Agent holding rent paid in advance

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    Agent holding rent paid in advance

    Not a big issue but before I talk with my agent further Id just like to get some feedback if possible from the collective here. For reasons not worth going into, my new tenant is going to pay for 12 months rent up front. I asked my agent if there was a choice as to whether they or I could hold this balance and they didn't answer directly but said it was best if they hold it. At then end of the day if they do it's no big deal but I just wondered that if I insisted I wanted to hold it then would I have any wood to stand on so to speak?

    Many thanks

    #2
    Why on earth would you let the agent hold it? Let them deduct whatever % of management fee from it, and pay it over immediately.

    If your agent fold in that 12 months, your tenant isn't going to be paying you rent again as they've already paid it.
    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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      #3
      Of course you hold it. It is your money and the agent is not an escrow service. If they go bankrupt you are down the creek.

      Comment


        #4
        Agree with the above. From experience I find it prudent to consider what would happen if a company becomes insolvent.

        Bear in mind though that if all rent has been paid to you (and assuming that the agent is managing the property for the forseeable) there will be nothing to deduct expenses from. Either you will need to settle any bills yourself, or reimburse agent for them, or you could leave a small balance with them for this purpose.
        There is a fine line between irony and stupidity. If I say something absurd please assume that I am being facetious.

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          #5
          If the tenant is going to pay 12 months up front you need to be careful how the tenancy agreement is worded to avoid (a) a yearly tenancy arising when the fixed term ends (b) any money paid being deemed to be a despoit which needs protecting.

          Comment


            #6
            Originally posted by Lawcruncher View Post
            to avoid (a) a yearly tenancy arising when the fixed term ends
            Are there any negative consequences for a LL of having a spt with a period of a year?

            There used to be before it was ruled that S21(1) can be used to end a spt at any time.

            Comment


              #7
              Originally posted by MdeB View Post

              Are there any negative consequences for a LL of having a spt with a period of a year?

              There used to be before it was ruled that S21(1) can be used to end a spt at any time.
              I confess that decision puzzled me. The downside is that the tenancy may cease to be an assured tenancy (and therefore an assured shorthold tenancy) for example if the property ceases to be the tenant's main residence. If the tenancy is not an AST obviously section 21 cannot be used and you have to give notice to quit. Absent any agreement to the contrary, a yearly tenancy can only be terminated on an anniversary of its start date and by giving not less than half a year's notice.

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