The initial payment date in the Openrent tenancy is ambiguous and contradictory and I am getting absolutely nowhere with the support team wo just cut and paste an answer and don’t actually answer the question.
Basic Terms - Initial Payment of Rent:
£1,700.00, one thousand seven hundred GBP payable in respect of one month’s rent and due following the signing of this agreement.
Tenancy Terms
2. The Initial Payment of Rent is payable upon signing this Agreement and must be paid in cleared funds no later than the Commencement Date. The Tenant shall have no right to occupy the Premises, until payment of the Deposit and the Initial Payment of Rent has been made in full.
From our discussions it seems Openrent’s intention is that the initial payment can be made at any point from signing up until the commencement date. However, the clause in the Basic terms section say “due following the signing of this agreement” which is ambiguous as any date after signing is essentially possible, unless it’s interpreted to mean immediately after signing, but it doesn’t actually say that.
In the tenancy terms, it then goes onto say “payable upon signing this Agreement” which means at the time of signing, but in the same sentence then goes on to say “and must be paid in cleared funds no later than the Commencement Date” which directly contradicts the earlier half of the sentence.
Personally, I think there should be an option to either select - ‘Upon signing’, or ‘on a specified date’ or ‘by the commencement date’, but either way, the current language is ambiguous and contradictory and shouldn’t be used in a legal agreement.
I think not addressing issues like this is unacceptable if they are brought to the attention of Openrent.
Erm but you can add a specific custom clause yourself. It’s totally straightforward.
I happen to agree that specifying when initial payment to be made more exactly would be good for both LL and tenant to avoid any confusion. The OR draft equally says little on ventilation and nothing on what happens if a tenant leaves possessions behind after tenancy. But OR won’t change their new APT template 2 months after use unless lots of LLs complain..
We all have different things we’d like to have in the standard OR template - there is a lot more detail in other APTs. For example the original gov AST allowed you to not only specify a date but also whether payment would be cash, cheque, standing order. (Source: GOV.UKNo longer available - GOV.UK )
Some tenancies have gardens or pets where extra clauses warranted etc etc
Thanks, but I think you missed the main point. The idea about having options is just a side point. My main issue is how badly their template currently is for those clauses. Having ambiguity and contradiction is poor, but not answering that issue or passing it on to legal is terrible.
As an aside - I’ve only used theirs this time because of the RRA. Seems I won’t be using it again!
The clue’s in the name. It’s a “template”. Feel free to edit it as you see fit. If you want the T paying rent on a specific date, then say that. The only thing you can’t do now under RRA is have them pay before they sign.
I’m not sure that’s true if you use the Rent Now service? Sure, they have custom clauses, but the bits I’m talking about are their standard. And it’s still not the issue. A company shouldn’t draw up legal contracts that are senseless. They should fix them.
I’ve read thousands of very complex derivatives contracts in my time and details matter. Getting dates wrong with flaky language is inexcusable. They should be willing to fix incorrect language when it’s pointed out to them.
For the initial month’s rent [unlike all other months] it can be paid between the signing of the contract and the move in date [this is slightly called confusingly the ‘pre-tenancy period’ in places] and the contract can specify a date when it is paid
"Pre-tenancy period
This is the period of time from when the contract is signed until the start date of the tenancy.
If a tenant will be paying rent monthly, landlords or agents can ask them to pay their first month’s rent at any time during the pre-tenancy period. "
Putting in an actual date for the initial payment sets the expectations of paying ontime from the start and avoids a game of chicken on move in date when LL could be waiting up to midnight to hand over keys without being in breach, in return for tenant paying so as not to be in breach. By specifying an earlier date, the LL knows up front whether the tenants are going to be a problem paying and can decide whether to hand over keys or not. If they dont, the jury is out whether a claim for damages from tenant would work when there is a counter claim from the LL for breach on part of the tenant. We dont know till a case happens.
In practice this scenario is a variation of what could have happened before RRA, when somebody could pay a months rent move in and pay nothing from month 2 onwards, after 2 months serving notice for eviction for arrears could begin. Now they can move in without paying anything and after 3 months [so at same time point] serving notice for eviction can begin. It just makes it easier for those tenants who have no £ at all to start a tenancy and not pay. It increases the reason for getting RGI.
well if you’re deciding to use Rent Now then I’ll leave you to your fate. I’ve nothing good to say about it. The example you’ve given us is just one more reason to add to the very long list I’ve informally kept over the years since that one time I used it and regretted it.
And someone who has the experience of contracts that you describe should find it relatively easy to fix incorrect language when you find it. Certainly easier and quicker than waiting for OR to do it.
whether you use the rent now or not doesnt matter. the contract is what you and tenant sign up to. So you can have a custom clause saying pay it by a specific date or within 5 days of the contract signed or whatever, just like you can have a non-standard clause about regularly mowing the lawn, or not making loud noises after 10pm or whatever.
In any case as soon as contract is signed [ie using rent now] open rent will start chasing/encouraging tenant to pay both the balance of 1st month [they have already paid holding deposit] and any security deposit. They just dont work to a specific date.
Openrent will keep chasing for the balance of 1st month rent up to and past the move in date. As drafted the standard OR agreement indicates it should be paid by the commencement date of the tenancy, which is totally clear. The clauses encouraging payment as soon as due [ie straight after contract signed] are encouraging but as you indicate, not easy to enforce [unlike say a firms’ tirms of business saying exactly how long there is before penalties apply]
I hope OR will be like nrla and others and will review in light of comments received - but it’s unrealistic to expect them to change their template based on a single complaint…
- they are also in breach of contract too if they dont pay [as the contract says pay by commencement date] so they are legally in the wrong. They can sue you for damages and you can counter sue. They have misled you about paying the rent on time in their application. Just like if you advertise as furnished and provide unfurnished they can sue you as not as advertised. Until somebody tries this in an actual case we dont know what a judge will say, irrespective of any speculation or masterclass.
And that’s why it’s important to have a clause saying 'pay balance of initial payment/1st month’s rent by date X, which is specified as say a week after contract is signed. Then you are aware very early on if there is likely to be an issue, and can start taking legal advice or action and decide if you want to take the [legal] risk of not handing over the keys to anybody who is brazen/cheeky enough to demand keys without having paid more than a week’s holding deposit.
A lot of LLs would take that risk rather than handing over their property to tenants who have shown no intent of paying. After all they have to be 3 months in arrears, you then serve notice giving 4 weeks and it is then taking on average 8 months from application for possession through to eviction. So letting them in without paying is risking a year or more of rent and who knows how much damage to the property [as they wont have paid a deposit either]. If the tenants claim for damages, what actually can they claim for? Perhaps temporary accommodation for a bit while they find somewhere else - but they are expected to minimise such costs of any damage, so the moment they dont pay the initial rent on time, they need to be searching for somewhere else if they are then later going to claim damages.
Under the previous legislation I would agree and did not hand over keys but I also never signed a contract until they were about to move in and all Monies were on the table , literally.
Under this legislation you have the risk of heavy civil penalties . The LA will not see your version of events . They don’t want homelessness on their doorstep.
I’m not sure how long you’ve been a landlord but not handing over keys today will cost you heavily
I would advise anyone to take legal instruction rather than protect their standpoint . Ignorance is not a defence .
David Smith and Tessa Shepperson would not agree with you .
The contract has started and their is a tenancy in place
Not handing over keys since May 1st is a very risky and costly thing to do . It’s illegal …
I’m not saying it’s not without any risk - and the govt position was [as I understand it] let the tenants in and evict them after 3 months of non-payment. Although a theoretical risk /example much discussed on fora, I doubt it will be a common scenario [I doubt many cases happened previously where people paid 1 month rent and then non-paid for 2 months then were evicted - which is nearest equiv]
Civil penalties can also be appealed / challenged [both the decision and the amount] - in a case where a tenant brazenly refused to pay rent due even for 1st month, will a council try and apply the max penalty? The councils do have guidance around this. Think this penatly would more obviously be the max where eg a rogue LL on multiple occasions takes holding deposits or even the full rent, and then doesnt hand over keys, which is a rather different scenario.
Anyway the risks of non-payment on move in day are exactly why it’s sensible both to get RGI, to screen for previous regular payments and affordability, and to insist of payment of the initial rent well before move in date.
Ah, it was just an experiment because I hadn’t done any work on my template to update for the RRA and I happened to need it quickly at the end of May. I won’t use it again.
I don’t think that’s right at all. The RRA implementation states that you need the summary at the start of the agreement. I don’t think it would work at all having their auto generated line saying one thing in the basic summary, something different in the detailed terms and then a custom clause at the end saying something else that I wanted to which overrides the earlier ambiguous and contradictory clauses. That just wouldn’t fly and wouldn’t be enforceable.
Anyway, it still doesn’t change the fact that I’m more shocked that something so basic doesn’t get fixed when pointed out to them. It’s a fundamental term and should be worded properly, end of. That’s what I’m more bothered about.
The fact a large company doesn’t immediately change their template after one complaint is not really either surprising or shocking - the vagueness on payment of initial rent is an issue prior to the APT template- it existed in the previous AST one - so irrespective of your views on how ‘basic’ it is, if it was genuinely causing a problem LLs would have been complaining about it and OR would have changed when they updated and produced their APT template released on 1 may.
Surprised about OR customer service not responding to LLs raising legal issues - try reading this thread where OR customer service refuse to change deposit name to a new LL (for multiple occurrences of LLs needing this) when property ownership changes and OR customer service say a new tenancy needed instead even tho there is no way to force tenants to agree to that Change of Landlord when tenants are stil in property . That’s equally shocking (but again perhaps a rare enough event and one where with tenants who want to stay they agree to a new tenancy in practice)
Firms don’t listen to customers complaining about the contracts they use and immediately change them. Shock (not).