Rent in advance - deposit or rent?

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    Rent in advance - deposit or rent?

    My tennant has asked part way through a 1 yr Assured shorthold tennancy agreement if they can pay 6 months rent in advance.

    I have no problem with this but have read several tales of caution about rent in advance being considered as deposits and therefore need to be lodged in a tenancy deposit scheme. I want to understand what I have to do to ensure that this is not seen as a deposit as I have not requested it. The tenants initial deposit is held with the DPS

    The tenancy agreement currently states a monthly rent amount. Do I need to amend the agreement to reflect the 6 month payment?

    Also, to satisfy my mortgage I can only issue a 1 yr tenancy agreement and must renew each year so can only allow my tennant to pay 1 block of 6 month rent otherwise this would take her into a new agreement period. Would payment of a 6 month block mean that the payment terms changed to 6 monthly automatically?

    Any advice on how to handle this would be appreciated. I do not mind having to give more notice to the tenant as I do not plan to return to the property any time soon and the tennant is happy but I want to keep all the paperwork up to date.

    Thanks in advance

    #2
    I dont think you need to worry about a payment in advance. You may be slightly puzzled about why your tenant wishes to do this but that is for him/her to decide.
    To keep your paperwork in order, you could issue a receipt for 6 months rent (say Feb-July) at £x pcm as per the agreement and indicate that the next monthly rent payment is due on the appropriate day in August.
    The agreement is not affected.

    Comment


      #3
      1) Rent in advance is not a deposit providing the next rent payment isn't due for 6 months.
      2) You can accept 6 months rent even if the tenancy agreement expires before the end, because by law the tenant is transferred onto a "Statutory Periodic Tenancy" once the fixed term ends.

      Comment


        #4
        My tennant has asked part way through a 1 yr Assured shorthold tennancy agreement if they can pay 6 months rent in advance.
        Why do they want to do this?
        It is more than likely very innocent, but there is a very slight chance your tenant wants to keep you out of the way for some illegal purpose. E.g cannabis factory, brothel, multiple sublettings etc
        I'm sure your tenants don't deserve my evil suspicions, but I've come across the above before.

        Comment


          #5
          Originally posted by boletus View Post
          Why do they want to do this?
          It is more than likely very innocent, but there is a very slight chance your tenant wants to keep you out of the way for some illegal purpose. E.g cannabis factory, brothel, multiple sublettings etc
          I'm sure your tenants don't deserve my evil suspicions, but I've come across the above before.
          Valid point, so if you do accept the rent, make sure you don't let any periodic inspections get forgotten.

          Comment


            #6
            Thanks!

            Thanks for all your coments/advice, my mind is now at ease.

            aving talked to the tenants I'm sure the reasons are all innocent, they have been great to date but I will ensure that the inspections are kept up to date.

            many thanks again

            Comment


              #7
              Originally posted by boletus View Post
              for some illegal purpose. E.g cannabis factory, brothel, multiple sublettings etc
              Your reaching for nefarious reasons (any of which could be true) should also be mentioned alongside innocent/positive reasons if you want to be seen as fair.

              The tenant could have got a bonus, won the lottery or they want to use their savings to ensure they have a home in case something happens in the future, given the economic conditions currently.

              Comment


                #8
                Originally posted by DrunkenJedi View Post

                The tenant could have got a bonus, won the lottery or they want to use their savings to ensure they have a home in case something happens in the future, given the economic conditions currently.
                + ... is applying for benefits & wishes to ensure savings are below the relevant limit to qualify for said benefit..
                I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                Comment


                  #9
                  Originally posted by theartfullodger View Post
                  + ... is applying for benefits & wishes to ensure savings are below the relevant limit to qualify for said benefit..
                  But they would also most likley get their rent paid if on benefits, which means they have to expose the fact that it has been paid recently in full for 6 months.

                  Comment


                    #10
                    Originally posted by DrunkenJedi View Post
                    But they would also most likley get their rent paid if on benefits, which means they have to expose the fact that it has been paid recently in full for 6 months.

                    Not absolutely sure on that one - do all councils ask to see rent statements rather than just AST>?? Also, 'twould depend on which benefit....
                    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                    Comment


                      #11
                      Originally posted by DrunkenJedi View Post
                      Your reaching for nefarious reasons (any of which could be true) should also be mentioned alongside innocent/positive reasons if you want to be seen as fair.
                      I was writing from personal experience, I make no claims to be seen as fair or otherwise.
                      However, if one of my Tenants does win the lottery, I will certainly post to redress the imbalance.

                      Comment


                        #12
                        Originally posted by theartfullodger View Post
                        Not absolutely sure on that one - do all councils ask to see rent statements rather than just AST>?? Also, 'twould depend on which benefit....
                        The last I knew, benefits claimants have to declare what they have in all their bank accounts and savings and supply the last 6 months bank & savings accounts statements.
                        This would show a large amount of money going out (and potentially, a large amount that came in).
                        Its not guaranteed that this would raise questions towards the claimant but it might.

                        Comment


                          #13
                          Originally posted by boletus View Post
                          I make no claims to be seen as fair or otherwise
                          Its gotta be one or the other, even if its just your opinion of yourself.

                          Comment


                            #14
                            Originally posted by DrunkenJedi View Post
                            Its gotta be one or the other, even if its just your opinion of yourself.
                            If I gotta choose, then I am neither (even to myself).

                            to thine own self be true,
                            and it must follow, as the night the day,
                            Thou canst not then be false to any man

                            Polonius.(tic)

                            Comment


                              #15
                              Originally posted by boletus View Post
                              If I gotta choose, then I am neither (even to myself).
                              So you are neither fair nor unfair?
                              And yes, you have to choose, at some point in time.

                              Comment

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