What Does Let Agreed Mean?

Some terminology you encounter in the property industry can be confusing as its meaning is not immediately obvious, such as the term ‘let agreed’. ‘Let agreed’ is something you may come across a lot when browsing listings of rental properties. But what does let agreed mean? Is this property still available, and if not, why is it still listed? Today I will answer all of these questions and more, and give you a full understanding of the term let agreed as used in property rental listings.

Table of Contents

Let Agreed Meaning
What Happens When a Property is Let Agreed?
What’s the Difference Between Let and Let Agreed?
Is Let Agreed Legally Binding?
Why are Let Agreed Properties Still Advertised?
Can I Still Enquire About a Let Agreed Property?

Let Agreed Meaning

A property that is marked as ‘let agreed’ means that a prospective tenant has offered to rent said property, and the landlord has agreed to rent to this tenant in principle. Before a rental agreement is formalised, the landlord will need to do a few checks on the potential tenants to make sure they can rent the property. This happens before a contract is signed between the tenants and the landlord.

What Happens When a Property is Let Agreed?

When a property is let agreed, the landlord will do a series of checks to vet the prospective tenants. These are to ensure that the tenant has the legal right to rent a property in this country, that they can afford to rent said property, and other things that a landlord should check before agreeing to let their property. Here are some things that a landlord may do before a legally binding contract is signed to let the property.

The Landlord Takes A Holding Deposit From The Tenant

This is not always needed but some landlords will take a holding deposit from their prospective tenants to ‘hold’ the property. This secures the property while references and other checks are carried out. Holding deposits are capped by the Tenant Fees Act of 2019 at no more than one week’s worth of rent. If the landlord decides to let their property to that tenant, they can use the holding deposit towards a security deposit or rent payment, if the landlord decides not to let their property to that tenant, they must refund the holding deposit within 15 days, unless the tenant chooses to not rent the property themselves, they misled the landlord or their agent, or fail a Right to Rent check.

The Landlord Performs a Right To Rent Check

All landlords by law must check that prospective tenants have the right to rent a property in the UK. All new tenants must be checked, even if the landlord thinks they are British citizens. You can check by asking to see the tenant’s passport or other form of ID that indicates the country they are a citizen of. Of course, people from other countries can rent properties in the UK – they just need permission from the Home Office to do so. Proof can be provided by either their share code, immigration documents, biometric residence cards or permits, visas, and potentially other documents. You can check with your local authority to find out more about checking a tenant’s Right to Rent, or see more advice on Right to Rent checks at https://www.gov.uk/check-tenant-right-to-rent-documents. Landlords should make a copy of their tenant’s proof of their Right to Rent and keep it as a physical document or digital file. Be sure to abide by all data protection laws when doing this.

Note: some types of lets are exempt from Right to Rent checks, including hostels, refuges, care homes, hospices, student accommodation, social housing, accommodation provided for employees, and holiday lets.

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The Landlord Obtains Credit Checks, Proof of Earnings and References

The landlord may also ask for the tenant to go through a credit check, provide references from previous landlords, and provide proof of income to ensure the tenant can afford to rent the property. These checks aren’t essential or legally required, but many landlords prefer to do these checks for peace of mind. Landlords cannot charge the tenant fees for these checks, as per the Tenant Fees Act 2019.

If a tenant cannot provide all of the information required for these checks or has a poor credit score, the landlord may choose to rent to them anyway. They may ask for rent to be paid in advance, or ask the tenant to provide a guarantor who agrees to pay the rent if the tenant does not.

The landlord may also take this time to do a property inspection and inventory report, ensure that the property is in good repair, check that the gas safety certificate and electrical safety certificates are present and up to date, fire alarms are installed and working, and that the property is compliant with all regulations.

What’s the Difference Between Let and Let Agreed?

With a let property, there is a tenancy agreement in place and there is a legal contract between the landlord and tenant. The property is effectively off the rental market. Let agreed means that there is no legal contract between the two parties and the agreement could still fall through.

Is Let Agreed Legally Binding?

Let agreed is not a legally binding term – either party may pull out of the agreement with no repercussions, as no contract has been signed. Once a contract has been signed by both the landlord and tenants, then the agreement is legally binding.

Why are Let Agreed Properties Still Advertised?

Properties are often marked as ‘let agreed’ on property websites to indicate that an agreement principle has occurred, but the referencing process is still underway and no contract has been signed. It could be that the agreement will fall through so the property is still technically available. This is why the listing is still live. If a tenant’s application is rejected, the ‘let agreed’ label will be removed and the property is officially back on the market.

Can I Still Enquire About a Let Agreed Property?

Yes, you can always enquire about a let agreed property, but you may be disappointed to learn that all checks have passed and the contract has been signed by the time you hear back from the landlord or lettings agency.

Understanding technical terms like let agreed is essential to all budding property investors – take a look at our other blogs to gain more vital information about the property investment world.

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