What does let agreed mean? How does it impact me? A property I want to rent says ‘let agreed’ does that mean I should look elsewhere? All these questions may come to mind when you’re looking for somewhere to rent and knowing the answers will be essential in helping you with your renting journey.
Whether you’re new to renting or you’ve rented for many years, this article has answers for everyone. Ready to get started? Let’s go!
If you’re looking for something specific, this menu will help you get there quick. If you want to get fully clued up, best get scrolling…
- What does let agreed mean?
- How long can you hold a holding deposit? Is it refundable?
- Can let agreed fall through?
- Is let and rent the same thing?
- Let vs let agreed
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What does let agreed mean?
Let agreed is a term used to explain that a tenant has been found for a property and that general terms have been agreed. As a result of this, the potential tenant will then put down a holding deposit to ensure the landlord or letting agent ‘holds’ the property for them. Essentially, a holding deposit is like a ‘reservation fee’. Let agreed is almost like the rental equivalent of ‘Sold Subject to Contract’ when buying a property. Although a property may say ‘let agreed’, the property will still be displayed on the market for a few reasons.
Firstly, it keeps other possible tenants in the loop. If a possible tenant was looking at a property and then it just disappeared off the market, it would be confusing for them as they wouldn’t know what happened to the property. If it says, ‘let agreed’ then they are aware terms have been agreed with another tenant and so they can start a search elsewhere. They can also ask to be kept on a list if the let agreed was to fall through (sorry, little spoiler here! We’ll leave it at that for now, so make sure you keep reading to find out what happens if let agreed falls through…)
Secondly, let agreed shows the demand for properties in the area. If you are looking to rent a property in an area and see lots of properties have ‘let agreed’ then this displays rent has been recently agreed and that this area is in high demand. *Little tip- if you’re looking in an area with lots of ‘let agreed’ properties then it may be a good idea to set up an alert for when properties become available for rent in this area!*
Lastly, let agreed allows other tenants to see the rental price and compare with a property they are interested in.
Is a lease and rent the same thing?
Yes and no! Yes, as both mean you don’t own the property you’re living in and you’re paying rent monthly to live there. However, there are also differences between a lease and rent which we’re going to break down for you…
A lease is a longer-term agreement, generally lasting 12 months but some landlords will offer 6, 18 or 24-month leases. During the lease, both parties must abide by the terms of the lease and it offers slightly more protection to tenants. For example, a landlord can’t decide to increase the rent without your written consent or release you without cause. However, a tenant can’t stop paying rent without consequence, which in most cases mean you’ll have to find someone to take over the rest of the lease or you’ll forfeit your tenancy deposit.
When a lease ends tenants aren’t guaranteed to have the opportunity to renew and may have to find somewhere new to live. Alternatively, the tenant could agree a month-by-month rental or sign a new lease, but this may now be at a higher price.
A rental agreement offers more flexibility as they’re generally a 30-day term which is automatically renewed at the end of the rental period unless one party decides to terminate the agreement. A rental agreement also allows tenants the freedom to get out of a property without paying a high financial price, but also means the landlord can change terms at the end of each 30-day period, as long as the tenant is given written notice. This means the landlord is able to raise the rental price every 30-days should they choose to do so.
After a fixed term ends, a landlord is able to give a ‘section 21’ notice to let the tenants know they want their property back. Or landlords are able to give a ‘section 8’ notice during the fixed term if they feel the terms of tenancy have been broken by the tenants. If you want to find out more about the rules and procedures of section 21 and section 8, then this will give you more information.
You may think that to break the tenancy agreement you would have to be overly disruptive; this isn’t always the case. BBC reported on the 24th November 2020 that a couple were being evicted for using a plug socket in a communal boiler room to charge their electronic car over the coronavirus lockdown in March, as the landlord refused to install a charging point at the property. The electricity bill was only equal to an estimated £32 and the couple were willing to pay the bill, yet the landlord would not move on this and, as the notice was served before the 29th August, the couple must leave the property within a month, leaving them homeless just before Christmas.
What happens after let agreed?
Once let agreed has been put in place, both tenants and landlords must undergo procedures to ensure the process runs smooth and doesn’t fall through.
- Put down a holding deposit
- Go through referencing and credit checks
- Sign tenancy agreement – after this the agreement becomes legally binding and there will be no cooling off period so all must comply with terms of contract
- Read through inventory of property made by the landlord to ensure everything is correct
- Set a moving date with the landlord
- Put down a tenancy deposit when all checks are complete
- Arrange an inventory report – this will detail all items in the house and the condition of the contents. This is particularly important for the end of the tenancy should any deduction need to be made as a result of any damage to items that were in the house at the start of tenancy. If you’re letting through a letting agency, they will complete this inventory report for you and both landlord and the tenant should get a copy
- Ensure tenants have given you the names of the utility providers (water, electricity and gas) and provided the meter readings, should that be requested
- Ensure all furnishings and furniture comply with the most recent fire regulations
- Ensure all gas appliances and equipment have been services by a CORGI-registered
- Ensure all electrical wiring is checked and approved by a qualified electrician
- Agree a moving date with the tenant
How long can you hold a holding deposit?
In case you’re unsure, a holding deposit is paid by the tenant to the landlord once the general terms are in place, meaning the property would be ‘let agreed’. The holding deposit will be held whilst referencing checks are ran. The cost of the holding deposit will be different from place to place, but the TFA (Tenant Fees Act) put a cap in place on 1st June 2019 stating holding deposits can’t be more than one week’s rent. A holding deposit can be held for no longer than 15 days, unless another deadline has been agreed in writing.
Are holding fees refundable?
Yes, holding deposits are refundable, however it will depend on the situation. If everything runs smooth and the tenancy goes ahead, the holding deposit is refunded. But, in most cases this deposit doesn’t go back into the tenant’s back account but is used towards move in costs, such as tenancy deposit or advance payment of rent. If the landlord was to pull out, the holding deposit is normally refunded in full. But if the tenant pulls out the landlord (or letting agent if you’re using one) can claim the holding deposit as forfeit. Some may be happy to refund the tenant, so it’s definitely worth asking! Remember – if you don’t ask, you don’t get!
Is a holding deposit legally binding?
No, even if the holding deposit is put down, it isn’t legally binding and either party can pull out. It’s worth getting written terms put in place so all parties are clear on what will happen, should anyone pull out.
What’s a tenancy deposit?
A tenancy deposit is a sum of money paid by the tenant to the landlord at the start of the tenancy. The money will be held by the landlord, or letting agency if you’re using one, through the duration of the tenancy. A tenancy deposit is also known as a ‘security deposit’. This is because the money acts as ‘security’ incase the tenant fails to meet the tenancy agreement.
If, for example, at the end of the tenancy there is damage to items in the property and it’s beyond general ‘wear and tear’, then the tenant will not get the tenancy deposit back as the landlord will need to use the money to fix what has been damaged. Although there’s no specific description of what counts as wear and tear, Shelter have a useful guide to help landlords decide what qualifies as damage and you can read it here.
The TFA put a cap on tenancy deposit on the 1st June 2019 stating that it can’t be more than 5 weeks’ rent. The tenancy deposit also won’t be refunded if there’s outstanding rent and the landlord will partially refund the deposit after deducting outstanding rent. Or if the rent arrears equal more than the tenancy deposit, then as you may expect none of the deposit will be refunded.
Can let agreed fall through?
So, we did give you a little spoiler earlier so you may already have a little inkling as to what the answer is going to be. If you missed the spoiler earlier then this might be a surprise to you! So, can let agreed fall through? Yes. Let agreed isn’t legally binding and although a verbal agreement is in place between tenant and landlord, it’s nothing more official than a ‘handshake’. The tenant will have put down a holding deposit, displaying a certain level of commitment but either party could still pull out. Or the tenant could fail the credit and referencing checks.
If you’re interested in a property but you see it has ‘let agreed’, it’s worth asking to be put on a list incase it is to fall through so you can be next in line to view the property and agree terms with the landlord.
Is let and rent the same thing?
Essentially yes but they’re two different sides of the same situation. If you’re letting a property, then this means you’re the owner and you’re ‘letting it out’ to tenants. An easy way to remember this is you’re ‘letting’ someone stay in your property. On the flip side, if you’re renting a property then you’re the tenant, you don’t own the property and you’re paying rent to the landlord.
Let vs let agreed
Let and let agreed do sound like they would be the same thing, however they are different parts of the process. Let agreed comes before ‘let’ and this just means a deal is in place in principle between the landlord and potential tenant, but no contracts have been signed and the potential tenant still has to undergo checks. Let means everything has been agreed, signed and the tenant is either moving into or already in the property. At this point, the property is normally removed from websites and from the ‘rental market’.
Another term you may come across is ‘let by’ and this means the same as let agreed. It’s just another way of letting potentially interested tenants know that there have been terms agreed with a tenant but there’s no official contract in place.
Got anymore questions on let agreed? Or maybe you have a story to share? Whatever it may be, don’t hesitate to get in touch with us!
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Millie is a perfectionist with a passion for property and writing articles. You’ll find her researching the latest housing trends and the newest up and coming areas worth investing in. Read more about Millie here.