Accepting Larger than Typical Deposit?

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    Accepting Larger than Typical Deposit?

    I'm in the process of letting out a property. A prospective elderly tenant is moving back to the UK from abroad. I've been told the prospective tenant has properties that are rented out in the UK (different county) as well as property abroad. I've also been offered a years rent up front (I won't be going down that route - although it is quite tempting!!).

    Prospective tenant needs to be near to adult children who will be helping with care needs and therefore feels the location of my property is ideal.

    Should I not be able to validate the income easily, I was thinking of accepting a guarantor and taking a bigger deposit (say 3 months rent). Normally I take a deposit equal to 6 weeks rent.

    If I did take a bigger deposit - would it/ could it cause me any problems?

    Many thanks
    Claymore

    #2
    The biggest pitfall I could see is if for any reason it was never held fully and correctly in a scheme I wouldn't like to receive the penalty X 3!!

    I'm sure you would be wise enough to ensure this didn't happen.

    I would also meet this lady before signing over the property. I'm always wary when rent is offered largely in advance incase of any cannabis farms

    Comment


      #3
      Good luck:

      Deposits of more than 2 months can give issues - see this...
      http://www.landlordlawblog.co.uk/201...ions-answered/
      &
      http://www.landlordzone.co.uk/forums...wo-months-rent

      Call me cynical but
      I've been told the prospective tenant has properties that are rented out in the UK (different county) as well as property abroad.
      - has at least three possible consequences...

      a) He knows landlord/tenant law better than you & may become a problem, using every trick in the book to not pay rent/not be evicted....
      b) He genuinely does own these properties: I which case as long as you know the addresses, you can confirm via. Land Registry (£3 a pop)
      https://www.gov.uk/search-property-i...-land-registry
      - that he owns them so you could put a charge on them if he doesn;t pay (court case for debt 1st).... but a guarantor as well, great...
      c) he mysteriously becomes shy on being asked the addresses of all these properties and turns out to be a wrong 'un...

      Someone coming back from outside UK is entitled to many fewer benefits for, I think, 6 months...

      I'd ask for a list of UK properties & addresses: If really suspicious, a copy of UK tax returns showing he's been declaring them as well...

      Anyway, good luck, hope it works out...
      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


        #4
        Originally posted by Claymore View Post
        I've also been offered a years rent up front (I won't be going down that route - although it is quite tempting!!
        Why not?

        If the potential tenant has a years worth of cash, why not ask for 10 months rent up front and 2 months deposit? Only accepting 2 months deposit reduces the risks of an 'enhanced tenancy' and 10 months rent is a lot of money?

        Comment


          #5
          Originally posted by theartfullodger View Post
          Good luck:

          Deposits of more than 2 months can give issues - see this...
          http://www.landlordlawblog.co.uk/201...ions-answered/
          &
          http://www.landlordzone.co.uk/forums...wo-months-rent
          Having read it all, I think that the article in the first link is mistaken.

          An informative discussion on this is: http://www.landlordzone.co.uk/forums...nting&p=263552

          Essentially I think that a deposit of more than 2 months has only one consequences: The tenant may freely assign the tenancy if the tenancy is periodic but not statutory periodic, which is a rare case.

          Comment


            #6
            Originally posted by GrumpyGit View Post
            Why not?

            If the potential tenant has a years worth of cash, why not ask for 10 months rent up front and 2 months deposit? Only accepting 2 months deposit reduces the risks of an 'enhanced tenancy' and 10 months rent is a lot of money?
            Why not. I don't know really. As it isn't a necessity to pay 12 months up front, it seems morally wrong to accept the offer I guess? I've had this sort of situation before and I've never taken the lump sum. Perhaps I should.......

            Comment


              #7
              It is reputedly the classic offer for someone planning to run cannabis farm/brothel: Nice, plausible story: Rent all paid, no reason to inspect......

              Call me cynical & suspicious...
              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


                #8
                6 or 12 months rent in advance increase the risk of the tenant turning out to be cannabis grower or something. However, many LL have not had problems with doing so, and for tenants who has money but don't pass normal criteria many find that's the only way they can rent somewhere.

                Another negative is depending on how the tenancy agreement is worded, you may end up with a SPT that has a period of 6 or 12 months.

                If their background checks out, personally I'll be okay with it, but others would disagree.
                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


                  #9
                  Cannabis grower, brothel - wouldn't last 30 seconds in this property. Every-time I open the front door, the elderly neighbour next door just appears! She knows everything and on top of that, her son who is a regular visitor is a Police Officer.

                  If I feel this person is suitable and all the checks are good - after all, she must have tax returns for the UK property, I might go for two months deposit but I will have the rent paid by monthly standing order. I like seeing money hit my account nice and regular :-)

                  Comment


                    #10
                    Originally posted by theartfullodger View Post
                    It is reputedly the classic offer for someone planning to run cannabis farm/brothel: Nice, plausible story: Rent all paid, no reason to inspect......

                    Call me cynical & suspicious...
                    I know where you are coming from. Ordinarily this sort of offer makes me start asking all sorts of questions.

                    A while back a guy in my local Kebab shop asked if I had any rental properties - he offered me 3 years rent up front - all he wanted in exchange for this was to be left alone - ie, no inspections. Whether I had any empty properties or not, anyone asking for no-inspections, wouldn't even get a viewing.

                    Comment


                      #11
                      Originally posted by theartfullodger View Post
                      It is reputedly the classic offer for someone planning to run cannabis farm/brothel: Nice, plausible story: Rent all paid, no reason to inspect......

                      Call me cynical & suspicious...
                      If someone was running a brothel in one one my properties, I'd be making daily inspections

                      Seriously, even if rent is all paid up in advance, I'd still want to inspect.
                      A while back a guy in my local Kebab shop asked if I had any rental properties - he offered me 3 years rent up front - all he wanted in exchange for this was to be left alone - ie, no inspections. Whether I had any empty properties or not, anyone asking for no-inspections, wouldn't even get a viewing.
                      I was once told that any business transaction that takes place mostly at night or involves more than 10% returns is highly likely to be illegal. I suspect that this also applies to any business that's conducted in a kebab shop (other than the purchasing of kebabs)

                      Comment

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