How to draft AST - T pays 6 months rent in advance

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    How to draft AST - T pays 6 months rent in advance

    I have a tenant that wants the property urgently, as his existing rental property is getting repossessed. I wanted to a credit check, but they say it would delay matters as they want to move their stuff asap and bailifs coming tomorrow morning.

    I normally use a standard template from one of the landlords association, but it says to pay rent monthly, so how do I draft the AST for rent payment 6 months in advance??? Do I use the normal tenancy agreement? (and ignore that they have pre-paid?)

    Also, after the six months, they may want to stay on.... so how would it effect the tenancy if it goes into periodic tenancy?

    #2
    I see trouble ahead...
    Allow tenants to protect their own deposits. I want free money when they do it wrong

    Comment


      #3
      You will no doubt get advice warning that anyone willing to pay six months' rent up front may want to start a cannabis farm or pack the property with illegal immigrants. Leaving all that aside, you need to be careful how you proceed. If you make the rent payable six-monthly that will mean that when the tenancy ends the statutory periodic tenancy will be six-monthly and neither you nor the tenant probably want that - it means giving not less than six months' notice to terminate/on a section 21 notice with the prospect of having to give almost a year's notice if you get your timing wrong.

      You should therefore leave your agreement providing for the rent to be paid monthly. That will not stop you collecting six months' rent when the tenant signs.

      Comment


        #4
        This is a classic! Tenant has problems because bailiffs are due to repossess his current rental property WHY??? Tenant wants to pay six months up front in order to persuade you to let him rent your property - I bet that he can't and will make any excuse that he will provide the funds "tomorrow" because ------------------- (you fill in the gap) so that you let him have the keys without the necessary cleared funds in your pocket. Even if you get the cleared funds, after six months - then what? There are plenty more tenants out there with good credit histories and who will respect your property and pay their rent on time each month.
        Yes, credit checks do take time and will cause delay, but this is the tactic he has to use to prevent you finding out (until it is too late) that he has a poor credit history. I bet he can't get you or you can't get a landlord's reference either!

        You are very strongly recommended not to touch this potential tenant with a bargepole, even if it takes a little longer to get one. He/she will cost you thousands in lost rent, property repair, extended voids and legal costs when (note I say "when, not "if") this tenant defaults on his/her rental agreement.

        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


          #5
          Originally posted by P.Pilcher View Post
          You are very strongly recommended not to touch this potential tenant with a bargepole, even if it takes a little longer to get one. He/she will cost you thousands in lost rent, property repair, extended voids and legal costs when (note I say "when, not "if") this tenant defaults on his/her rental agreement.
          I hope Rajeshk4u takes this advice, because from his previous posts he seems to have a very bad habit of picking problem tenants.

          Comment


            #6
            Originally posted by Mrs Mug View Post
            I hope Rajeshk4u takes this advice, because from his previous posts he seems to have a very bad habit of picking problem tenants.
            You can bring a horse to water........

            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


              #7
              Originally posted by rajeshk4u View Post
              I have a tenant that wants the property urgently, as his existing rental property is getting repossessed. I wanted to a credit check, but they say it would delay matters as they want to move their stuff asap and bailifs coming tomorrow morning.
              This has the hallmark of a knowledgeable tenant looking for a not-so-bright landlord!
              The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

              Comment


                #8
                Thank you for those have responded....

                I did have warning bells when I heard about the repossession from my letting agent (was it for non payment of rent or mortgage?).

                If these people were con men, then they would not have told my letting agent about their property getting repossessed by the bank.

                I did phone up the previous letting agents who gave good references for these tenants. They confirmed it was the Landlords fault for not paying the mortgage. (I did explain to the letting agent their name would be mud if they gave false references!!). I also checked the bank statement and there were payments for rent.

                This tenant banks with Coutts (private bank), so they transfered the six in advance months rent plus six weeks deposit into my account, which took a couple of hours. I did not hand over the keys, until the money was in my account and I did not sign on the contract until then.

                To me they are nice people, in an unfortonate situation.


                If something goes wrong I will share my sorrows on this forum? ;-)

                Comment


                  #9
                  Why didn't you ask for whole fixed term rent in advance? If they bank with Coutts they can probably afford it.

                  That would put you in a safer position.

                  Comment


                    #10
                    Maybe the fixed term was 6 months. It would be wise of the OP to agree the shortest possible AST given his track record.

                    Comment


                      #11
                      Rushed ast

                      Act in haste repent at leisure...

                      1.If you have a six month tenancy you can word it to say rent due amount on signing, or simply let them pay in advance and bank it.

                      2. Credit checks can be done there and then at your computer if they provide you their full names prior addresses and entry on the electoral register, so in less than an hour... Some referencing services will do an expedited service.

                      3. As to occupation and grow houses- say it with me "Let and forget at your peril- Do regular inspections!!!!"

                      Hope the agent asked the next question did their landlord not pay the mortgae because they didnt pay the rent?

                      Oh and bed and breakfasts to wait while the paperwork is done anyone?
                      Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

                      Comment


                        #12
                        I also think, why a T would want to pay six months in advance, when they only have to pay monthly.
                        Sometimes it to encourage a LL to take a T, who they normally wouldn't take.
                        You may have to chase for another cheque after six months, other than with A SO, the T would have to cancel it, or their no money, hence you know there a problem other than excuses by the T.
                        Also there could be a problem with defining whats the deposit, and whats rent unless you do the accounting correctly, hence invalidate any S21 you may issue, and he could try and sue you for 3* the deposit which could be 6.5 months rent * 3. Unlikely to win, but why take the risk.
                        I would say do it monthly, and get all refs in writting, and get a third party to do a credit search on him. LA sometimes lie to get ride of a bad T.
                        And if he says no inspections for the first six months run like hell.
                        Disclaimer: What I say is either right or wrong. It may be advisable to check what I say with a solicitor. If he says I am right then I am right, unless he is wrong in which case I am wrong; but if he says I am wrong then I am wrong, unless he is wrong in which case I am right

                        Comment


                          #13
                          The AST is for six months and the rent paid paid in advance for six months.

                          I guess, I need to think about when it goes into periodic.

                          Comment


                            #14
                            If they want to stay on, you could always issue a new six month agreement and request 6 months in advance again.

                            Comment


                              #15
                              rajeshk4u,

                              I would get you to read Lawcuncher post again, as it be silly, to create anything that may create anything but a normal 6 month AST with rent payable month.
                              Disclaimer: What I say is either right or wrong. It may be advisable to check what I say with a solicitor. If he says I am right then I am right, unless he is wrong in which case I am wrong; but if he says I am wrong then I am wrong, unless he is wrong in which case I am right

                              Comment

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