Taking deposit and first months rent

Duly reprimanded and quite rightly so....thank you - it won't happen again. This was the first time in over twenty years, but cheques used to be just as precarious thinking about it.

Scammers are getting more canny by the minute, but it's always enlightening to hear how it is done. One I missed in Cardiff were a plausible (ish) foreign couple (and I normally welcome them as they look after the place than a lot of Brits!) who I did not accept because I could tell they smoked heavily and it is all non-smoking. Some kind soul put a note on Gumtree about a month later (which was removed) explaining that they sublet, charged a deposit from the new tenants and then wouldn't give it back. (named Irena and Ivan). Scary isn't it?

Gilly,

"I reluctantly handed over the keys and had to trust them"

You certainly didn't have to trust them.

I wouldn't have even bothered turning up let alone giving them the keys.

If someone is going to mess you about even before the tenancy starts, what kind of tenants are they likely to turn out to be?

I always make it crystal clear that I require cleared funds in my account before handing over the property.

Well before accepting any money, I show proof of my ID and ownership. I also give them the link to the land registry site so they can independently check.

I welcome any request for further checks.

To turn up on the day and ignore all that would be inexcusable for me.

Reply to the comment left by "Monty Bodkin" at "10/07/2014 - 10:45":

No I know I didn't have to Monty, I had a choice. It didn't feel risky as they are an extremley nice young couple who were the first in many years to point out that they only had to part with the rent on signing the contract. I shall contact the NLA to see whether that clause can be improved. The invaluable lesson that I have learned from asking this question (and that is what questions are for surel;y) is that I must be mad to do all the paperwork the day that tenants move in (apart from the deposit protection which I do beforehand as lonlg as they have sent it of course). In future I shall adapt my practice to sort it all out in advance so thank you all for alerting me to this method. - didn't dawn on me. Normally on the day I do the contract along with the Inventory and Deposit, having sent them for perusal beforehand and having informed Utilities and Council etc. Actually Letting Agents do deserve their fees - its all such a faff - but a Section 8 even moreso!

IMHO, the tenancy agreement should be signed in advance, and the deposit and first month rent paid in cleared funds by the move in date.

If you both agree to the let and the future tenant pays you the deposit and first month rent, then the contract has most likely been created whether the tenancy agreement has been signed or not.
If the aim is to avoid creating a contract until after the payment has been made, the landlord must act and communicate very carefully.

Reply to the comment left by "Romain " at "10/07/2014 - 11:38":

'the tenancy agreement should be signed in advance, and the deposit and first month rent paid in cleared funds by the move in date.'
creation of the tenancy surely should not happen until after cleared funds are received? we would never sign the TA first. we use a 'heads of terms' document to get around this problem.

Reply to the comment left by "Joe Bloggs" at "10/07/2014 - 11:51":

I agree with you Joe, we never sign the tenancy agreement until move in day and only then when the deposit and first months rent is paid, inventory signed etc.

We do send an unsigned copy of the AST to tenants in advance though.

We very nearly came unstuc once when we signed a tenancy agreement in advance and vowed NEVER to do it again. The situation was a aback to back check in and check out between tenants. There was a problem with the property our outgoing tenant was moving into and the furniture van from the incoming tenant was outside. Fortunately we managed to persuade the outgoing tenant that he had to go and he went off to his parents for a few days. The fact the tenant moving in was a big bugger and so were his removel men probably helped. However, if he had bolted the door and refused to go we'd have been in big trouble on the basis that we had signed the AST for tyhe incoming tenant. That was several years ago, a very narrow escape and one of many of life's little lessons we have learned whilst being landlords. As I type this I still think to myself - PHEW!, that was a close one.
.

Reply to the comment left by "Mark Alexander" at "10/07/2014 - 11:58":

indeed. best not to contractually commit to give something until you have it! similarly it could have been squatted, vandalised, flooded, burnt out etc. the inventory is signed on the day, so why not the TA (rhetorically speaking)?

Reply to the comment left by "Joe Bloggs" at "10/07/2014 - 11:51":

A tenancy is not created by signing the tenancy agreement (at least if not by Deed), only the contract is.
In fact, since the contract does not have to be in writing, signing or not signing is not protection.

If the head of terms contains the key points agreed, property, term, rent, etc. IMHO it is just a tenancy agreement by a different name unless it is specifically worded to indicate that this is in principle and subject to contract, etc.
But then if you then accept payment, the likelihood is that the contract has been created.

When selling/buying a property the contract is created at exchange, but full payment and delivery of possession is done at completion.
That's the same as signing the tenancy agreement, then delivering possession once full payment has been received.

If you send an unsigned copy of the agreement to the tenant then accept the corresponding payment, I think that there is in any case a very high risk that the contract has been created because the lack of signature in itself is not key.
If you have a signed inventory then it is even worse.

Reply to the comment left by "Romain " at "10/07/2014 - 12:09":

i see what you say, but if the TA is worded badly you could create a legal obligation irrespective of receipt of funds. also the existence of a signed TA will also muddy the legal waters.
agreed a heads of terms will probably create a some sort of legal obligation once funds are received, but not before assuming this is made clear.

Reply to the comment left by "Joe Bloggs" at "10/07/2014 - 12:18":

Well, if you agree to let and they agree to pay, then that's consideration for the purpose of forming the contract even if no payment is made at that point, so you need to be careful.

My point is that I think people focus too much on that signature on the TA and overlook, or are unaware of the big picture.

If you want to be sure that no contract is created until a certain point you must really ask a lawyer to advise on exactly what you can or cannot say, do, or write from the very beginning.
It is wrong to think that you are safe because you didn't sign the TA.

Of course, it also goes both ways: If the landlord expects to be able to walk away for free until the agreed move in date, then he should be prepared to see the prospective tenant able to do the same.