No more taking rent before signing?

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    Originally posted by DPT57 View Post

    So does this mean that if you take the first months rent and deposit less than 28 days before the tenancy begins then it is a prohibited payment until the tenancy begins at which point it is converted into rent and deposit and the breach is corrected? Are there other problems with this approach? S21?
    Ive now had another look at the Act and as far as I can see in the above circumstances a breach would still have occurred and a fine could still at least theoretically be imposed, although if the monies are refunded, (but maybe not if theyre retained as rent etc) then it would not invalidate a s21 notice. However, I think this is only for the first year under the transitional arrangements anyway.


      No bank seems to have a faster payments limit for online transactions of less than £10,000 ( ), and though near instant transfers aren't guaranteed, they are the norm. Making a holding payment with faster payments ought to establish the landlord as a payee and reduce the risk of delays due to security checks.

      Most people with internet banking should be able to make cashless payments on the day.


        Originally posted by DPT57 View Post
        Alternatively, perhaps a landlord use s1(7) of the Act to give the tenant the option of either paying the rent and deposit into their account a few days before the tenancy begins or turning up on move-in day with the cash.
        That is what I was thinking.


          Originally posted by KTC View Post

          "A payment of rent under a tenancy is a permitted payment."

          You haven't signed a tenancy agreement yet, there's definitely no tenancy yet, there's no payment that can possibly be classified as rent. You may intend the payment to discharge the liability for rent once there is a tenancy, but at the time the payment is taken in such situation, it's not rent.

          It is not necessary to have a written contract.
          The LL has agreed the contract by offering it to the tenant.
          By making the payment of first month's rent and deposit the T has accepted and agreed to the contract.
          The signing of the agreement merely provides documentary proof that both parties have agreed the written terms.

          The wording of the sections of the Act is:

          • A landlord must not require a relevant person to make a prohibited payment to the landlord in connection with a tenancy of housing in England.
          • A letting agent must not require a relevant person to make a prohibited payment to the letting agent in connection with a tenancy of housing in England.
          Provided that the LL does not prevent the tenancy from starting, then the payments are "in connection with" the tenancy.


            Originally posted by MdeB View Post
            The LL has agreed the contract by offering it to the tenant.
            Not if it were offered "subject to contract".
            I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

            I do not answer questions through private messages which should be posted publicly on the forum.


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