I have been offered 6 months rent in advance

I have been offered 6 months rent in advance

19:47 PM, 14th April 2013, About 9 years ago 47

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I have been offered 6 months rent in advanceI have a prospective tenant who has been paid off with early retirement from a major high street bank together with a large critical illness payment for a heart condition.

She has 2 young boys, a broken marriage and a wealthy father as a guarantor. Her credit checks show her to be a very low risk.

She has offered 6 months rent in advance for a 6 month contract. I queried the letting agent about any change in her rights as a tenant if she pays more than 2 months in advance. He checked with his legal advisor and tells me there is nothing different due to an AST being in place. He also says I am within my rights to ask for a further 6 months in advance which will be requested 3.5 months into the tenancy.

The lady in question has a small pension income but a large amount of savings (which means nothing of course) however her father is guarantor with a secure income.

Apart from renting to my step-son last year followed by a refurbishment of the property, this will be my first ‘real’ tenant as such. Trying not to rush into anything but wanting to get the place let.

Would you take her on as a tenant?

Suzanne Edgecombe



0:13 AM, 15th April 2013, About 9 years ago

Re offset as Mark advise get the money OUT of the offset account and make sure it is put in a savings account that has NOTHING to do with the Barclay group..
You will lose the advantage of the offset facility but that pales into insignificance when as Mark suggests what might occur that Barclays state that following a review of your financial your position and taking into account the present market conditions
Barclays have decided to use the funds in your offset account to reduce the LTV mortgage you have with us.
This will mean that your borrowing facility on your flexible mortgage has now been reduced to the lower LTV amount of 55%!!!! possibly
There will be no possibility of increasing the LTV arrangement and we encourage you to reduce the LTV by making overpayments as you can.
This will make your outstanding debt with us cleared in a quicker than would normally be the case.
DON'T trust Barclays.

You don't need the LA to carry out the referencing.
It costs £10 for the RGI company to carry out a guaranteed RGI reference.
Insist the LA do NOT carry out any referencing.
You do it with the RGI company.
Mark can tell who who does it this cheaply or I can.
I have just been successful with a RGI claim for £10333.00 after 10 5 months of rent arrears.
Use an online LA if you can manage yourself or just use a LA for footfall enquires only and you use a online LA for web enquires
I would suggest that the referencing that your LA will do will NOT be GUARANTEED to qualify for an RGI policy so is effectively USELESS!
My RGI company referencing WILL.

by user_ 685

8:16 AM, 15th April 2013, About 9 years ago

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by Mark Alexander

8:30 AM, 15th April 2013, About 9 years ago

Apparently the news first appeared on page 62 in The Times newspaper this Saturday. I have not seen the article myself, I was given the "Heads Up" by a GOOD Landlords member. I am still investigating. Trouble is, I can get to The Times online as it's protected by a pay wall. I need to get hold of a copy of the article.

by Industry Observer

9:23 AM, 15th April 2013, About 9 years ago

Think we need to split out the component parts here and focus on what really matters, which is the 6 months up front a deposit.

First this much maligned agent is probably right in all they are saying though possibly more by luck than judgement.

Assignment and Premium Leases the picture has changed a lot and it is unlikely an AST would be involved and assignment would not apply. Mark there was an interesting series of posts on this subject on Tessa's site within the last month have a look.

Second the agent is quite right there is nothing to stop you asking for another 6 months say by the end of the 4th month but that would need to be catered for in the original agreement clauses. However Mark is right and you need to be very careful not to turn this into a 6 monthly rent period as if tyou do (as opposed to monthly) it will be 6 months notice (as opposed to 2 months).

Now this advance rent.

The ONLY way to be 100% certain of safety and no later claim the rent was a deposit (which it is) and subject to TDP and protection, is to cater for the set up in the initial agreement.

Either make the rent for 6 months and serve a s21(1)(b) as soon as protection is completed. Assume 1.5.13 start date, deposit all sorted by say 6.5.13 then serve and date "after" say 10 May.

The alternative is to amend the wording in the rent and payment dates sections of the agreement to make the advance payment rent (say £4200) for the period 1.5.13 to 31.10.13 then if rent is say £700 a month you state from 1.11.13 to 30.11.13 rent is £700 and thereafter £700 payable monthly in advance on 1st day of every calendar month

by Mark Alexander

9:38 AM, 15th April 2013, About 9 years ago

@Industry Observer, any reason you have not commented on my practical suggestions which avoid all of these potential difficulties?

by Industry Observer

9:51 AM, 15th April 2013, About 9 years ago


Which ones? By the way if you know an agent who can do a full tenant find and all that goes with it for just £100 as opposed to charging 2 or 3 times a week's rent as fee let me know!!

Paul we have been here before. RGI IS NOT taken out on the guarantor, or the tenant, it is taken out by the Landlord in the Landlord's name to cover a specific tenancy with named tenants who have passed referencing or, if they do not or if otherwise demanded anyway, where a Guarantor has passed referencing.

Finally and I think I have advised this before, TO ALL READERS never, ever have savings in any institution where you also have any form of debt - mortgage, personal loan, credit cards or overdraft. They can always take from the account in credit to pay off any debt, always have been able to and are now starting to do so.


3:36 AM, 16th April 2013, About 9 years ago

Again IO I may not have described the actual proper nuts and bolts of RGI; suffice to say that RGI I have if a tenant fails and they have a guarantor who is acceptable to the RGI company then I am covered.
I appreciate that I may not be describing the exact methodology by which an RGI policy is obtain with a guarantor; but all I need to know iis it WILL work in the event of a claim.
So I bow to your knowledge as to these nuts and bolts.
I don't; however really need to know them!
I don't think this lack of knowledge on my part in anyway mitigates against the principle that I can obtain RGI for my rental property in the event the tenant doesn't pay; even though the tenant only achieved the tenancy because the guarantor was RGI checked.
As a professional IO; it may be of professional interest to you as to the EXACT circumstances of RGI.
It isn't to me; I just wish to know it will pay out when I make a claim!
I'm only a SIMPLE little LL NOT an experienced property professional with many years experience as you are!!!
So sorry if I don't know the EXACT methodolgy of RGI!

by user_ 685

7:26 AM, 16th April 2013, About 9 years ago

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by Mark Alexander

7:33 AM, 16th April 2013, About 9 years ago

@Suzanne - IO will be better placed to comment on the correspondence between your letting agent and their solicitor but for what it's worth I still believe they are both wrong and I'm glad you've done it the simpler way as I suggested. Presumably you are sticking with this agent, you will be accepting the tenant and you will be purchasing RGI?

by user_ 685

8:03 AM, 16th April 2013, About 9 years ago

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