Estate Agent Jargon Buster
The property world is full of words and expressions that may be unfamiliar to anyone who is not regularly buying, selling, letting or renting a home.
Here is our guide to all the terms you need to know and what they mean in plain old English!
Absent landlordAn abscent landlord is one who cannot be contacted. If the lessees wish to create a Right To Manage Company but are unable to contact the landlord, they are free to make a legal application to acquire the right to manage.
AcceptanceAn acceptance is the document you need to sign when accepting a lender’s mortgage offer.
Administration feeAn administration fee is a payment that is charged to cover the costs of processing a property rental application. This is paid by the tenant and will be taken from the initial monies once the tenancy starts.
Annual Percentage Rate (APR)Annual Percentage Rate (APR) is the total cost of a loan, taking into account interest charges, arrangement fees and other costs, shown as a percentage.
Agreement feeAn agreement fee is a payment which is charged to cover the costs of drawing up a tenancy agreement. This is usually shared between the landlord and tenant.
AssignTo assign is to transfer the right or interest in a property from one person to another.
Assured shorthold tenancy (AST)An assured shorthold tenancy (AST) is a widely used rental agreement where the tenant is an individual and net rent does not exceed £25,000 a year. It covers a fixed period, so both parties know the date the property will be vacated.
Base rateThe base rate is the rate of interest which the Bank of England charges for lending to other banks. These banks then use it as a benchmark for the interest rates they charge when lending money to consumers, often stipulating an interest rate “X% above the base rate”.
Break clauseA break clause is sometimes agreed between the landlord and tenant to be inserted in a fixed term agreement, typically if the initial fixed term is for a year or more. A break clause will usually allow either landlord or tenant to give written notice after a particular date or period of the tenancy in order to end the tenancy earlier than the original fixed term.
Bridging loanA bridging loan is a temporary short-term loan enabling someone to purchase a property before selling his or her existing property.
Building inspection / Structural surveyA building inspection or structural survey is a report on the physical condition of a property. The surveyor will look at all accessible parts of the property and give a written report on defects or issues affecting it. See also HomeBuyer Report. Not to be confused with a mortgage valuation (see below).
CapitalCapital, also known as equity, is an asset that is less liquid than cash. It represents the amount of money you have put into a property, investment or deposit.
ChainA chain is formed when several property sales and purchases are interdependent. A chain can be complicated but a good estate agent will be able to help keep it moving.
CompletionCompletion is the point at which the sale of the property is concluded and the buyer receives the keys.
Completion statementA completion statement is the specific items in a sale contract that govern the rights of the buyer and the duties of the seller.
ContractA contract is a legal document detailing the agreement of terms between the seller and buyer. When a sale is agreed, a draft contract is sent to the buyer by the seller’s legal representative and at exchange of contracts both parties are bound to a date on which to complete the sale.
Contract raceA contract race is where two or more purchasers are given a draft contract and the first one to exchange contracts buys the property.
ConveyancerA conveyancer is a representative, solicitor or licensed conveyancer, who deals with the legal aspects of buying or selling a property. The buyer and seller will each appoint their own conveyancer.
ConveyancingConveyancing is the legal process of transferring the ownership of a property.
CovenantsCovenants are the rules governing the property in its title deeds or lease.
Credit search referencesCredit search references are requested for a tenant applying to take up rented accommodation. Many agents and individual landlords use external companies who will contact the applicant’s employer, landlord and check the tenant’s credit history, providing a report on their financial suitability to rent.
DeedsDeeds are the legal documents that prove the ownership of the property.
DepositWhen buying: The deposit is the amount of money paid by the buyer on exchange of contracts, usually 10% of the purchase price.
When renting: The deposit is a monetary sum held by the landlord or agent for security against damage to a property or a breach of the tenancy terms. This is usually the equivalent of six weeks’ rent but may vary. If the deposit is for an Assured Shorthold Tenancy (AST), then it must be protected by one of the approved tenancy deposit protection schemes.
The Deposit Protection ServiceThe The Deposit Protection Service (DPV) is the only custodial scheme authorised by the Government; it is free to use and open to all landlords and letting agents. It requires a tenant’s deposit to be paid over to the DPS for the duration of the tenancy. This amount is then paid back at the end of the tenancy when an agreement between both parties has been reached.
DilapidationsDilapidations are items that have been damaged during a tenancy. The tenant is usually responsible for the cost of repair or replacement.
DisbursementsDisbursements are the items in addition to legal fees in conveyancing. These may include Stamp Duty Land Tax, Land Registry fees, search fees, mortgage redemption costs and any other expenses. All conveyancers should be able to estimate the likely level of disbursements before the transaction commences.
Draft contractThe draft contract is the initial version of the contract. This may be amended during the course of the sale but becomes final at the point of exchange of contracts.
EasementAn easement is a right that affects a property – such as the right of neighbours to pass over an access path or the right of the water company to have their pipes and drains running under the property.
EnquiriesEnquiries are questions that are raised by the buyer’s conveyancer, often about survey or property information forms.
EPCThe Energy Performance Certificate (EPC) shows the energy efficiency and carbon emissions of a property and gives an indication of the fuel bills. It is displayed as two graphs – the energy efficiency and environmental impact of the property. Each is graded from A (the best) to G (the worst).
EquityYour equity in your property is how much of it you own. It is the difference between the value of your home and the mortgage you still owe. Negative equity occurs when you owe more to your lender than the sale price of the property.
Exchange of contractsThe Exchange of contracts occurs when the buyer and seller both sign the contract for sale and at a certain time and date the conveyancers action the exchange. At this point, the sale is binding and no terms may be altered.
Fixtures and fittingsWhen buying: Fixtures are items that have become part of a building or land and are therefore included in the sale. Fittings are not attached to the building or land and so are not included in the sale unless otherwise agreed. The seller will complete a fixtures and fittings form that will confirm what is included in the sale, what isn’t included, and what is for sale separately.
When renting: Items usually provided in a letting that may include curtains, carpets, blinds, light fittings, kitchen units and appliances. In some cases it may also include furniture. It is advisable to check what is provided and not to assume that items will be provided.