OpenRent Community

In advance rent

Hi I used the open rent service and was told to ask for three months in advance for a new renter.
tenant moved in on the 12th March (I am new to this renting out my own home) the tenant has just told me that according to his agreement he has nothing now to pay until 12th July! feeling an idiot for not checking I thought it meant he would always be three months in advance (ie pay again in a month) so he was always three months in advance in case he didn’t pay - feeling stupid! anyone else had this problem,

It would be an illegal deposit if you always held three months in advance.

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Student lets are taken in advance. They are paid termly. It is not illegal. Essentially you hold the money in trust.
The only difference is you take rent in advance at four month intervals.

It would be if you paid the first term up front and then had to pay the next term during the first term though, which is the equivalent of what Vivien is wanting to do. Because then your first term is effectively extra deposit.

I think Vivien misunderstood her contract.
Even if the tenant was paying three monthly it would be unlikely that it would be paid in the following month it would be at a three month interval (but that depends on how the contract was written).
Rent is Rent. Deposit is a deposit. Monies called a deposit are treated as such. Monies called rent can not be called a deposit and thus not treated as such.
Internationals pay 12 months upfront.
In September one month would be rent but the remaining 11 months are the Tenant’s money held in trust by the Landlord. In October the second month’s rent would become the Landlord’s and ten months are the Tenant’s money held in trust by the Landlord etc etc.

If you don’t know the rules you could end up losing thousands of pounds as letting property is a legal minefield. I would suggest you either get trained or use a more hands on managing agent.

@A_A I agree with that, but if, in October, you expect the tenant to pay again, and still held 11 months in advance, you would be at risk of that being a disguised deposit. Otherwise, lots of landlords would look to get around the 5 week deposit rules by taking rent in advance.

If you call something rent it is rent, it is not a deposit.
David Smith discussed this at a LanlordLaw Conference.

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I would question why a tenant would pay 13 months rent on a 12 month contract ( are their neurons synapsing?)
As a Tenant I would question why I was charged more than the contract and probably walk away ( are the Landlord’s neurons misfiring? Sounds like the Landlord is a scammer).
In the event of this ever happening the 13th month is held in trust. It is the first month of the periodic contract at the end of the 12 month AST. If the tenant stays it is rent for the 13 month. If the tenant departs with the appropriate notice the Landlord has to refund monies to the Tenant. That money was held in trust and never belonged to the Landlord so why would the Tenant agree to it in the first place?
Hence, I question the rational behind the question?
Is it likely to ever happen? Probably not ( most Tenant’s, like Viven’s, would question it )

I think that there is only a non-binding court case on the issue of taking a lump sum of rent in advance and then taking rent at the same time, but there remains a strong risk that it could be considered a deposit if tested again in court.

My thoughts exactly. I’m not sure I’d want to risk being the one to be taken to court to test it! I know there’s been on case on it already, but one small change to the facts could change the judgement.