Property Management Glossary

A

Accountable Person

An individual who is appointed to have responsibility for the fire and health and safety of the building. They will be required to prepare a Safety Case for the building and file reports regarding occurrences or issues relating to fire and health and safety.

Acquisition date

The date from which the RTM company took responsibility for the running of the property.

B

Block Management

The service offered by companies such as JCF, to act as agents on behalf of freeholders and leaseholders for blocks of apartments and flats. Responsibilities can include maintaining internal and external communal areas through to the property's annual accounts.

Building Safety Manager

The Building Safety Manager will be required to maintain and implement the Safety Case for the building, a document that is defined by the 'Accountable Person'.

C

Commonhold

A system of owning units within a property with all unit-owners having shared responsibility for the common parts.

Constitution

A document that defines the objectives and rules relating to a Tenants’ Association.

D

Deed Of Variation

An agreement signed by all parties to a lease that changes one or more of the terms of that lease.

Deficit

An amount of overspend at the end of an accounting year due to the cost of managing the property exceeding the funds collected.

E

Easements

This a term given to the rights a person may enjoy over another property, such as drainage rights, or the ability to gain access to a garden or parking.

Enfranchisement

The right of residential long-lease owners (an individual or a group of lease-owners) being able to buy the freehold of the property.

F

Forfeiture

The process of the landlord attempting to recover possession of a leasehold property typically due to a severe breach of the lease, often non-payment.

Freeholder

The owner of the land or property, such as a house, or a block of flats. The owner can be an individual, an organisation, or a company formed by individual leaseholders.

G

Gas Safety Record

A document showing all gas appliances in the property have been checked by the licensed engineer. Landlords in the UK must have the GSR updated each year.

Ground Lease

A long-term lease of land where tenant may be required to construct new improvements on the leased land. At the end of the ground lease term, the landlord will either be able to take ownership of the improvements or require the tenant to remove them.

H

Head Lease

This is typically the primary lease for the building from which the sub leases are granted to the individual leaseholders.

Holding Deposit

This is an amount of money that a tenant will be required to pay when applying for a tenancy of a property. If the tenancy does not proceed by fault of the tenant, then the landlord or the agent may retain a reasonable sum to cover their costs. Assuming the tenancy proceeds, the amount is normally deducted from the first month’s rent.

I

Indexation

The process of linking the tenant's payments under the lease to a published index, most commonly the Retail Price Index (RPI) but also sometimes the Consumer Price Index (CPI). Most typically associated with service charge payments, annual adjustment of service charge caps and rent reviews.

Interim Rent

The rent payable during a holding period while a new lease is negotiated or completed.

J

Joint and Several Liability

Where there is more than one person defined as the tenant, they will be 'jointly and severally' responsible. This means each person will be responsible for complying with the obligations under the tenancy agreement, both individually and together.

Joint Tenants

Describes owners of a property who purchased under joint tenancy, often for married couples, so if one of the owners dies then the full share of the property will pass to the surviving spouse.

L

Landlord

An individual or company that grants the lease on a property and who may also be the freeholder (owner of the property).

Land Registry

A Government body that registers and records the ownership of land and property in England and Wales.

M

Management Audit

The process of a qualified surveyor or accountant scrutinising the management functions carried out by the landlord.

Management Company (Managing Agent)

A company or organisation responsible for the management of the property or estate, appointed to carry out the management duties on behalf of the landlord or a Resident Management Company or Right to Manage Company.

N

National House Building Council (NHBC)

An independent body that sets building standards and provides warranties and insurance for new homes.

Notice period

The amount of notice that the landlord must give the tenant or the tenant give to the landlord to end the tenancy.

O

Occupancy Rights

A broad term that covers the tenant's rights contained within the tenancy agreement and gives the tenant right of occupancy of the property.

Overage

Overage is the term used when a buyer is required to pay extra in the event of future changes to a property, such as planning permissions granted to change or improve the property or the completion of development work. Overage can also be referred to as clawback or uplift.

P

Party Wall

The dividing and shared wall between two properties. The issue of party walls usually crops up when one property owner wishes to make changes to, or have some other structural effect on, the wall due to building works. The property owners may need a party wall agreement drawn up to ensure the correct procedures relating to the works are followed.

PCM

Refers to the frequency that the rental amount is due and stands for ‘per calendar month’.

Q

Quiet Enjoyment

A broad term in many leases that defines the rights that leaseholders have to live in their property without being unreasonably disrupted by others.

Qualifying Tenants

By definition, a tenant who 'qualifies' in some way to be part of a particular category, e.g. long-leaseholders, or leaseholders with special circumstances.

R

Registered Social Housing Providers

A newer term for ‘Housing Associations’ (see Housing Associations).

Reserve Funds

Many leases provide for the landlord to collect sums in advance to create a reserve or ‘sinking’ fund to ensure that sufficient money is available for future scheduled major works, such as external decorations or lift replacement.

S

Section 20

A clause in the Landlord and Tenant Act 1985 intended to protect leaseholders from paying unnecessarily large sums for work carried out to their building. Landlords or their appointed managing agents are required to follow a prescribed consultation procedure when the cost on works to the property exceeds £250 in respect of at least one flat.

Service Charge

Service charges are payments by the leaseholder to the landlord for all the services the landlord provides. These will include maintenance and repairs, insurance of the building and, in some cases, provision of lifts, estate staff, lighting and cleaning of common areas and so on. Usually the charges will also include the costs of management, either by the landlord or by a professional managing agent.

T

Tenure

The classification by which land or property is held, including freehold, long-leasehold, commonhold and letting.

Term

In this context the term refers to the period of time the lease has to run, or the lifetime of the original lease.

U

Under Lease

A lease that is not held directly from the freeholder, but from a tenant. Typically an under lease will arise by a tenant creating one out of an existing lease. The tenant of the existing lease would be the landlord of the under lease.

V

Vacant Possession

The formal and legal term describing a property as being in an empty state, and handed back to the landlord.

Valuation Office Agency

A government body in England and Wales that values properties for the purpose of Council Tax and business rates

Y

Yield

The annual income from a property defined as a percentage of its value.

Yielding Up

An obligation by the leaseholder to ‘yield up’ which means leaving the property in a defined state of repair upon leaving.

6 definitions A 4 definitions B 5 definitions C 3 definitions D 2 definitions E 3 definitions F 3 definitions G 3 definitions H 4 definitions I 2 definitions J K 8 definitions L 3 definitions M 3 definitions N 2 definitions O 2 definitions P 2 definitions Q 8 definitions R 7 definitions S 5 definitions T 1 definition U 3 definitions V W X 2 definitions Y Z

A

Accountable Person

An individual who is appointed to have responsibility for the fire and health and safety of the building. They will be required to prepare a Safety Case for the building and file reports regarding occurrences or issues relating to fire and health and safety.


Acquisition date

The date from which the RTM company took responsibility for the running of the property.


Adverse Possession

Often referred to as 'squatter's rights', Adverse Possession refers to the circumstances in which a squatter is allowed to stay in a property for so long that they gain legal ownership of the property or land. The squatter must have been allowed to occupy the property for several years, usually well beyond a time that the squatter would normally be legally evicted, so is very rarely an issue.


Alienation

The legal transfer of ownership from one party to another.


ARLA

ARLA stands for the Association of Residential Lettings Agents, the professional body for the industry.


ARMA

ARMA stands for the Association of Residential Managing Agents. It is the leading professional body for residential managing agents in England & Wales.


B

Block Management

The service offered by companies such as JCF, to act as agents on behalf of freeholders and leaseholders for blocks of apartments and flats. Responsibilities can include maintaining internal and external communal areas through to the property's annual accounts.


Building Safety Manager

The Building Safety Manager will be required to maintain and implement the Safety Case for the building, a document that is defined by the 'Accountable Person'.


Buildings Insurance

As the name suggests, an insurance policy to cover structural damage to property. This does not include contents insurance for individual properties, nor terrorism insurance.


Break Clause

A break clause will usually allow either landlord or tenant to end the tenancy earlier than the original fixed term. The clause is added to the fixed term agreement and can be used after a date defined in the agreement.


C

Commonhold

A system of owning units within a property with all unit-owners having shared responsibility for the common parts.


Constitution

A document that defines the objectives and rules relating to a Tenants’ Association.


Consultation

The process of taking into account leaseholders’ views when a significant proposal is made relating to the management of a property.


Contractors

Individuals or companies who are tasked by the landlord or managing agent to undertake to provide works or services to leasehold properties. Tradespeople, such as window cleaners, plumbers and gardeners are common examples.


Covenant

This is a clause in a lease that will require the tenant to either 'do' or 'not do' a particular action or activity relating to the property.


D

Deed Of Variation

An agreement signed by all parties to a lease that changes one or more of the terms of that lease.


Deficit

An amount of overspend at the end of an accounting year due to the cost of managing the property exceeding the funds collected.


Dispute Resolution

The broad term for either the formal or informal process of resolving a dispute between parties, for example between two leaseholders. This process can often be managed by a third party such as the managing agent.


E

Easements

This a term given to the rights a person may enjoy over another property, such as drainage rights, or the ability to gain access to a garden or parking.


Enfranchisement

The right of residential long-lease owners (an individual or a group of lease-owners) being able to buy the freehold of the property.


F

Forfeiture

The process of the landlord attempting to recover possession of a leasehold property typically due to a severe breach of the lease, often non-payment.


Freeholder

The owner of the land or property, such as a house, or a block of flats. The owner can be an individual, an organisation, or a company formed by individual leaseholders.


Full Repairing and Insuring (FRI) Lease

An FRI lease requires the tenant to be responsible for all repairs and for insuring of the property. However, FRI also includes instances where the landlord pays for external repairs and insurance, and recovers the cost via service charges or other fees.


G

Gas Safety Record

A document showing all gas appliances in the property have been checked by the licensed engineer. Landlords in the UK must have the GSR updated each year.


Ground Lease

A long-term lease of land where tenant may be required to construct new improvements on the leased land. At the end of the ground lease term, the landlord will either be able to take ownership of the improvements or require the tenant to remove them.


Ground Rent

Because a leasehold is a tenancy, it is subject to the payment of a rent to the landlord. This is the ground rent. Ground rent is a specific requirement of the lease and must be paid on the due date.


H

Head Lease

This is typically the primary lease for the building from which the sub leases are granted to the individual leaseholders.


Holding Deposit

This is an amount of money that a tenant will be required to pay when applying for a tenancy of a property. If the tenancy does not proceed by fault of the tenant, then the landlord or the agent may retain a reasonable sum to cover their costs. Assuming the tenancy proceeds, the amount is normally deducted from the first month’s rent.


Housing Association

Housing associations are private, non-profit making organisations that provide low-cost "social housing" for people in need of a home.


I

Indexation

The process of linking the tenant's payments under the lease to a published index, most commonly the Retail Price Index (RPI) but also sometimes the Consumer Price Index (CPI). Most typically associated with service charge payments, annual adjustment of service charge caps and rent reviews.


Interim Rent

The rent payable during a holding period while a new lease is negotiated or completed.


Internal Repairing Lease

A lease where the landlord pays for and retains responsibility for external repairs.


Inventory

A document that details the contents and state of condition of a property, as well as its fixtures, fittings and outdoor space. A tenant should be required to check the inventory upon starting their occupancy and the inventory will be checked again upon the tenant leaving.


J

Joint and Several Liability

Where there is more than one person defined as the tenant, they will be 'jointly and severally' responsible. This means each person will be responsible for complying with the obligations under the tenancy agreement, both individually and together.


Joint Tenants

Describes owners of a property who purchased under joint tenancy, often for married couples, so if one of the owners dies then the full share of the property will pass to the surviving spouse.


L

Landlord

An individual or company that grants the lease on a property and who may also be the freeholder (owner of the property).


Land Registry

A Government body that registers and records the ownership of land and property in England and Wales.


Lease

A legally binding agreement, typically between the freeholder and leaseholder, which transfers possession of the property (e.g. a flat in a block) for an agreed fixed period of time.


Lease Extension

A legally binding agreement to extend the length of a long-lease by a defined number of years.


Leaseholder

The holder of a long-lease and therefore the person leasing a property, often referred to as a tenant.


Leaseholder Association

An organisation that provides support, advice and if required, conflict resolution, to prospective and current leasehold owners.


Leaseholders’ Handbook

A common document issued to leaseholders which summarises the lease and provides other information such as ground rent, insurance details, and other rules or guidelines.


Life Lease

A formal agreement that gives someone occupation of a property for their entire life, usually with no right to transfer to another party.


M

Management Audit

The process of a qualified surveyor or accountant scrutinising the management functions carried out by the landlord.


Management Company (Managing Agent)

A company or organisation responsible for the management of the property or estate, appointed to carry out the management duties on behalf of the landlord or a Resident Management Company or Right to Manage Company.


Marriage Value

Marriage value is the increase in the value of the property following the completion of a lease extension, which therefore increases the property's market value. Legislation requires that the increase be shared equally between landlord and leaseholder.


N

National House Building Council (NHBC)

An independent body that sets building standards and provides warranties and insurance for new homes.


Notice period

The amount of notice that the landlord must give the tenant or the tenant give to the landlord to end the tenancy.


NRL 1 Form

A form that may be submitted to HMRC by a landlord to apply to get their UK rental income paid without deduction of UK tax. This applies if they are an individual landlord of a UK property and normally live outside the UK.


O

Occupancy Rights

A broad term that covers the tenant's rights contained within the tenancy agreement and gives the tenant right of occupancy of the property.


Overage

Overage is the term used when a buyer is required to pay extra in the event of future changes to a property, such as planning permissions granted to change or improve the property or the completion of development work. Overage can also be referred to as clawback or uplift.


P

Party Wall

The dividing and shared wall between two properties. The issue of party walls usually crops up when one property owner wishes to make changes to, or have some other structural effect on, the wall due to building works. The property owners may need a party wall agreement drawn up to ensure the correct procedures relating to the works are followed.


PCM

Refers to the frequency that the rental amount is due and stands for ‘per calendar month’.


Q

Quiet Enjoyment

A broad term in many leases that defines the rights that leaseholders have to live in their property without being unreasonably disrupted by others.


Qualifying Tenants

By definition, a tenant who 'qualifies' in some way to be part of a particular category, e.g. long-leaseholders, or leaseholders with special circumstances.


R

Registered Social Housing Providers

A newer term for ‘Housing Associations’ (see Housing Associations).


Reserve Funds

Many leases provide for the landlord to collect sums in advance to create a reserve or ‘sinking’ fund to ensure that sufficient money is available for future scheduled major works, such as external decorations or lift replacement.


Reserves

The amount of leaseholders’ funds, including any monies owed, as shown on a balance sheet at the end of the accounting period.


Resident Freehold Company

A company formed by leaseholders to collectively purchase the freehold (see enfranchisement).


Resident Management Company

A company formed by residents, with the landlord's agreement, that takes on the responsibility for the management of the property.


Residents’ Association

A term commonly also called a Tenants’ Association, However, Residents’ Associations can also be wider groups of residents who represent other residents of the property or even the wider locality.


Right To Manage

The statutory right for a group of leaseholders to collectively take over the management of their block of flats. Typically this occurs when the leaseholders are not satisfied with the current level of management.


Royal Institution of Chartered Surveyors (RICS)

The Royal Institution of Chartered Surveyors is a professional body promoting and enforcing the required standards in the valuation, management and development of land, property, construction and infrastructure.


S

Section 20

A clause in the Landlord and Tenant Act 1985 intended to protect leaseholders from paying unnecessarily large sums for work carried out to their building. Landlords or their appointed managing agents are required to follow a prescribed consultation procedure when the cost on works to the property exceeds £250 in respect of at least one flat.


Service Charge

Service charges are payments by the leaseholder to the landlord for all the services the landlord provides. These will include maintenance and repairs, insurance of the building and, in some cases, provision of lifts, estate staff, lighting and cleaning of common areas and so on. Usually the charges will also include the costs of management, either by the landlord or by a professional managing agent.


Shared Ownership

An ownership model that allows the property buyer to buy a proportion of the interest in the property whilst the landlord, which is usually a housing association, retains the remainder.


Short-hold Tenancy

A relatively short-term tenancy (e.g. 12 months) that can be granted on a property where the tenant has exclusive possession during that time.


Stamp Duty

A Government tax payable by the seller of a property as a percentage of the sale price that exceeds £125,000.


Sub-letting

The process of a leaseholder granting a tenancy to a third party, which is typically a short-hold tenancy. Not all properties or boroughs allow sub-letting.


Surplus

Any monetary amount at the end of an accounting year that is left over due to the cost of managing the property amounting to less than the funds collected.


T

Tenure

The classification by which land or property is held, including freehold, long-leasehold, commonhold and letting.


Term

In this context the term refers to the period of time the lease has to run, or the lifetime of the original lease.


Terrorism Insurance

Terrorism insurance covers numerous losses resulting from acts of terrorism. These could include damage to buildings, temporary rehousing costs, loss of rent, and associated buildings costs. Terrorism insurance is typically in addition to buildings insurance.


TORT Notice

In the context of shared residential properties, a TORT notice is a legal document that can be attached to an item that is believed to have been abandoned on the grounds of the property. The Torts (Interference with Goods) Act 1977 permits the disposal of the abandoned goods if the notice is not acted upon or the item removed.


Tripartite Lease

A lease that has three parties, typically the landlord, the leaseholder and the managing agent.


U

Under Lease

A lease that is not held directly from the freeholder, but from a tenant. Typically an under lease will arise by a tenant creating one out of an existing lease. The tenant of the existing lease would be the landlord of the under lease.


V

Vacant Possession

The formal and legal term describing a property as being in an empty state, and handed back to the landlord.


Valuation Office Agency

A government body in England and Wales that values properties for the purpose of Council Tax and business rates


Valuation Tribunal

An independent appeals body for anyone to use when challenging decisions of the Valuation Office Agency or local councils in matters of council tax or business rates.


Y

Yield

The annual income from a property defined as a percentage of its value.


Yielding Up

An obligation by the leaseholder to ‘yield up’ which means leaving the property in a defined state of repair upon leaving.


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