new private tenant - what's the best practice?

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    new private tenant - what's the best practice?

    Till now I've had tenants on HB.
    I have a new prospect of a private tenant, recommended to me.

    My question is about best practice:
    1. Is it recommended I ask for the deposit as a 'good faith' measure - ie a few weeks before signing contracts?
    2. How do I verify whether their or my bank will approve of a direct debit? When can I do that?
    3. Do I ask for the first month's rent in advance to be paid by cheque or cash or as the first direct debit payment?
    4. Both of us say we want a long term deal. What's the best AST to have - a fixed term or periodic? If fixed term is it best to have an initial 1 year period?
    5. If a one year fixed AST, what are the pitfalls to renewing it (annually) and increasing the rent (annually)?

    what's peoples' experiences in this please?

    many thanks

    #2
    Originally posted by temujin View Post
    Till now I've had tenants on HB.
    I have a new prospect of a private tenant, recommended to me.

    My question is about best practice:
    1. Is it recommended I ask for the deposit as a 'good faith' measure - ie a few weeks before signing contracts?
    2. How do I verify whether their or my bank will approve of a direct debit? When can I do that?
    3. Do I ask for the first month's rent in advance to be paid by cheque or cash or as the first direct debit payment?
    4. Both of us say we want a long term deal. What's the best AST to have - a fixed term or periodic? If fixed term is it best to have an initial 1 year period?
    5. If a one year fixed AST, what are the pitfalls to renewing it (annually) and increasing the rent (annually)?
    1. If you mean a holding deposit, then read this: http://www.landlordzone.co.uk/forums...90&postcount=1 However, if you mean a tenancy deposit, I would advise you to take one (an amount equivalent to 4-6 weeks rent) and protect it immediately in a deposit protection scheme. Read about them here : http://www.direct.gov.uk/en/TenancyDeposit/Index.htm
    2. I think you mean a standing order, not a direct debit. As long as T has a bank account and some money going into it, T will be able to set one up. Give him your account details and ask him to show you the proof from the bank that he has set it up.
    3.I would ask for a cash payment in advance to you or into your bank account over a bank counter, so it goes into your account immediately - and before they sign the contract.
    4.I would go for a 6 or 12 month fixed term at first, so you can both make sure you are suited, then allow it to become periodic or renew the contract as you prefer.
    5 If you are using an agent to find you tenants, be aware that they will want renewal fees every time you renew the contract, but not if you just let it become periodic. The pitfall of increasing the rent every year is....er, that your Ts may decide it is too much and leave. In some areas, rents have actually fallen over the last year or two and in many others they have remained stable.
    'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

    Comment


      #3
      1. There is nothing to stop you from asking for a small non refundable holding deposit if you wish. This can be considered as part of the first month's rent when the tenancy is taken up.
      2. You don't have to - merely ask your tenant to set up a direct debit to pay the second and subsequent month's rent on the day that it is due (in advance of course).
      3. The first month's rent should be paid in cleared funds or in cash before or when you hand over the keys and the tenancy agreement is signed. The deposit in cash or cleared funds should be made available at the same time for putting in the DPS or whatever approved deposit scheme you choose to use.
      4&5. I would use an AST with a six month fixed period initially - you don't know how it is going to actually work out with this tenant so it is best to be in a position to get rid as soon as you can if necessary. When the six months is up, do nothing. Then the tenancy agreement becomes statutory periodic, tenant must give you a month's notice to leave, you must give two months notice to him, and you can adjust the rent under section 13. (Correct form to be used, minimum one month's notice of proposed increase, not more than one increase per year. I have tenants with me for over 10 years on this basis.

      P.P.
      Any information given in this post is based on my personal experience as a landlord, what I have learned from this and other boards and elsewhere. It is not to be relied on. Definitive advice is only available from a Solicitor or other appropriately qualified person.

      Comment


        #4
        Hi,

        AST is the English system so be careful with the information i base on Scots law.I have private tenants,they pay the deposit and first months rent in advance at the time of signing the lease and receiving the keys.I set up the direct debit a few months later.i wouldn't recommend immediately setting up the direct debit unless you have to travel excessively to meet up.Where at all possible ensure you have the damages deposit and first months rent in cash.Advice elsewhere is to never let someone have the property before you have these two elements.It's not the first time that someonrehas moved in paid nothing and continued to pay nothing until you get a court order.I didn't have to involve the bank.Long term deal, fine, be careful where the English and Scots systems differ here.A short assured tenancy in scotland is for six months initially and gives you more rights to recover the property easier.I am of the understandfing that the AST is the closest English equivalent.You could always renew the AST 6 monthly this is what i do with the SAT.Have a look at the Shelter website for any other info, ie. forms,increasing rent etc.The SAT allows you to increase the rent once per year.Check id the AST is the same.Sorry i can't help with periodic,I know nothing about it.Also other have mentioned gaps in contracts, I don't know the Englsih system.Citizens Advice could probably also put you in the right direction,

        Good luck.

        Comment


          #5
          Originally posted by Disillusioned View Post
          Hi,

          AST is the English system so be careful with the information i base on Scots law.I have private tenants,they pay the deposit and first months rent in advance at the time of signing the lease and receiving the keys.I set up the direct debit a few months later.i wouldn't recommend immediately setting up the direct debit unless you have to travel excessively to meet up.Where at all possible ensure you have the damages deposit and first months rent in cash.Advice elsewhere is to never let someone have the property before you have these two elements.It's not the first time that someonrehas moved in paid nothing and continued to pay nothing until you get a court order.I didn't have to involve the bank.Long term deal, fine, be careful where the English and Scots systems differ here.A short assured tenancy in scotland is for six months initially and gives you more rights to recover the property easier.I am of the understandfing that the AST is the closest English equivalent.You could always renew the AST 6 monthly this is what i do with the SAT.Have a look at the Shelter website for any other info, ie. forms,increasing rent etc.The SAT allows you to increase the rent once per year.Check id the AST is the same.Sorry i can't help with periodic,I know nothing about it.Also other have mentioned gaps in contracts, I don't know the Englsih system.Citizens Advice could probably also put you in the right direction,

          Good luck.
          Has OP said anything to make you think his rental property is in Scotland?
          'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

          Comment


            #6
            Originally posted by Disillusioned View Post
            Hi,

            AST is the English system so be careful with the information i base on Scots law.I have private tenants,they pay the deposit and first months rent in advance at the time of signing the lease and receiving the keys.I set up the direct debit a few months later.i wouldn't recommend immediately setting up the direct debit unless you have to travel excessively to meet up.Where at all possible ensure you have the damages deposit and first months rent in cash.Advice elsewhere is to never let someone have the property before you have these two elements.It's not the first time that someonrehas moved in paid nothing and continued to pay nothing until you get a court order.I didn't have to involve the bank.Long term deal, fine, be careful where the English and Scots systems differ here.A short assured tenancy in Scotland is for six months initially and gives you more rights to recover the property easier.I am of the understandfing that the AST is the closest English equivalent.You could always renew the AST 6 monthly this is what i do with the SAT.Have a look at the Shelter website for any other info, ie. forms,increasing rent etc.The SAT allows you to increase the rent once per year.Check id the AST is the same.Sorry i can't help with periodic,I know nothing about it.Also other have mentioned gaps in contracts, I don't know the Englsih system.Citizens Advice could probably also put you in the right direction,

            Good luck.
            Hi Disillusioned

            Just a pointer. Your advice is very difficult to read due to lack of paragraphs and no spaces with punctuation. It is usual to put one space after a "," and two after a "."

            Obviously, perfect grammar and punctuation isn't a pre-requisite for using this or any other forum, but it will make your advice so much more useful if it is easy to read.

            With reference to Scottish law, the majority or queries on here relate to England/Wales and tenancy laws are substantially different in Scotland (principles similar, laws different). Therefore, if you post regarding something that isn't specifically Scottish it might be worth starting with something like "In Scotland the situation is...."

            Comment

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