Rent in advance – why you shouldn’t accept it?
We all know that the prohibition of rent in advance is going to make life really hard for tenants who, for whatever reason, can’t pass normal referencing and until now would have paid rent up front to get the place they want. So it’s natural that people are looking for ways to get around this. I think that’s a really dangerous thing for landlords to get involved in, and in this note, I explain why.
Basically, the Renters’ Rights Act 2025 controls when and how rent can be paid in advance, principally by making amendments to the Tenant Fees Act. (TFA).
For new assured periodic tenancies, the position is broadly as follows.
- Any “pre‑tenancy” rent payment (ie rent paid before the tenancy agreement has been entered into by both parties) is now a prohibited payment under the Tenant Fees Act.
- Landlords and agents must not “invite or encourage” a tenant, guarantor or other “relevant person” to make such a pre‑tenancy rent payment, and must not accept it if it is offered.
- The only lawful pre‑tenancy payments remain the holding deposit and the tenancy deposit, within the existing TFA caps; “initial rent” can only be taken in a short “permitted pre‑tenancy period” once the tenancy has been entered into.
- Any requirement in a new tenancy agreement that the tenant pays rent in advance (for example more than one month at a time, or before the first day of a rental period) is unenforceable.
Existing tenancies in place when the new regime starts can continue to operate on their current advance‑rent arrangements (eg 6‑monthly in advance).
One of the suggested avoidance routes is the payment of a lump sum rent in advance to a third party who will hold it in escrow, which basically means they hold it on trust with an explicit instruction to release it when certain conditions are met.
So the lump sum rent would be paid to an agent or a solicitor, someone like that, with instructions to release it in tranches, usually monthly, as each rent payment date comes up.
But the RRA is drafted with explicit anti‑avoidance language so that a landlord or agent cannot do indirectly, via a third party or escrow arrangement, what they are forbidden to do directly.
The prohibition applies to accepting a prohibited pre‑tenancy rent payment “from a tenant, guarantor or any other relevant person”. I know guidance isn’t supposed to have the force of law but in practice it does and it makes clear that paying rent to a third party (for example, an agent, an associate, or an escrow service) with instructions to release it to the landlord on rent‑due dates will still be treated as a prohibited pre‑tenancy rent payment if the money is rent and is paid before the tenancy is entered into or in excess of the permitted period/amount.
If a lump sum is not clearly rent for identified periods, there is a risk it is characterised as a tenancy deposit; any amount held as security above five weeks’ rent would then breach paragraph 2 of Schedule 1 to the Tenant Fees Act.
In short, routing rent via escrow or a third party before the tenancy is properly in force, or in an amount or timing that is not permitted, is treated as an unlawful attempt to circumvent the statutory restrictions.
As you might expect, given the government’s anti-landlord mindset, there are severe penalties for breach of these rules. Two types of penalty regime interact here: the TFA regime for prohibited payments and the general RRA civil‑penalty framework.
• A prohibited pre‑tenancy rent payment under the TFA can attract a civil penalty from the local authority of up to £5,000 for a first breach, rising to up to £30,000 for a further breach within five years, as an alternative to prosecution. So let’s assume your tenant sets up escrow payments and these start running. At some point you fall out with your tenant and they go to the local authority. If you’ve accepted 6 monthly payments from escrow then that’s you saddled with a £30,000 fine .
• Under the wider RRA enforcement framework, local authorities can impose civil penalties up to £7,000 for first or minor non‑compliance and up to £40,000 for serious or repeat non‑compliance, with the option in serious/repeated cases of criminal prosecution carrying an unlimited fine.
• Tenants and the local authority can also seek a rent repayment order for continuing or repeated breaches where the landlord fails to remedy the breach (for example, by not promptly returning a prohibited rent payment).
Always remember, local authorities now have a statutory duty (not just a power) to enforce “landlord legislation”, and they have a direct financial incentive to find breaches and enforce the payment of penalties because they will keep the cash.
Still fancy trying this way of getting rent in advance payments from tenants?
I don’t.
https://www.gov.uk/government/publications/asking-for-rent-in-advance-guidance-for-local-authorities/asking-for-rent-in-advance-guidance-for-local-authorities
Michael
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Illegal Activity by Tenants – Are You Covered?
Member Since November 2020 - Comments: 51
9:55 AM, 27th December 2025, About 4 months ago
Why would you go out of your way to accommodate sub-standard tenants ?
Member Since October 2021 - Comments: 30
10:08 AM, 27th December 2025, About 4 months ago
Crazy laws
Landlords will not rent to those who cannot prove affordability I guess
Some landlords will now surely be looking to exit this game…?
All the laws are in tenant’s favour and when they stop paying rent they still in “win – win” position
Why should landlords risk their monies in such high risk investments now…?
Once was a safe and secure investment but now if tenants stops paying will take around 12 months to get them out… if you can get them out ..!!
Member Since April 2018 - Comments: 374
10:23 AM, 27th December 2025, About 4 months ago
Reply to the comment left by Judith Wordsworth at 27/12/2025 – 08:29
You or your agent would be in breach if they “encouraged”. So what do you say if a tenant says can I pay 6 months in advance and you or the agent says yes.That could still be construed as encouragement couldn’t it and it seems we have moved in to a nasty era of the secret state police and entrapment, which I would describe as far left.
Member Since September 2018 - Comments: 3538 - Articles: 5
11:10 AM, 27th December 2025, About 4 months ago
Reply to the comment left by David at 27/12/2025 – 10:23
Explain to tenant that they have to write a letter to make a formal request to pay 6 months in advance because the law states the LL cannot be seen to be encouraging payment in this way. The letter should state they were not encouraged to make this offer and it has been done of their own free will. Get them to sign it and get it witnessed.
Surely that would then satisfy any later claim that the T instigated the offer, not a LL demand.
Member Since December 2025 - Comments: 31
11:13 AM, 27th December 2025, About 4 months ago
Reply to the comment left by Judith Wordsworth at 27/12/2025 – 08:29
You say: ‘It will be legal to take as many MONTHS in advance IF this is requested by the tenant(s), in writing.’.
This is almost correct, but not quite, and requires clarification.
It will only be legal to take many months rent in advance if the offer is made by the tenant during the tenancy, ie: after it has commenced.
The guidance you quote states:
‘During a tenancy, the tenant offers to pay the landlord the next 2 month’s rent in advance. The landlord agrees to this and accepts the payment. This would not be a breach as the tenant is free to pay rent before it is due, and a landlord can accept this.’
But this is of no use whatsoever to a landlord who will only accept a tenant if they agree to pay rent in advance before the tenancy commences, and this is the exact scenario under which most rent-in-advance payments arise.
Member Since April 2018 - Comments: 374
12:31 PM, 27th December 2025, About 4 months ago
Reply to the comment left by Reluctant Landlord at 27/12/2025 – 11:10
Sounds good, but see also Michael Crofts comments. This government is really making landlord’s jump through hoops unreasonably.
Member Since December 2025 - Comments: 31
12:45 PM, 27th December 2025, About 4 months ago
Reply to the comment left by David at 27/12/2025 – 12:31It’s not just this government.
Never forget that the core of this legislation was promoted by the previous “Conservative” government.
The Reform Party have not promised to abolish it or even reinstate s.21
The Green Party say that they want further “reforms” including rent controls.
The Liberal Democrats supported most of the provisions of the Bill which are causing trouble for landlords and want to bring forward EPC C to 2028.
We must all recognise that landlords are universally hated by all the mainstream political parties. I think I know why this is but we mustn’t get too deep into politics in this forum.
https://reform.uk/wp-content/uploads/2024/06/Final-manifesto-for-delivery-4.pdf
https://greenparty.org.uk/2024/10/09/greens-say-renters-rights-bill-must-go-further/
Member Since April 2018 - Comments: 374
1:24 PM, 27th December 2025, About 4 months ago
Reply to the comment left by Michael Crofts at 27/12/2025 – 12:45
This government has taken the RRB to another level.According to the Independent newspaper 17 June,2024 Reform does intend scrapping the RRB. Last I heard the Green party wants to abolish landlords and even team up with Labour, so I know where my vote will be going.
Member Since May 2023 - Comments: 5
5:02 PM, 27th December 2025, About 4 months ago
I have a student property. Traditionally I have always asked for the rent payment for the first month a few days before the start of the tenancy start date. I never hand out keys until I know that everyone has paid the first months rent. If I can’t receive any rent before day 1 then if even one person hasn’t paid then I can’t hand out any keys which obviously creates problems. Have I read this correctly ? Am I unable to accept any rent before day 1 ?
Member Since May 2024 - Comments: 204
10:01 PM, 27th December 2025, About 4 months ago
Have only ever taken rent in advance once. Tenant I wanted out of the ones that viewed wanted to pay 12 months upfront as an elderly couple they wanted to relocate and I guess wanted 12 months security? I refuses as I only wanted the normal 1 month periodic contract but eventually agreed on them paying 6 months in advance as that was their choice. I always insist that my agent supply’s me with about 6 people to chose from, I’m never taking the 1st one to say that they want it. I’ve only met a few but 1 couple thought I was a contractor and treated me with a lot of disrespect when they met me, they didn’t know that I owned the house. For me it’s not being predigest, it’s about being sensible. If they can not afford the property and can not afford to pay for any repairs that they leave behind, I will not take them on. I’m not talking about the 5 weeks bond, which I rarely take these days, it’s about future repairs. If it’s not worth me seeking them future costs and I have another tenant that can afford to be pursued, I dont count it as being racist.
The government seem to have a big issue with landlords wanting a guarantor. I only have 2 that have one I have no problem with the tenants but they are 2 that I would not have taken on without 1.
Due to circumstances, I have a few more benefit tenants
With new government legislation, If they want to force me to take on a tenant that I don’t think will be able to pay the rent, after they force me to take on their version of a benefit tenant, I will sell the house I can not wait to move my money out of the UK, I’ts only going to get worse