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‘Let agreed’: Is this term legally binding?
What is let, or let agreed?
Let agreed is the term used when a tenant and landlord are proceeding with the process of checks, referencing and paperwork that takes place before progressing to the signing of the tenancy agreement. Here at Howsy, we aim to turn this information round in between three to five working days, so it isn’t too long to wait.
During this period both parties have committed to proceeding with the agreement, but no legal documents have been signed, so there is no legal come back if it doesn’t go ahead for any reason.
However, it is generally agreed that neither party will be exploring other options (landlords usually won’t be showing the property to other prospective tenants, and tenants are usually committed to this property) whilst this stage moves on.
Can let agreed fall through?
Let agreed can fall though, and there may be a couple of reasons that this could happen.
From a tenant’s point of view, they may decide that the property is not for them, or they may not pass referencing checks. The landlord may choose to explore options with another potential tenant, or to hold off letting the property immediately. Whilst frustrating, until a tenancy agreement has been signed, neither party has any legal recourse if this happens.
Is a tenancy application form legally binding?
No, a tenancy application form is simply a method of supplying data to an agent or landlord to process an application. All data will be held in the correct way as per GDPR, but supplying it does not give any rights to the property.
When does a tenancy agreement become legally binding?
A tenancy agreement becomes legally binding as soon as it is signed by all relevant parties – the landlord/s, and all tenants. There are certain elements that it is vital that a tenancy agreement should include, such as:
Unlike some contracts, there is no cooling off period with tenancy agreements. As soon as all parties have signed the document, it is legally binding and all parties have agreed to comply with the contents.
Your tenancy agreement is the legal document that keeps you and your tenants safe as you enter into the tenancy. Make sure you are using a document that is watertight. You can download free a Howsy template here
Can a tenant or landlord change their mind before signing a tenancy agreement?
Yes, until all signatures are on the tenancy agreement, there is no legal binding contract.
However, when a tenant has undergone referencing and details have been finalised, it is not great practice to pull out of an agreement, so it is best to voice any concerns early if you have any doubts.
Is an unwritten tenancy agreement enforceable in court?
It is possible to enter into a tenancy agreement without a written contract, but this is a VERY BAD IDEA!
A verbal agreement is a form of contract, however if the agreement hasn’t been written down in any way, there is no evidence from either party of the terms which were agreed on. This leaves both landlord and tenant in a very vulnerable position should the tenancy ever need to be ended, or the tenancy ends up in court.
It will be nigh on impossible to prove what was agreed, so a judge will have to draw conclusions on any disagreements based on evidence available. It is unlikely that you will have gathered evidence over the course of a tenancy, so any case is likely to be fairly weak.
Does let agreed mean a property is no longer available?
A let agreed property is still theoretically be available, but it does usually mean that there is a tenant undergoing checks with a view to take on the property.
If you are a tenant looking to find your perfect property, and you fall in love with a ‘let agreed’ home, don’t stop your search on the off chance – there may be a slim hope that the property will become available, however you don’t want to hang your hopes on this!
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What Does ‘Let Agreed’ Mean?
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The Meaning of ‘Let Agreed’
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.
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’?
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.
For more information, see our article on the AST agreement and our article on the Housing Act of 1988 and what it means today.
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Is there a Difference Between ‘Letting’ and ‘Renting’?
There is a difference between let and rent but arguably, in terms of the real-life consequences of using the wrong term, it’s not that important.
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.
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.
Read More Articles about Investing in Buy-to-Let
What does Let Agreed mean?
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Whether you’re ready to sell, a landlord looking to rent or are just interested in how much your property might be worth, the most accurate appraisal of your property is with an appointment with one of our experienced local agents.
Some of the terminology involved in renting or letting a property can seem a bit confusing at times, but at Belvoir we try to make everything as clear as possible! One thing that can seem confusing to a prospective tenant who is looking to rent their dream home, is seeing property details with the words Let Agreed next to them. What exactly does Let Agreed mean? And if a property is marked as Let Agreed does it mean it is now off the market and no longer available? What is the difference between a Let Agreed and Let property? Read on, and we’ll try and clarify the difference.
What is the difference between Let Agreed and Let?
In simple terms, there most certainly is a difference between a Let Agreed and Let property. Let Agreed means that a tenant has shown serious interest in a property, and has put in a verbal offer to rent it. This initial offer will have been accepted in principle by the landlord or letting agent, and as a demonstration of the tenant’s commitment, the tenant will have been asked to pay a refundable holding deposit to reserve the property, whilst the necessary referencing checks are carried out. A holding deposit is capped at no more than one week’s rent for Assured Shorthold tenancies.
Refunding holding deposits
A holding deposit will be refunded to the tenant if a landlord changes their mind and decides not to rent out the property or an agreement is not reached before the ‘deadline for agreement’ where the potential tenant is not at fault. However, a proportion of the holding deposit that is appropriate to the amount of work already carried out can be legally retained by the agent. if the tenant provides false or misleading information, fails a Right to Rent Check, decides not to proceed with letting the property for some reason, or fails to take all reasonable steps to enter an agreement, i.e. responding to the agent’s reasonable requests for information etc. Once a property has been let, the holding deposit will be credited against the tenant’s first month’s rent.
Before a Let Agreed can be finalised, the agent will need to conduct all the necessary referencing and credit checks etc to ensure that a potential tenant is who he or she says they are, has the legal right to rent a property in the UK, and is able to afford to pay the rent each month. Once all of those checks have been conducted, the landlord and letting agent are satisfied with the results, and the tenant has agreed to all the terms and conditions associated with renting that property and the agreed let will be able to proceed to completion. A tenancy agreement will then be drawn up, signed by all parties and the keys handed over ready for move-in day.
So does Let Agreed mean the property is off the market?
It should be noted that not all lets that have been agreed in principle will proceed to completion, but the majority will do. If a potential tenant notices property details with the words ‘Let Agreed’ next to it, it is better to start looking for another property, or ask the letting agent if it is possible to be put on a waiting list should that particular property come back onto the rental market for some reason in the future.
Now that you know what Let Agreed means, you might also enjoy reading our Tenant’s Guide to Renting a Property.