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 10 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

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Mark Alexander - Founder of Property118

13:18 PM, 16th April 2013, About 10 years ago

@Industry Observer - thank you for pointing out that some elements of Paul Barrett's comment above were libellous. I have moderated both his post and yours to remove the libellous references.

15:08 PM, 16th April 2013, About 10 years ago

IO why do you think that a high premium compared to mine mkaes that policy better!?

It isn't and it doesn't!
It puts LL off considering a cheap RGI policy.
My cheap policy paid out and it would have been NO different if I had an expensive policy.
Just because I have found a cheap policy that works doesn't mean to say it is NOT as good as the expensive ones.
Of course as a generalisation you may well be correct.
I can only quote from my experience with a cheap policy and can honestly state I would have no issue with using them again or recommending them to other LL.
Price is NOT necessarily an arbiter of an effective service.
The majors charge what they charge; NOT because they their service is necessarily better but because they market their brand and push for the max charge they think the market will stand.
Of course it is all down to what the underwriters require as far a premiums for risks covered.
NOT all underwriters have the same risk outlook and have systems to ensure they can effectively pile them high and sell them cheap.
The policies still work.
So price does not indicate the effectiveness of in this case a RGI policy

Industry Observer

15:35 PM, 16th April 2013, About 10 years ago

You obviously know better Paul and are determined to have the last word so let's leave it at that.

All I'd say is in 40 years of having policiers ranging from life cover to pet insurance I never did find one where cheap - and I mean significantly cheap - weas better.

Pet insurance is actually a very good example. PetPlan is very expensive and the premiums increase about 10% a year but they are exceptionally good when it comes to claims.

As I say you pays your money and you takes your choice. Personally I couldn't give a monkeys I just quoted names of companies with outstanding track records strecthing back literally over decades.

Mark Alexander - Founder of Property118

16:16 PM, 16th April 2013, About 10 years ago

I have to side with Paul on this one. The "big boys" have had it all there own way for a very long time, however, they are now finding their model is under attack from many angles they are very quickly losing market share. One only has to search Google or read the newspapers to identify some of the dirty tricks the established businesses have been to Court for in recent years. There are good and bad policies at both ends of the charging spectrum. The small print is the bit to be wary of. If you understand that you will usually be fine. My advice is steer clear of warranties and look at proper RGI which is regulated as an insurance sale. Then read the small print on the policy within the 14 day cooling off period and be absolutely certain that you know what to do and when to do it in the event of a claim. If you can't comply, cancel the policy. Timing and procedures is the biggest reason for these types of policies not paying out, regardless of how much or how little the insurer actually charges.


19:53 PM, 17th April 2013, About 10 years ago

Take the guarantee.
But be careful with the 6 months up front and more than 5 weeks rent of a six month AST. Some people say you might be creating a tenancy of sixmonthly periods rather than monthly. This could go very sour if true especially during any periodic period after the first six months. Also some say more than 5 weeks of six months may create a premiun which could make the AST transferable.
Renew the AST now and again to re-reference the dad!

0:53 AM, 18th April 2013, About 10 years ago

I agree with you Mark that I am correct.
Sometime people are loath to accept a market has changed!
I would go even further in DD on any RGI policy.
I would ascertain WHAT the claim requirements are BEFORE I took a policy out.
I wouldn't give myself 14 days as by then it might not be the policy you wanted.
Then you cancel and go for another one that you like as a result of checking their claim process.
Tenant is checked and FAILS!!!
I would like to have a list of ALL the RGI companies claim process and requirements FIRST; then look at the facilities that the RGI policy provides and then look at the price, then I would buy.
Most people do it all the other way round; which is then too late!!!

1:12 AM, 18th April 2013, About 10 years ago

Had a very similar case but went badly wrong. First she had cats instead of kids, her father lived in scotland and spain. finally, she said she was starting a business hence the guarrantee but it turned out that she was on benefits!

Where it went wrong is:
1. What happens at the end of the 6 months when they give excuses for the late money.
2. The money gets later and later with usual promises until it gets 2 or 3 months late
3. You wait until the end of contract and give notice, she stays put and played the eviction system.
4. The dad then denied he was the guarantor and it took a lenghty court case to get the CCJ on him for part of the outstanding money. Dont accepted a guarantee unless the person is in England or Wales otherwise, they can drag the scottish courts into it and then its game over.
5. When she was evicted, she trashed the place with cat poop everywhere.
6. In the end I got my money back but took about a year of pulling my hair out.

Dont do it - get her checked out and then go on a monthly basis. 6 months sounds tempting but its not.

5:47 AM, 18th April 2013, About 10 years ago

Setting sympathies aside and assuming due diligence has been done on the facts I see nothing wrong with the tenant. Rarely is there a perfect tenant and each case must be judged on merit
I have had a similar experience with a long term tenant who fell ill and went on income support. for a year. They maintain the house well and the only issue was my insurance company who declared that they did not insure for support tenants. After a brief chat they conceded as the tenant had been in place for a couple of years. They have now been a tenant for 12 years and the tenant is back at work

But just sometimes the right thing is also the human thing to do

Claudio Valentini

13:59 PM, 18th April 2013, About 10 years ago

Has the Law changed ? 10 years ago I went abroad on assignment and rented out my home through an established Estate & letting agency. They found some tenants fairly quickly - a self employed businessman with his 'Other woman'. Due to his divorce proceedings and the freeze of his assets etc he failed the credit reference but he had the cash to pay. The agency suggested he pay up front if he liked the property, so we did a 6 month AST and the Agency kept the upfront cash in their client account and transferred it to me on monthly basis. This seemed like an elegant solution - however I appreciate that I was on a full management and the law may have changed ( or even then it was plain wrong?). Could a trusted third party not hold any upfront rent and transfer it to the landlord periodically?

Londoner 43

8:35 AM, 20th April 2013, About 10 years ago

Query to Paul Barrett: Which company provides your RGI? Would be very useful for future needs! I currently have a rental warranty on my tenant, but after reading the correspondence on this matter, I realised I should have taken a RGI.

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