New Tenant – something not quite right

by Readers Question

15:37 PM, 21st February 2017
About 4 years ago

New Tenant – something not quite right

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New Tenant – something not quite right

I have a three bed house in Surrey with a new tenant moving in on the 28th.dunno

She seems like a genuine person. Has just split with her husband, has two kids, house is very near the school. She is working part time and is relying on Tax Credits and the maintenance money from her ex to pay the rent.

She has also said she wants to pay six months’ rent in advance (never had that before).

But the credit reference has come back saying that she is medium risk and they have declined her.

Openrent has stated that next action should be to request a guarantor (which I thought I had to be honest). But am not sure.

The last tenant was a single mother relying on her ex partner to top up her money and although she struggled every month and was often late paying, she always did pay and was a lovely tenant. We’ve stayed friends actually.

I am not sure with this one though. There’s something telling me that she’s a much bigger risk. Her ex sounds like a pretty bad sort (infidelities, controlling) so money may be withdrawn, it’s very common. Also, why would she pay six months’ in advance? Do her rights as a tenant change after six months?

Any insights would be gratefully received. I am usually extremely flexible with prospective new tenants and have always trusted my instinct (only got burnt once and it wasn’t too bad) but I’m not sure with this one.

Pam


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Comments

Robert Mellors

14:46 PM, 22nd February 2017
About 4 years ago

I paid six months rent in advance on the previous house I rented. I had separated from my wife, and had my child living with me (both of us in my mum's spare bedroom), so I was desperate to get a decent home for us to live in. Despite owning several buy to lets myself, I could not legally occupy them due to the mortgage restrictions (and I would have had to make others homeless), so I paid six months rent up front to secure a tenancy of the house that I wanted to rent. I did NOT set up a cannabis farm. I stayed there for over 5 years, and only moved out because the landlord needed to sell the house. All rent was paid, and no damage was done to the house.

Yes, by all means listen to your gut feeling, and be wary of anything suspicious, (and DEFINITELY get a rent guarantor), but the mere fact that someone is offering you 6 months rent up front does not necessarily mean that anything sinister is going on.

- Just a thought, but how about accepting the 6 months rent as a deposit (and protecting it accordingly), and then let the tenant pay the rent each month? - If she falls into rent arrears then you can fall back on the s8 notice and eviction, and deduct costs from the deposit, but if all is well with her conduct (no damage and rent is paid) then she could look forward to getting the 6 months deposit back when she moves on. (and, if assuming the worst, she uses the house as a cannabis farm then at least you have the 6 month's deposit towards the repair costs).

Rod

15:01 PM, 22nd February 2017
About 4 years ago

If you're worried then leave it. It's tempting to take a chance on taking on tenants a.s.a.p. considering full council tax is payable on an empty property but don't be tricked! I recently advertised a 'let' and stated no DSS, no self employed but a charming young man came round saying he's 'just' started in business with his father. All ref's/checks came back fine 'apart' from proof of employment. Proving/disproving self employment and not on DSS is difficult and I assume the best way is to obtain a tax ref' number from HMRC? So, I've gone 'gut instinct' and keeping away!

philip ellis

15:47 PM, 22nd February 2017
About 4 years ago

I too have a tenant who chooses to pay up front. As a divorced woman with a child she likes the 'security' of knowing she can make the rent every month, having had a marriage without security, a default on a mortgage and a husband who left her with nothing. Paying up front means, in her eyes, that she never has to worry again.

Jan Martin

17:29 PM, 22nd February 2017
About 4 years ago

Reply to the comment left by "Jack Ass" at "22/02/2017 - 15:01":

Well Jack that would of been my decision too . If you do get any problems and tenant self employed then you cant go for an attachment of earnings if you needed too either.

Alison King

17:43 PM, 22nd February 2017
About 4 years ago

It may be that she has been refused before due to a poor credit check and wants to mitigate that risk. Paying six months upfront would be a reasonably sensible approach to that predicament. I would be inclined to interview her again. If she comes across as open and honest, all well and good. If she is evasive it suggests she has something to hide.

Michael Barnes

17:51 PM, 22nd February 2017
About 4 years ago

Reply to the comment left by "Robert Mellors" at "22/02/2017 - 14:46":

Taking more than two months rent as a deposit has adverse legal implications.
I cannot recall what they are(and I am not in a position to research them now) but the issue was discussed on this site a couple of years ago, and on tessa sheperson's site.

Michael Freer

17:53 PM, 22nd February 2017
About 4 years ago

Your gut instinct is important and it's giving you conflicting guidance, otherwise you wouldn't have posted here. Gut instinct alone is not a sound thing to base your business on.

Having a 6-month rent payment upfront, may ring cannabis farm alarm bells. Meet with her in person and ask why this is being put on the table? Then watch her body language closely for clues of a hidden story or lies, you'll spot them. If you are uncertain at any point, walk away.

If she passes your test of her but she's failing credit checks ask her for a guarantor that will pass them and then get RGI on the guarantor. If she fails to pay her rent after any period of time you revert to the guarantor and if they don't pay you can claim on the RGI and all court costs are paid for too, plus with a good policy they take care of all the case processing too. All you have to do is bank the cheques they send you.

If she can't provide a guarantor walk away.

Now you are using your gut as a guide and letting sound procedures and safeguards protect you. That's good business sense.

Dani Hicks

18:12 PM, 22nd February 2017
About 4 years ago

Reply to the comment left by "Michael Freer" at "22/02/2017 - 17:53":

Hi Michael,
what RGI means?

Dani Hicks

18:22 PM, 22nd February 2017
About 4 years ago

Reply to the comment left by "Jack Ass" at "22/02/2017 - 15:01":

Hi Jack,
"... I assume the best way is to obtain a tax ref’ number from HMRC..."
Do you know how do you obtain this tax ref: for checking/ chasing tenants- Directly from HMRC, or is this available only from the tenant/ potential tenant themselves?

Robert Mellors

19:55 PM, 22nd February 2017
About 4 years ago

Reply to the comment left by "Michael Barnes" at "22/02/2017 - 17:51":

Hi Michael

I'm not aware of any restrictions on how much deposit a landlord can take, I would have thought that if it is a genuine deposit that is properly protected, then any amount would be acceptable. I guess a £50,000 deposit to rent a £500 pcm house would be excessive, but surely landlords and tenants are free to agree between themselves what they both want or will accept?

I believe that if larger amounts of "rent in advance" are paid, then this could perhaps be deemed a deposit, and would thus need protecting in an approved scheme. This is a different situation to simply taking a large (agreed) deposit and protecting it properly.

I believe that if 6 months rent in advance is paid, then there may be an argument to say that if it rolls over into a periodic tenancy, then it not a monthly periodic tenancy, but a 6 monthly periodic tenancy. If this is the case then it could cause all sorts of problems when trying to obtain possession through the courts.

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