Understanding Rentals: What Do The Words On Your Contract Mean?
Renting houses is supposed to be a relatively straightforward process. Unless you don’t know what anything your contract means, then it can be an absolute nightmare. Signing a contract without understanding what you are getting out of the deal is borderline foolish. This article will look at some of the most common rental jargon and explain how it might affect your contract!
Arrears: Arrears refers to the money that is owed when your rent payment is late. If you are consistently unable to afford your monthly rental payments, arrears can occur and will be due in addition to what you owe each month.
Break clause: A break clause is the option to end your rental agreement before it expires. For example, if you have a 12-month tenancy with no fixed term, then once that year has passed, there will be an automatic six-month extension on the contract unless you specify otherwise when signing up for your property or in your agreement.
Build to Rent (BTR): A form of rental property related to the construction industry. This type of building offers large, luxury homes for rent that are not yet available on the market in their finished state (i.e., there will be no sales or showrooms).
Caveat: A legal term referring to a notice served by one party upon another warning them against some future actions they may do. It can also refer to an interest registered against land held under certain conditions and preventing transfer without removal of the caveat. In terms of renting, this means you should seek advice before entering into any transaction if someone has put down a caveat over your property.
Content/ liability insurance: This is crucial if you have possessions that are not covered by your landlord’s policy. For example, a renters’ or landlords’ policy will usually only cover the structure of your property (e.g., walls/floors) but won’t include any items inside it (although this can be upgraded for an additional fee). It includes other things like accidental damage and protection should someone get injured on your property while under rental agreement terms with you.
Credit score: Your credit score is a numerical representation of your financial history. If you have high credit scores, then this means that lenders are more likely to trust you with their money, while if your credit reports show that you have missed payments or owe lots of money in arrears, it can mean getting accepted for the rental will be difficult.
Dilapidations: This is how your landlord will protect themselves should you decide to give notice before the end of your tenancy agreement. This means that they can claim against any deposit you have paid for wear and tear on their property caused by yourself or members of your household.
EPC: An Energy Performance Certificate (EPC) tells a prospective tenant how energy efficient an individual home is, based on ratings from A-G, which are roughly equivalent to levels of carbon emissions per year. Under new regulations, landlords must show this certificate to tenants during the initial viewings/offer stage if requested.
Eviction ban: A ban on evicting tenants can be put in place by local councils if they feel the housing situation within their area is particularly bad. This means that landlords cannot take action against those who have breached tenancy agreements or not paid rent, etc. until this time elapses (usually around six months).
Exclusive possession: This is the right to exclusively use a part or whole of another’s property, which you are renting. For example, if you rent out certain rooms in your home, it will be necessary for both parties to make sure they have exclusive possession over these areas so that neither tenant nor landlord feels uncomfortable when using them.
House in multiple occupations (HMO): A property occupied by three or more people who are not from the same family/household. This tenancy agreement usually includes a communal area for use with cooking and living facilities shared between tenants.
Inventory: A list of any items that you own as well as their current condition, i.e., whether they’re brand new or need replacing soon (which will be essential to note if you want your deposit back at the end of your tenancy). It’s advisable to take before and after photos, so there won’t be any disputes later on about what should and shouldn’t have been included in an inventory!
Landlord license: The requirement for all landlords to be able to rent residential properties. This essentially means they are meeting all relevant legal obligations as a landlord.
Lease: A contract that grants the right to use the property for an agreed length of time for payment of rent. This can be either residential or commercial, depending on what sort of agreement is in place between you and your tenant/s!
Letting agent fees: Fees charged by estate agents when facilitating transactions through their services; these usually take the form of administration charges, holding deposits, check-in fees (for inspecting properties before contracts have been signed), tenancy renewals, etc., so it’s essential to know if this will affect your payout.
Notice period: The minimum amount of notice required from one party to another to terminate a contract. So if your tenant has given you notice, it’s essential to check the minimum period as this can vary from one month to several months.
Outgoings: These include council tax and utility bills that come with renting a property. It will be required for all tenants living at an address regardless of how many people there are under a single tenancy agreement.
Property condition report: A detailed list of anything wrong with your home, its interior, and exterior, including photos taken to back up the findings. This will be given to you by your tenants at the end of their tenancy and can also be requested during viewings.
Rent: A sum paid in exchange for using another’s property, which is usually charged daily or monthly. It may vary depending on whether it’s an unfurnished or furnished property, so check before signing any agreements!
Tenancy agreement: The legal contract between a landlord and tenant that outlines what each party should expect from one another throughout their rental term. This includes how much rent must be paid per period when it should be submitted, who is responsible for repairs/maintenance etc., so make sure you understand every term before signing anything!
Tenancy deposit: A financial sum paid by the tenant to cover any damage or general wear and tear of a property. This will be returned at the end of their tenancy unless there is something wrong with it, in which case deductions may be made.
Understand what you are signing on when renting a property. Ensure that all fees and deposits have been outlined so there are no hidden costs or anything else which might come out of left-field after moving in. This way, it’ll be clear exactly how much money is expected from both parties at all times throughout their rental term! It’s also important to understand basic legal jargon such as notice periods etc. Don’t worry about getting every detail correct. If you have trouble understanding the terms, use online resources or hire an agent to help you along.