Property management: jargon-buster

Arrears: the sum total of late or overdue payments for rent, maintenance charges or any other regular payment for the managed property. One function of property management is to help the landlord claim arrears from the tenant.

Back letter: an agreement, often between a landlord and a tenant, that is binding on each party but is not referred to in the actual lease on the property for commercial reasons. Property management companies should advise on the need for back letters.

Common parts: the parts of the building used by all residents, such as the front entrance and lobby, common staircase and common hallways. Often a property management company will arrange cleaning and/or staff for common parts.

Covenant: in property management this is a legally binding promise, as referred to in leases.

Disposition: in property management terminology the disposition is the flat or house that's the subject of the lease.

Easement: the legal term for the right to use someone else's property such as a footpath or shared drive. If any nuisance or complaint results from this the property management company will have to resolve the dispute.

Fittings: moveable articles temporarily attached to or connected with the property. Property management companies will organise repair and replacement of fittings for the landlord.

Fixtures: articles that are attached or connected to property so as to become part of it, such as lights or radiators. If these break, tenants will call the property management company rather than the landlord—one of the real benefits of property management.

Freehold: this means that the property is owned outright—as opposed to leasehold where there is only the right to occupy a property for a specific period of time.

Ground rent: this applies only to leasehold properties and is a sum paid to the freeholder by the leaseholder. It doesn't need to be an annual payment. It can be quarterly or every six months.

Notice: an official request to vacate a property. A property management company may serve notice for a variety of reasons including failure to pay rent, breach of lease and in the case of rented property, simply because the freeholder or leaseholder wants to sell the property.

Peppercorn rent: a nominal rent intended to show that a property is leasehold and not freehold.

Service charge: the landlord may choose to pass some property management costs onto the tenant via a service charge. This pays for maintenance and insurance of communal areas and is usually only applicable to flats.