My new proposed tenants have not come back with good credit worthiness scores; but they have been honest with me and I can see why their situation would flag up the system.
They want me to feel secure and are obviously in need of the housing and I want to give them this chance to move up the ladder.
They have put forward a family member to out up 3 months rent in advance + the months rent as deposit.
What is the best way to legally hold rent in advance separately from deposit?
I use mydeposits.com to hold the deposit.
Does mydeposit.com make separate holding accounts for this?
How have others got around this please or have you just not gone forward with the rental.
Have you experience of taking this kind of insurance?
Thank you for reading this and your valued insights
Adele
You dont need to hold advance rent separately, its not a deposit, its your rent to do with as you please. It does mean the tenants wont pay any other rent for 3 months whilst the advanced rent is used. 3 months doesn’t really give you much protection for tenants that fail referencing. I would ask for a guarantor.
@Richard19 Thanks for your speedy response.
They suggested the way you’ve explained but
I’ve actually asked that it be a rolling amount so it continues to be 3 month’s in advance. (And they’ve accepted this)
I’ve not come across this situation before as only rented it out once before.
I’m grateful to your ideas on how best to set this up?
(I think the father who is putting up the extra rent is wanting to stay out of credit searches - but is willing to support from pension savings and act as a buffer. He has also agreed to pay the rent to me and have his daughter pay him back, but likely theyll both fail screening procedures )
Hope this makes sense.
I dont think it is possible to set it up they like this, irrespective of whether the tenants agree to it.
Rolling rent in advance would be considered a disguised deposit and mean you are breaching the 5 week cap. This is covered in tenant fees act 2019, and potential fines are £5k for first offence and £30k for subsequent offences so my advice would be to dont do it…