OpenRent Community

New tenant offered to pay 6 months rent in advance

New tenant offered to pay 6 months rent in advance plus deposit, can I still charge monthly rent after month one or in 6 months time another 6 months in advance.
Many thanks Sarah

if they pay 6 months up front then you cannot ask for more after one month. !.. 6 months in advance is exactly that. … In 6 months they can pay monthly or 6 monthly depending on the contract you both sign

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Many thanks Colin great help

It is possible to have a rolling rent agreement where you have had an upfront payment of some part of future rent and then continue to collect rent every month. I’ve had this in the past where I have 2 or 3 months rent in advance at the beginning on the tenancy and then collect further rent from the second month so that the buffer is always maintained and then run out towards the end of the tenancy period. 6 months is a healthy buffer but clearly the protection is diminishing with each month passing. This can cause anxiety on both sides as the next 6 month payment becomes due (or you move to regular monthly payments). There is also a limit (due to money laundering regs I believe) of £12k if collecting through Openrent for how much rent you can hold in advance on any tenancy. According to Shelter website, there is no legal limit. There is a lot of flexibility here and ultimately it comes down to what you are comfortable with and what you can negotiate with your tenant. Best approach is to be open, honest and flexible about what you are asking for and why.

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It is only legally possible to take 6 months rent in advance (or other period) and collect rent from month 2 onwards if it is specified in the contract exactly which months the advance payment covers. It is not possible for example to just say this will cover the last 6 months without naming them as this will be an unknown period given that a periodic tenancy follows a fixed term. Anyone doing this would be regarded by deposit legislation as having taken a 6 month deposit which is then unprotected.