How to take 6 months advanced rent

8 04 2010

If you want to take 6 months rent in advance, how do you do it? This is actually a fairly common thing to happen, so today I thought I would go over a few stumbling points.

There are various reasons why a landlord might request rent in advance, if for instance a tenant cannot provide a guarantor and has not passed the credit checks.

This is a perfectly reasonable solution if the tenant is willing, but you do need to be careful about how you go about doing this, since there are some legal subtleties to be aware of.

Often a letting agent might just hold this 6 month advance in a client account and pay it to the landlord each month. This is a dangerous thing to do because it could be seen as a deposit, rather than an advance, in which case the letting agent would be required to put the money in the deposit scheme.

This would obviously make paying the rent a nightmare, since the tenant would have to pay the rent, and presumably then be refunded their deposit bit by bit.

So when take rent in advance in this way you need to make sure you state in the tenancy agreement that this sum is an advance for the first 6 months rent. The letting agent can then forward the full amount to the landlord, or pay it monthly, a point which can be negotiated between the two. Most letting agents will however wish to keep some portion of this money back in case it is needed for repairs to the house, which the landlord will obviously have to pay for.

One final warning though. If you do take such an advance, make sure you don’t let the tenancy go periodic, as it will have a 6 month period, and you could therefore have to give up to 12 months notice if you wish to evict the tenant for whatever reason.




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