Advance rent advice

Hi everyone,

Could someone tell me if it’s ok to ask for rent in advance for the final months of the tenancy? I had a tenant tell me that rent in advance for the final month of the tenancy is deemed a security deposit, but of course it wouldn’t be as security deposits are returned. I’ve had a look at the advice on the shelter website and it says you can ask for advance rent for the start of the tenancy or the final months of tenancy.

Thanks in advance

It is not advised to ask for final months rent as it could be legally regarded as a deposit. The reason is that the last month(s) of the tenancy is usually an unknown date and any money taken for an unspecified period is defined as a security deposit. Its possible to do it if you specify in the tenancy agreement the actual month that the additional rent is to cover, (eg the last month of a fixed or initial term). If you do this and forget to use it for this month, but just allow it to roll-over, then you will be liable to a penalty claim from the tenant of 3x the amount as an unregistered deposit.

Thanks for your reply. I only rent to students so their contracts run in fixed terms of 11 or 12 months only. The contract clearly states which month’s rent have been paid and which ones will be outstanding. In this way, we would never forget what the advance payment is for. Do you think this would be acceptable? Also, do you know where I can access more information about this? I just want to be able to make sure I cover all bases.

Yes, its chapter 4 of the Housing Act 2004. There have also been some test cases that you’d need to search for.

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Thank you so much! that’s very helpful