Tenant offering to pay 6 months rent up front

Tenant offering to pay 6 months rent up front

12:03 PM, 10th January 2014, About 8 years ago 68

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We have just recently bought a property and are renting it through a letting agent.

They have possibly found us a tenant 🙂

She is currently renting in the area and wants to downsize but she wants to pay 6 months rent in advance.

My feelings are that this is not a good idea.

My husband can’t see a problem, but I am a bit dubious.  Tenant offering to pay 6 months rent up front

Can anybody help me overcome my fears on this?

Many thanks

Sue



Comments

by Joe Bloggs

12:27 PM, 11th January 2014, About 8 years ago

Ben, please note:
1) i did say 'IDEALLY'.
2) we have had several tenants stay with for many many years.
3) are you seriously suggesting that monthly inspections made by mutual appointment are a criminal/civil offence????????? really???????? do you have any caselaw??????
4) you are misunderstanding the point about periodic inspections...they are not just about checking on the tenant...they are also for checking on the property.
5) how can being on top of issues be stressful...surely the opposite is truer.
6) it is up to the individual the procedures they adopt and i dont believe the procedures i have described are in anyway wrong in law.
i think your normally sensible advice is out on kilter on this occassion.

by Ben Reeve-Lewis

13:03 PM, 11th January 2014, About 8 years ago

Reply to the comment left by "Joe Bloggs" at "11/01/2014 - 12:27":

But I've never worn a kilt in my life?!?!!? 🙂

by Mark Alexander

13:12 PM, 11th January 2014, About 8 years ago

Reply to the comment left by "Joe Bloggs" at "11/01/2014 - 10:55":

Monthly visits might be OK for an HMO scenario, especially if any services are included or rent top ups are paid. However, for regular working tenants paying monthly by DD or standing order I would consider monthly inspections to be a clear breach of a tenants rights to peaceful enjoyment.

I don't see anything wrong at all with taking a bottle of wine when visiting tenants. I don't do it personally because I don't seek friendship. What I seek is a professional working relationship, i.e. dealing with any issues quickly when they crop up, whether that's maintenance or something else. I do find that face to face meetings and sharing empathy over a cuppa are far better to resolve issues than writing letters. Therefore, if you I get a call, text or email from a tenant the first thing I suggest is a meeting. By all means follow that up with a curtious and professional letter outlining discussions.
.

by Joe Bloggs

13:39 PM, 11th January 2014, About 8 years ago

Reply to the comment left by "Mark Alexander" at "11/01/2014 - 13:12":

hi mark,
1) we will have to clearly disagree that 'monthly inspections to be a clear breach of a tenants rights to peaceful enjoyment'. IMO 5 mins every month for the benefit of both parties cannot possibly satisfy the test:
that there has been serious and persistent disturbance to the tenant’s occupation of the premises.
http://www.foxwilliams.com/news/704
no caselaw seen to support neither yours or bens contentions seen
2) a gift implies a favour which is unprofessional and can be misconstrued.
3) i think we are agreeing that meetings can nip problems in the bud/build rapport/ confidence and are thus more productive. periodic inspections provide the best opportunity for this when any problems can be identified and discussed. it also allows maintenance to be less reactive and more planned.
4) no one has said what they think the min/max intervals should be.

by Ian Ringrose

14:06 PM, 11th January 2014, About 8 years ago

I tend to think inspections should be every 2 or 3 months and that you should not expect the tenant to take time off work so the inspection can be done in the day time.

An inspection done by a landlord at a time that is good for a tenant when the landlord also sorts out any miner maintenance issues at the same time could be justified a lot more often than an inspection from an agent that expects the tenant to take time off work to fit in with the agents working hours.

by DC

19:33 PM, 11th January 2014, About 8 years ago

Reply to the comment left by "Mark Alexander" at "10/01/2014 - 13:24":

First of all I think Sue should take onboard ALL of the advice given and don’t be too scared by the cannabis farm stories, however regular inspections are important and if you make the tenant aware of this both verbally before the tenant signs any paperwork and then in writing in the tenancy agreement they cannot argue too much if you stick to the time scale of checks that both parties have agreed to.

Mark, what would be helpful to all of us contemplating taking rental payments of more than one month upfront (not to be confused with a properly dealt with deposit) is if you would clarify your comments (see below) and please back-up with legislation and/or case law. Thanks in advance.

“If the tenancy agreement isn’t correctly drafted you might need to give 12 months notice on a section 21 and if the tenant also pays monthly as well as paying 6 months up front then the payment will be treated as a deposit as opposed to rent in advance and must be protected accordingly.”

by Mark Alexander

11:46 AM, 13th January 2014, About 8 years ago

Reply to the comment left by "DC " at "11/01/2014 - 19:33":

@DC

The case law which determined legislation in respect of rent in advance is the Court of Appeal ruling in the case of Johnson vs Old. Tessa Shepperson of Landlord Law provided an excellent summary of the implications of this ruling here >>> http://www.landlordlawblog.co.uk/2013/04/23/court-of-appeal-decision-in-johnson-v-old-good-news-for-landlords/ it is also important read the discussion below the main article and the linked PDF document for full clarification

With regards to my other comment in respect of the required notice notice period when 6 months rent is paid in advance I am beginning to doubt my own advice at this point. I need to find the case law for you so please bear with me on that.
.

by DC

13:34 PM, 13th January 2014, About 8 years ago

Reply to the comment left by "Mark Alexander" at "13/01/2014 - 11:46":

Mark
I’m aware of the Johnson v Old case and that it clarified common sense in respect of what was deposit and what was rent as far as I understood it.

If you accept 6 months’ rent in advance and also take a separate deposit payment equal to 1 months’ rent then I don’t see any confusion here at all.

But it’s your comments regarding a Sec 21 notice in conjunction with how much rent may have been paid upfront i.e. 6 months upfront rent equals 12 months’ notice in your advice that I am confused with.

The earliest you can serve a Sec 21 is at the commencement of an AST but the minimum notice you must give is 2 months so how does the amount of rent paid upfront change the legislation?

For example a tenant that is 4 months into a 6 month AST who wanted to pay his rent upfront even though he was happy to sign the tenancy agreement that stated payment shall be taken monthly and the agreement also stated that after 6 months less one day the tenancy will continue on a monthly basis where 2 months’ notice is given by either party to end the tenancy, I assume that a Sec 21 would require 2 months’ notice from now on.

Can you see any problem with this wording at all?

by Ian Ringrose

14:04 PM, 13th January 2014, About 8 years ago

Reply to the comment left by "DC " at "13/01/2014 - 13:34":

As to the legal questions with S21 notices and deposit regulations when taking 6 months’ rent in advance.

Even if the case law is on my side as a landlord, I do not wish to be faced with a tenant that has been told otherwise – so I would rather avoid getting into any legal area where is confusion over legal questions.

by DC

14:22 PM, 13th January 2014, About 8 years ago

Reply to the comment left by "Ian Ringrose" at "13/01/2014 - 14:04":

Hi Ian,
That's the point though, where is the confusion because the legislation is quite clear?


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