What Does 'Let Agreed' Mean?
The Meaning of 'Let Agreed'
If you are looking to rent somewhere, you'll often see the term 'let agreed' next to featured listings of rental property and you might have wondered why that property is still featured - why is the agent or landlord still advertising?
You'd be right in thinking, that when you see this phrase, associated with a property, featured on Rightmove or Zoopla or featured on a sign in front of a house or flat, it means that the property is no longer on the rental-market.
And yet it doesn't mean that the house in question has been let - only that it probably will be, in the not-so-distant future.
What's A Succinct Definition of 'Let Agreed'?
'Let Agreed' means that an offer by a prospective tenant on a rental property has been accepted, in principle, by the landlord or the estate agent. But, before the deal can be completed and the keys are handed over, there will need to be checks done on the tenant, including credit checks, immigration checks (right-to-rent) and contacting references.
So, if you are looking for a place to rent and see 'let agreed' next to the listing or on a signpost in front of the property then the best advice would be to probably move on and look elsewhere.
The chances are, that particular ship is going to sail.
But, it doesn't mean that the house has been rented out or that there is a rental agreement in place. If you see the perfect property, it might still be worthwhile contacting the agent and registering your interest. By doing this you could end up at the front of the queue should the deal fail, for whatever reason, in the final stages. You might also find that the agent is able to give you help or advice on how to advance your search.
In most cases, however, enquiring about renting a property that's 'Let Agreed' is going to be a long-shot and it will be at the discretion of the letting agent whether or not they allow you to even view it.
What is the Difference Between 'Let' and 'Let Agreed'?
'Let Agreed' is where a tenant and landlord have a written agreement to progress their arrangement but the parties have not yet signed off on the final rental agreement - and there is still a chance that these agreements will fail.
When a property is 'let', that means that the T's are crossed, the I's are dotted and that the rental agreement is in place. At this stage, if the tenant is not already living in the property, then there is a good chance that they will be soon.
Although there are different types of agreement that cover tenancies that might exist between landlord and tenant, the vast majority of tenancy agreements in the UK (for the private rental sector or PRS) are assured shorthold tenancy agreements or ASTs. An AST agreement is a standardised expression of UK housing law that guarantees a tenant's rights to rent and enjoy their home for the term of the contract and a landlord's rights to re-take possession of that home once the term has expired.
NB The rights of tenants and landlords using an assured shorthold tenancy agreement has changed over time and as political parties and governments adjust their policies to try and address the current housing shortage in the UK through changes in the law, everything is in flux.
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Is there a Difference Between 'Letting' and 'Renting'?
There is a difference between letting and renting but arguably, in terms of the real-life consequences of using the wrong term, it's not that important.
In the correct vernacular, a tenant 'rents' a property whereas a landlord 'lets' their property to a tenant. A landlord shouldn't really describe what they were doing as renting, rather than letting - but such distinctions aren't important to most people, where what's meant is easily understood.
What does it Mean to Lease?
A further term you're likely to hear when talking about tenancy, is the word, lease. A lease, or leasing, tends to refer to a longer period of time from what we would normally talk about with renting.
So, a lease is a form of renting but renting generally means over the short-term whereas a lease is over a much longer-term.
A lease would, therefore, more commonly apply with regard to commercial arrangements which would be covered by a Lease Deed rather than a Rental Agreement, bearing in mind that the distinction is blurry - a lease is a type of rental agreement.
Please note that none of this is meant as advice on housing law. If you are uncertain about any aspect of law then we strongly suggest you seek the advice of an expert.
Why Do People advertise 'Let Agreed' Properties When They Aren't Really Available?
It's frustrating, unquestionably, when you are looking for a home, to be presented with options that aren't actually on the market in any real sense. There are, however, good reasons why property portals and estate agents do this.
- As we highlighted above, just because they are off-market, doesn't mean that Let Agreed' properties are a done deal with a rental agreement in place. Though unlikely, the deal might still fall through and other interested parties can register their interest in the expectation that this could happen.
- With online listings, the user experience of people that have bookmarked and favourited properties has to be considered. Just deleting properties would mean their experience of the site wasn't being respected. They will expect to be able to find the same information that they bookmarked the first time around and the fact that the property is under-offer is only one piece of that information. So, to best help, their users, property portals tend to keep properties featured on their sites, even when not available.
- Showing which properties are 'let agreed' can help prospective tenants and other's, interested in local, rental markets, see how the market is behaving. A prospective tenant that can see a lot of featured opportunities turn to 'let agreed' quickly, will at least know what they are up against.
The Tenant's Journey
- Once the tenant has decided that want to live in a given property and the landlord is happy to progress the arrangement then the tenant will need to put down a deposit.
- This deposit means that the property is taken off-market but the deal is yet to be completed. At this point in the property becomes 'let-agreed'.
- The landlord or the agents now follow up on references and checks. They might require information from an employer and/or previous landlords. They will carry out a credit check and calculate an earnings-to-rent ratio. And under right-to-rent, will also check the immigration status of the prospective tenant. The tenant can really help speed this process up by supplying written information that is as precise and accurate as possible. The estate agent will, of course, help with this.
- Should a guarantor be required then they will need to go through similar background checks to the tenant.
- Finally, should the suitability of the tenant be confirmed, the deal will be completed, the agreement signed by all parties and the tenant will free to move in.
There are two different types of deposit involved with renting a property: A holding deposit and a security deposit.
A holding deposit will be required to take the property off-market (Let Agreed). Should the landlord or the agent then decide that the tenant is unsuitable because the checks have not gone well, then the tenancy applicant might be entitled to a refund.
Should the tenant decide to pull out of the agreement after this deposit has been paid they might not get this deposit back. This will depend on the terms and conditions outlined in the initial agreement. Another reason to read any written agreement you sign, carefully and search for information. You need to make sure you understand the terms and seek advice on your rights if you are unsure of anything.
A security deposit will be required before the tenant moves into the property to cover any damage or charges.
These two deposits might be merged together, meaning that a refunded holding deposit can go towards the security deposit.
NB With regard to all assured shorthold tenancy agreements, security deposits must be placed in a government-backed tenancy deposit scheme or TDP. Holding deposits do not need to go into a TDP but should they be transferred into a security deposit, then they do.
Once a property is 'Let Agreed' the responsibilities of the landlord, estate agent and tenant tend to break down as follows (although the relationship and assumed responsibilities of the landlord and agent can depend on their written agreement and of course, a landlord may choose not to use an estate agent).
Estate Agent Responsibilities
- The estate agent will take responsibility for assessing the suitability of the tenant, through referencing and checks.
- When checks are completed the agents will communicate with all parties to agree on a date for the tenant to move in and dates for payment of rent.
- When all parties agree, the agents will oversee the signing of the Tenancy Agreement by the landlord and the tenant.
- Finally, the estate agent will take the first month's rent and safety deposit, placing the deposit in a protection scheme.
- If the agents hold the keys to the property then on the day the tenant moves in they will hand them over as long as this has been authorised by the landlord.
- The landlord needs to make sure that the property conforms to all health and safety regulations, meaning furniture and fittings need to comply with fire-safety rules, that any gas appliances have been serviced by a registered engineer and electrics checked by a qualified electrician. All certificates and documents need to be kept safe.
- It is important to make an inventory of any furniture and fittings in the property, noting their condition. In some cases, the estate agent will do this on behalf of the landlord. It is essential that this is done correctly, at the start of any new tenancy as tenants are, legally, able to dispute any claims of damage that the landlord makes. A copy of the inventory needs to also be supplied to the tenant.
- The landlord will also want to endeavour to make sure, once the tenancy starts that the tenant is registered for any utility bills that they are supposed to pay.
A tenant's only responsibilities are to give honest information on their referencing forms, to pay the deposits and rent on-time and to respect the property according to the terms of the AST Agreement.
Summing it all Up
The 'Rent Agreed' period can be stressful for landlords and for tenants.
- The tenant knows that their personal circumstances and history are being scrutinised and aware that while the property is no longer the market, their tenancy is not finalised.
- Equally, they are likely to be in a situation where they are having to access more funds than they would usually have to do in a month.
- The landlord, on the other hand, is still between tenancies and equally aware that the deal has not yet been done and the terms, not yet agreed.
- For landlords, every day where there isn't an agreement in place, they are not receiving rent. This means lost earnings and bills to pay on an empty house.
Thankfully, the majority of rental agreements that get to this stage, go through without much friction and the best estate agents have processes in place to make sure the tenant gets the keys as soon as possible.
Hopefully, this will mean the start of a happy and mutually beneficial agreement between all parties involved - the end of a search by someone looking for somewhere to live and the end of a search for a paying tenant by a landlord.