New letting- when should I demand the deposit money?

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    New letting- when should I demand the deposit money?

    Now, please dont shout at me for asking such a basic question.

    Am about to rent out my house. I have all the forms, done the checks, think i am fairly clued up about the steps... but cant seem to find the answer to this anywhere. Friends that rent out property seem to have different answers, but am wondering which is the correct/most intelligent one...

    If I have tenants who will be moving in in 6 weeks, do i take their deposit (a months rent that will be going in to a deposit scheme):

    a) now, then ask for their first months rent to be paid by standing order on the move in day
    b) now, along with the first months rent (ie both 6 wks in advance)
    c) in, say 5 weeks along with the first months rent (giving it time to clear before they move in)

    Or do i take a small sum now as security?

    Thanks, SAdie

    #2
    My agent always takes 1.5 month's rent as deposit (which goes into a scheme) and one month's rent in advance! You want your rent a month in advance. If they can't afford this, they can't afford to rent my property!!!
    Mrs Jones
    I am not an expert - my posts are my opinion and should not be taken as fact!!

    Comment


      #3
      Sorry Sadie - forgot to put that option (c) seems to be the best one. You want your rent and deposit in hand before they move in.
      Mrs Jones
      I am not an expert - my posts are my opinion and should not be taken as fact!!

      Comment


        #4
        Hi Sadie,

        There are no set rules to what you have to do but here is what I do, but many people will do it differently.

        Propsective tenants decide they want to take the property, so I take a holding deposit say of £200.

        Within 14 days I ask for the bond (minus the above amount) and any agency fees to be paid.

        The first months rent I take manually, and tell them as long as it is cleared through our bank account they can pay however they like.

        I then set up a standing order for month 2 onwards.

        Hope that gives you some help...

        Kind regards,

        John

        Comment


          #5
          Take the money as soon as you can and certainly insist on cleared funds before day one of the tenancy.

          I use an agent, my prospective tenants pay their deposit and rent to the agent well before day one.

          It is written in my agreement with the tenant that cleared funds must reach my account on or before the rent day each month. The agent discusses with the tenant that the standing order must be set up so that the money comes out of their account four days before the rent day.

          I would go on to say that if you have not received the full deposit and first month's rent fully cleared in your account on day one minus one (you get me) I would not permit the tenancy to start.

          Comment


            #6
            Many thanks, those answers give me food for thought.
            I think i will ask for 200 this week as a holding deposit as the move date is 6 wks away. Then the rest of the bond and first months rent in 5 wks in time for it all to clear.
            Sadie

            Comment


              #7
              Originally posted by sadie View Post
              I think i will ask for 200 this week as a holding deposit as the move date is 6 wks away. Then the rest of the bond and first months rent in 5 wks in time for it all to clear.
              Sounds good; and make it clear that the 200 is forfeit if they decide not to go ahead with the tenancy, and put it in writing. If not you can bet that if they do pull out, they'll try and claim that they thought that the 200 was refundable. 6 weeks is a long lead time during which you'll receive no rent, so you want to be sure they'll definitely not let you down on a whim and force you back to the starting point.

              Comment


                #8
                Originally posted by Ericthelobster View Post
                Sounds good; and make it clear that the 200 is forfeit if they decide not to go ahead with the tenancy, and put it in writing. If not you can bet that if they do pull out, they'll try and claim that they thought that the 200 was refundable. 6 weeks is a long lead time during which you'll receive no rent, so you want to be sure they'll definitely not let you down on a whim and force you back to the starting point.
                I agree, and I would also get them to sign the contract at the stage of putting the holding deposit down or shortly after.

                Imagine if it was a six month gap and the day before they pulled out and lost their £200, but you would have just lost six months of potential tenants!

                Kind regards,

                John

                Comment

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