Section 21 notice period for six months advance rent.

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Section 21 notice period for six months advance rent.

    Hi all,

    Just a quick one, I am in the process of letting a property there is an option for T to pay six month rent in advance plus a deposit. If I do this does anyone know if it affects the length of a section 21(form 6A) notice period?
    Any advice I give is my opinion and experience, I am as you also learning.

    #2
    Provided the agreement is very clear that the tenant is paying six instances of the monthly rent in advance, it should make no difference.

    Otherwise, it might create a six month periodic tenancy, which might be tricky (although the changes in legislation that allow a s21(1) notice to be issued mean that the requirement to end notice at the end of a rental period is probably academic in most cases).
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      Thanks jpk


      In order to avoid the possibility of creating a 6 month tenancy can Issue a 7 month fix term stating the monthly rent of £X payable for 6 months in advance at the start date of the tenancy then followed by a monthly rent of £X payable on the first day of the 7th month and then on the 1st day of the month there after?
      Would that create monthly periodic tenancy after the fixed term?
      Any advice I give is my opinion and experience, I am as you also learning.

      Comment


        #4
        Personally I'd make the tenancy agreement monthly and agree the six months payment in advance outside the tenancy agreement.
        There are pretty good arguments both ways, but the rent due and the payment of the rent due are actually separate things, and splitting them keeps things simpler (in my personal view).

        It does mean that if tiy agree to an early surrender, you'd probably have to give them some of the rent paid back, but it does make the tax return simpler (you don't have a mix of cash and income accounting).

        Obviously the tenant might feel less comfortable with that, but normally the six month's in advance is for a reason, so the tenant isn't in the best negotiating position.
        Your suggestion works, although it might be simplest to use your normal wording - something like the rent of £500 is due monthly in advance on the 21st of each momth and then cover the advance payment separately "As a specially negotiated term, the Tenant has agreed to pay the first six monthly rental amounts on 21st November, and normal monthly payment will resume on 21st May 2017.

        I've just typed that out, there may be a better way of expressing it, but that's pretty much why I don't like putting it in the tenancy agreement.
        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

        Comment


          #5
          Originally posted by jpkeates View Post
          Personally I'd make the tenancy agreement monthly and agree the six months payment in advance outside the tenancy agreement.
          Thanks for your thoughts.

          I feel that this could be argued that the payment is a deposit although not stipulated in the TA.

          I am vaguely aware of a CoA decision that said rent in advance is just that and not a deposit despite the TA in that case being poorly worded. I just don't want to give the T a chance to try it and delay any eviction if it comes to that.

          If I go down the route of taking the 6 months upfront, I will probably go for the 7 month fixed term and use clear layman language in the TA. That way I can be sure that the periodic tenancy that arises after the fixed term is a monthly.
          Any advice I give is my opinion and experience, I am as you also learning.

          Comment


            #6
            The point about a deposit is a fair one.
            Normally the basic fact that no more rent is paid until month 7 and there's a documented agreement to pay six months in advance, even if it isn't in the tenancy agreement would be enough to show it's not a deposit.

            But you should do what you feel most comfortable with, as it's your peace of mind.

            It does sound a little like this isn't an ideal tenant (possibly reading a bit much into it...)
            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

            Comment


              #7
              Originally posted by sunnyp View Post
              I am vaguely aware of a CoA decision that said rent in advance is just that and not a deposit despite the TA in that case being poorly worded.
              In the case I have in mind the agreement wan't poorly worded at all, hence why the landlord succeeded.

              Comment


                #8
                Another way I was thinking of doing is Taking a 6 month deposit and having a standard TA, that way I have a buffer in the event of non payment of rent then a claim from Dps should be straight forward.

                T is an older applicant with a large saving from the sale of a property with a civil service job paying less than the 2.5 times rent ratio, clean references and credit.
                Any advice I give is my opinion and experience, I am as you also learning.

                Comment


                  #9


                  I wouldn't pay 6 month deposit on top of rent, but if you could find a tenant that's willing and you are sure you're not going to fall foul of tenancy deposit rules, then by all means go for 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.

                  Comment


                    #10
                    Taking more than two month's deposit isn't generally advised.
                    There's one of those "in theory it can be a bad thing" issues that doesn't ever seem to arise in real life, but is possible in the lab that could arise.

                    http://www.landlordlawblog.co.uk/201...o-months-rent/
                    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                    Comment


                      #11
                      Thanks again JPk

                      That link has certainly made me think again about taking a six month deposit, back to the drawing board with this one. Looking like a 7 month fixed term 6 months in advance and 2 month deposit is a safer bet. The T has the funds but its just that the income rent ratio is poor, references and Credit checks have come in clean.
                      Any advice I give is my opinion and experience, I am as you also learning.

                      Comment


                        #12
                        My son had the same situation as a prospective tenant, he has virtually no credit history (stupidly not having any credit cards or loans) and a good but irregular and uncertain income.
                        He paid six months in advance to overcome the landlord's concerns about the overall credit score.

                        The tenancy agreement he signed wasn't the best worded, but as it seemed actually to favour him, it worked out OK.
                        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                        Comment

                        Latest Activity

                        Collapse

                        Working...
                        X