Hi just curious as to some of the Landlords opinions on this
Apparently yesterday the Renters Rights bill was debated yesterday in parliament and they added in a new term to the bill which means Landlords and letting agents are to be banned from taking any more than 1 months rent in advanve from tenants
So anyone who offers 6 months rent upfront cant be considered
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Landlord can only take 1 month so they could be considered but only to pay 1 month upfront.
Sometimes the upfront payment is a nice to have from a landlords perspective but not essential while for some tenants it will mean they will be unable to pass the landlords risk assessment and therefore wouldn’t be offered a tenancy.
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Tessa write in her newsletter yesterday
If the landlord asks for it it is a prohibited payment
If the tenants offers it it’s ok
We just can’t ask for it
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It means those in the worst position will have even less chance of private renting. Only the best of the best will be picked.
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Is that the case, tenant will still be able to volunteer it?
In the new amendment to RRB Mathew Pennycook basically said in the commons that if a tenant offers rent in advance a landlord or letting agent will be prohibited from accepting it as it is seen as a form of rental bidding which would exclude a perfectly good tenant that could otherwise afford the monthly rent. They will also amend the Tenants Fee Ban to reflect this.
Landlords to be banned from asking for more than a month’s rent in advance from tenants under new law - and they’ll face £5,000 fines if they encourage ‘de facto bidding wars’ | Daily Mail Online https://search.app/tNssKcAj4MwJPE8x5
It’ll obviously affect those with poor credit rating, and international renters with no UK credit rating, but it’ll also affect other everyday renters like in this example:
I have just accepted a new tenant to move into one of my properties on 25th January. This would ordinarily mean that their next rent payment would be 25th February. However, the tenant is paid their wages on the ‘last Friday of each month’ so wants to pay her rent on 1st March. Therefore, I have accepted 1 month & 4 days rent in advance to benefit the tenant. This will not be possible under the new bill with this amendment, and instead the tenant might have to delay their move in date to align it with their wages pay date. This might not be an issue for my example of 4 days delay, but it could be 20+ days of delay that their are asking for and some tenants might find themselves missing out on properties, where the Landlord is unwilling to delay their move-in. Landlords will of course want a tenant to move in sooner, to minimise the void period.
So as in many aspects of the RRB, rules being brought in to ‘help’ tenants, will not always help tenants.
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Yes
So we just need to let the tenant know …
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Tessa’s newsletter
Prohibition of rent payments in advance of the tenancy
New clauses 13 and 14. Rent in advance of the tenancy start will be limited to one month’s worth of rent. This is to prevent tenants from being excluded from accommodation by demands for high levels of rent in advance. This is particularly unfair if the accommodation turns out to be in poor condition.
Clause 14 will amend Schedule 1 of the Tenant Fees Act 2019, making payments of rent in advance over the allowed amount a prohibited payment. This would make landlords and letting agents subject to Local Authority enforcement action and a fine of up to £5,000.
Clause 13 will amend the Housing Act 1988 to prohibit rent in advance other than save as allowed (one month before the tenancy starts and then on a regular basis according to the period of the tenancy). Note that this does not affect landlords requiring the payment of monthly rent during the tenancy being paid at the start of the relevant period rather than at the end (as is the [common law rule].
If tenants want to pay rent in advance, though, the amendment does not prohibit this. The prohibition is against landlords asking for it.
The amendment will mean that tenants cannot be required before the tenancy to pay more than:
- A holding deposit of 1 weeks worth of rent (which must be refunded or put towards the rent as agreed within the time limit)
- The deposit of up to 5 weeks worth of rent (or the fee for an alternative scheme should the tenant prefer this), and
- The first month’s rent (or four weeks’ worth if the rent is weekly).
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So if a tenant OFFERS many months in advance the landlord would be wise to get this clearly in writing to protect him/her from future action
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You will not be able to accept any contractual obligation to pay more than 1 month in advance. Putting something in writing might make it seem / sound contractual
What this means is the contract would be for monthly rent, but if the tenant paid additional months upfront off their own back then that is fine. Ie you cannot sign any tenancy requiring more than 1 month rent in advance… full stop.
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So what if later on it turns sour later on,and the tenant accuses the LANDLORD had asked for X amount upfront?
The contract would say otherwise Colin. You could reply to their overpayment in writing offering them a refund.
"If tenants want to pay rent in advance, though, the amendment does not prohibit this. The prohibition is against landlords asking for it. " So even if a tenant offers , best not to go along with it
Absolutely
You can word it in your favour.
Where there is law there is a loophole.
( tax consultants charge a lot of money to rich clients finding loopholes in legislation so they pay less tax [restructuring companies etc] )
The tenants that can will use it to their advantage .
Survival of the fittest.
This government haven’t been in five minutes and they’re reinventing the wheel.
Economy … Tanked
Pensions….we’ll work till we die
Winter fuel …. It’s cost them more to stop winter fuel allowances because increasing pension credit claims opened the door to additional benefits so it’s cost the government more !!!
NHS…. Paid the staff. Patients treated in corridors like it’s Gaza….
Social care on the back burner ( it was the same 30 years ago)
Education ( flooding state schools with students whose parents can’t afford VAT)
How many Labour MP’s does it take to ruin a country ….
When I was a child my friend’s father told me you need a Tory to clean up Labour’s mess ….
Now I know what he means ….
When are they going to stop interfering
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Why not you can get them to sign something to say the offered to cover yourself . It’s just like relatives get it in writing and you don’t have an HMO.
It’s the best you can do
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I believe the amendment prohibits landlords from receiving more than 1 month in advance, not just asking for it.
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We have always taken an odd amount up front so that payment period coincided with month end. So you just check all payments month end. Its a pity that will change.
To be honest they have made it worse not better
The government are claiming to look after tenants but in reality successive governments are hurting tenants. You cannot take a risk on tenants with weaker finances anymore, in the past we would see past a ccj, but not now
We are gradually selling up but this last budget has really hurt, 5% additional stamp duty up front and higher capital gains tax when you sell. Thats two years rental profit just gone as it depresses the house value. (4 flats)
I would not enter the market as a private landlord today.
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I think what it will mean is as follows;
Prior to the lease being entered into a Landlord is not allowed to ask for more than 1 month rent in advance. The Landlord & tenant will enter a rental contract that asks for only x1 monthly payment in advance, and the tenant will make that 1month payment at the start of the contract.
After the Lease has started, and the rental is in effect, if a tenant chooses to ‘pay early’, then this will be fine, but they will have signed a contract that does not require them to do so, so if an unscrupulous Landlord requested it, they can tell them No.