasionally a lock appears to need replacing  – the summer vacation is usually ideal between tenancies unless the same group return with the old keys!
    • In every instance lock replacement needs to be done with very careful planning to avoid lock outs.
      All tenants should have a key copied and provided prior to fitting.
      Spares are also provided to those depending on the key for emergency access.
    • To other landlords reading this (unless you have a key alike system) the normal procedure I follow in this:
    • Visit the house just to make sure the lock is defective WD40 cures sticking lock problems. A screwdriver cures most others.
    • If you have to change the lock first measure the length of the existing lock say 4 ½ inches (if it protrudes too far already it is probably too long and as such is a security risk as could be easily snapped in half by a burglar – measure the door width and ask the locksmith for the optimum size.
    • Establish the profile (oval, keyhole, etc)
    • Visit the locksmith (in Canterbury this could be ” ACME Locks and Keys” near the Sainsbury roundabout or ATP Howfield now in Wincheap Canterbury.
    • If unavailable order the lock with spares ( we get say 20 keys including those supplied ).
    • Upon returning to the locksmith to collect the lock and newly cut keys I check each key is cut properly and turns comfortably without the need to fiddle with the key.
    • Fit new colour key tags and fobs with slight variation in colour to identify new keys as well as old keys still in circulation, old keys can re-appear causing confusion and distress to those locked out.
    • Email the tenants advising them to expect a lock change in due course.
    • Deliver the keys to the house prior to fitting with a date for fitting
    • 10. Double check by email or visit each tenant confirming each person has a new key copy on their key rings (whilst retaining the old key meantime)
    • 11. Fit the lock.
    • 12. Provide a copy to: Electrician, Plumber, Builder for emergencies and any key safe for spares.
    • 13. Insist all old keys are returned (so as to keep them out of circulation and not be confused as spare keys later by tenants or others)
    • 14. In an ideal world the best time to fit replacement entrance door locks is when all tenants are present – new keys are exchanged for old keys.  There may be times when access is necessary but not possible.

    Lodger

    • Where a tenant resides with the owner this describes a landlord and lodger tenancy.
    • This is not an AST and offers least protection from eviction and simultaneously more protection to the resident owner, whose interests in such a home are paramount.
    • To evict a tenant only reasonable notice need be given – but it must be in writing.
    • Following the tenant notice expiring the landlord will normally be permitted to change the locks should he wish to.
    • This said should the tenant leave any or all possessions behind the owner resident landlord must adhere to the legislation on returning the ex-tenants possessions and not treat them as his own. See (Torts) Interference with goods Act 1977.
    • The above scenario is in contrast to an owner who lives elsewhere – other than at the tenant’s home and is thus deemed to have a secure home and requires less protection.  This owner needs less protection than the resident landlord.  The tenant in this second situation has more protection and is likely to have an AST agreement.

    Low Rent Tenancies

    LP

    • If this appears on a shower unit this means Low Pressure.  Where there are many showers used simultaneously the water supply may not be adequate.  Diversity expects that no more than a certain number of units will be in operation at the same time.  In rare instances, several tenants will shower at the same time.  Solution – install more expensive plumbing system or ask tenants to establish when housemates are most likely to shower and schedule a different time of day.