What Does Let Agreed Mean?
Learn about what let agreed means in regards to your new home or property. From offers, acceptance and holding deposits. Scroll to read more.
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If you're at the start of your renting journey, you've likely come across properties that are let agreed. Perhaps you've already found the property you want and signed an agreement, but it's still being advertised as let agreed on the agency site.
So, what does it mean when a property is let agreed? Is it a legally binding contract, and why do landlords use it? Here, we delve into the term and explain what it means to prospective tenants.
Let agreed explained
When you see a property under let agreed status, it means an offer has been made and agreed on in principle by either the landlord or estate agent. However, before the deal can be finalized, the landlord or estate management company must conduct tenancy checks. These are measures to ensure that the prospective tenant can rent the property and is financially capable of making the rental payments.
The process involves credit checks, references from previous landlords, and the right to rent immigration checks. If, for example, the credit checks aren't good, the landlord might ask the prospective tenant to pay six months rent in advance.
Difference between let agreed and let
So, as previously mentioned, let agreed is when the landlord agrees in principle to the offer made by the prospective tenant. Until the checks are made, the landlord does not sign the official tenancy contract, which would allow the prospective tenants to move in.As a result, there is a chance that a let agreed property could fall through and become available to other prospective tenants on the market.
At this stage, both the landlord and applicant can walk away from the deal fairly quickly, so it's a good idea to do as many checks as possible and ensure that it's the right property before signing the final contract.On the other hand, when a property is let, both the landlord and prospective tenant have agreed to the rental contract terms. At this point, all the checks have been made, and the landlord is happy that the new tenants are suitable and financially capable of covering rental payments.
Can you still view a let agreed property?
In principle, you could still view a property that's under let agreed status. However, depending on the applicant's strength, most estate agents won't bother doing viewings until the agreement falls through.In most cases, they will book you for a viewing at a date after the letting agreement should be signed. If the let agreed status drops until then, you'd be the first to see the property and potentially make an offer. Therefore, it's always a good idea to inquire about let agreed homes that you're interested in since there's a chance that you could still get it.
Since finding a rental property is becoming increasingly complex, especially in London, it's a good idea to continue your search for other properties, as you wouldn't want to waste time waiting for a let agreed home that will likely soon be taken.
Is a letting agreement legally binding?
Both parties will sign a tenancy application form to reach a let agreed status. The form is not a legally binding document and is used merely to start the checks process. This document simply states the offer made by the prospective tenant and provides their details. If you find a different property that you prefer, you can still walk away without much issue.
On the other hand, if landlords identify any areas of concern regarding the prospective tenant, be it financial or through a bad reference, they can also walk away from the deal.The process only becomes legally binding when checks have been made, and both parties agree to terms. At this stage, the landlord and tenant(s) sign the tenancy agreement, which then becomes a legally binding document in the UK.
What information does a tenancy agreement include?
The tenancy agreement will include important information regarding the tenants, landlord, and tenancy terms. For instance:
- The details of the tenant(s)
- The details and address of the landlord(s)
- Property address
- Tenancy start and end dates
- Rental cost
- Deposit details
Prospective tenants must read the tenancy agreement in detail as it will stipulate the rules and regulations for the property. It will state who is responsible for what and when rent payments must be made.
Can you enter into a tenancy agreement without a contract?
In theory, you can rent a property without a tenancy agreement in place; however, it's not recommended that you do so. You can do this through a verbal agreement. But, that means there's no written evidence of the terms that you agreed on. So, for example, if you agree that the landlord is responsible for garden maintenance and then they don't do it, you can't possibly report them since there's no evidence to back your claim.
The same goes for landlords. Both parties are vulnerable in verbal agreements, so it's best to avoid them in the first place. Ultimately, it's unlikely that you'll ever come across this situation, but if you do, be sure to ask for a written contract.
What is a holding deposit?
This is a deposit you pay to a landlord or property manager to reserve a property. You should get the money back if you find a different property or the landlord finds you unsuitable to rent during the checks process. However, you could lose your money if the landlord approves and you decide not to go ahead or meet the deadlines. Current UK regulations state that a holding deposit can't be worth more than one week's rent, which you can calculate by multiplying the monthly rent by 12 and then dividing by 52.
If the landlord or property manager asks for more than this amount, you can report them.If your tenancy application is approved, the landlord has two options. They can either return the deposit to you within seven days or, with your permission, they can put it towards the tenancy deposit or the first month's rent.
Here's a breakdown of a typical tenant's journey through the lettings process.
- After viewing the property, the tenant makes an offer and signs a tenancy application process.
- If the landlord is happy with the rent offered, the let agreed period starts.
- The landlord conducts a series of checks to measure the prospective tenant's suitability.
- If the tenant is suitable, both parties sign a tenancy agreement, and a move-in date is agreed on.
Note that once both parties sign the tenancy agreement, it becomes a legally binding document. So, ensure that you are fully happy with the property and the agreement terms before signing anything.
Are rent and lease agreements the same?
Sometimes these terms are used interchangeably. So, it's essential to know the difference between them as they don't mean the same thing.
A rental agreement usually refers to short-term monthly rentals with regular renewals. The benefit of shorter contracts is that the landlord can be flexible with dates. If they need to use the property or make it vacant for whatever reason, they can do so. Also, tenants can use shorter rentals when living in locations for shorter periods of time or when trying out a new area for the first time.
On the other hand, a lease agreement refers to long-term contracts. These typically last between six to 12 months. The benefit of more extended contracts is that landlords with buy-to-let mortgages know that they will have enough funds to cover expenses, as long void periods can result in loss of income.
Why do landlords need to conduct checks?
One of the biggest worries for landlords is tenants that default on their rent payments. Many landlords in the UK have buy-to-let mortgages, so they need a monthly income to cover their expenses. Conducting checks before letting a property is the best way to minimise these issues. Landlords can ensure that the prospective tenants and guarantor are financially capable of covering the costs.
Landlords also have a chance to check references and ensure that the prospective tenants don't have a history of being difficult to work with or damaging property. Although it's tempting to accept the first offer, landlords should always wait for checks to be done before signing a tenancy agreement. A short void period is always better than a long tenancy of problems and missed payments.
Landlord and tenant responsibilities
The tenancy agreement will stipulate the landlord and tenant responsibilities. Usually, the landlord will already have these established from previous tenancies. So, check the contract to ensure that you're happy with your obligations.
Before the tenancy agreement, there are specific tasks that both parties need to complete.
- Must arrange for a professional inventory report. The document will include all the items located in the property before move-in and the property's condition (detailing any damage done by previous tenants). This step is essential for landlords as it allows them to deduct money from the deposit to cover any new damage done to the property. It also protects tenants from false accusations.
- The property and furniture must comply with the latest fire and safety regulations.
- All gas appliances need to be serviced and checked by a registered engineer.
- Must provide references from previous landlords.
- Provide proof of income through bank statements or confirmation by an employer.
- Pay a holding deposit and then a tenancy deposit.
- Check the inventory document before signing.
Once all checks are complete, you and the landlord can arrange a convenient move-in date.
What should prospective tenants consider when viewing rental properties?
If you're still viewing properties as a prospective tenant, there are some questions you should ask before settling on a property.
- Neighbours: Although most estate agents won't be able to tell you what the neighbours are like, it's always good to ask about whom you're going to be living next to.
- Area: You should do thorough research into the area you plan to rent in. Check the street and ask about how noisy it is during the day and night.
- Modifications: Ask the agent whether you'd be allowed to decorate the property by painting the walls a different colour or hanging up pictures. In most cases, this can be negotiated with the landlord.
- Costs: How much will you be paying for bills? Is anything included in the rent, such as water and internet?
- Transport: Check transport links for work. Also, how easy is it to get out and drive to other areas. This is especially important in London.
As previously mentioned, your responsibilities as a tenant will be stipulated in the tenancy agreement. If you're a strong applicant or willing to sign a longer contract, landlords tend to be more flexible.
What if the landlord doesn't uphold the tenancy agreement?
If a landlord breaches the contract and doesn't uphold the tenancy agreement, you can take the matter to court. Of course, legal action can be lengthy and costly, so it's always best avoided. Try to work out any issues with the landlord first. If they're still unwilling to keep their commitments, you can take legal action.
An excellent way to avoid these issues is to go for a professionally managed property. Property management companies are trained on the latest rules and regulations and ensure that landlords keep their commitments. Landlords who use management companies also tend to be more experienced, so you're less likely to get run into difficulties.
Can you sublet your home?
If you're temporarily moving or you'd like to leave the property a few months before the end of your tenancy, you could potentially sublet the property to new tenants. However, you will need the landlord's permission to do this in most cases. If you don't, they could take legal action against you for breaching the terms of your tenancy agreement.
Subletting without permission also gives landlords grounds to start an eviction process to remove you from the property. So ensure that you have written permission before making a decision.Getting an agent to help you find a home, or manage a property if you're a landlord, can help ensure the process is hassle-free.
Get in touch with our team today for more information.
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