Renters: think twice about annual payments

macaque_2

Many private tenants decide to pay thousands of pounds to their landlords in order to get a discount, but there is a danger that even though the landlord has had the money he or she could fall behind with

http://www.thriftyscot.co.uk/122008/tenants-given-warning-over-paying-rent-annually.html

I would never pay rent yearly and if a landlord suggested this, I would immediately be suspicious.

Gorgeous_George

I'd only be able to offer one week free for a year's rent up front. My tenant may as well keep the cash in her bank.

A LL that needs the cash would be best avoided.

GG

ruggedtoast

I might consider it if the landlord could provide me with a full credit check, references, bank statements, a guarantor, and a contract legally binding them into providing housing for the full period.

Its what tenants have to do.

Gingernutmeg

It seems to be increasingly common for landlords to 'demand' up to six months rent in advance at the start of a tenancy - when we moved, this last summer, at least three of the properties we viewed had this stipulation in place. To me, as a tenant, it seems like absolute insanity for a landlord to demand that much money upfront and not to have to give me any guarantee they're financially solvent, or that they'll still be in a position to be the owner of said property in six months time. We asked the letting agents handling these properties for some kind of reference from/about the landlord, if they wanted that much money off us in advance, and they looked at us like we were insane and said that us asking any questions about the landlord was 'unreasonable', and they suggested that we'd be 'difficult' tenants - I'm not lol, but like ruggedtoast, I do think there's a big disparity between the information that I have to provide as a tenant to my landlord and what they have to tell me. There's nothing that'll make me walk away from a property faster than a landlord who 'needs' a large amount of cash upfront. It completely suggests to me that they're in financial difficulty and there's no way I'd rent a property from anyone who even breathes a hint of that suggestion.

furndire

Are they asking for that much up front instead of a deposit - trying to get out of the deposit being sat in an account they can't use. If so, what they are doing is now illegal.

Gingernutmeg

furndire wrote: »

Are they asking for that much up front instead of a deposit - trying to get out of the deposit being sat in an account they can't use. If so, what they are doing is now illegal.

I can only speak for myself but no, that wasn't the case for us. They were asking for a deposit, plus six months rent in advance - a lot of money when there's no guarantee that it's 'safe' or that it'll even rent you a home for that period. I also feel that making a tenant pay rent in advance can be a way of 'holding the tenant to ransom' should there be problems. A while back, when OH and I were recent graduates and didn't have the work history, we found ourselves in the position of having to pay rent in advance in order to get somewhere to live. We paid up six months in advance (over 5k) and it was a nightmare. The property we moved into had a lot of problems and we were basically ignored by the agency and the landlord. The attitude was 'we've got your money, there's nothing you can do to make us sort these problems out, so stuff you'. That's the main reason (beyond the security issues) that I'd NEVER do that again - although I'd never withold rent, them having your cash in advance does put you as a tenant in a much weaker position.

Gorgeous_George

Sometimes, when a tenant has a poor credit rating, it might be necessary to ask for 6 month's upfront and for rent to be paid in advance. A LL's insurance comapny might make this a condition of the policy if rent is to be guaranteed.

For me, if an insurer and/or credit reference agency made such a recommendation, I'd steer clear of the tenants.

I think that asking for more than a couple of months rent in advance is unreasonable. I do not see rent in advance as a suitable alternative to a properly protected deposit and I doubt that a Court would see it as reasonable either.

GG

bo_drinker

Surely someone could have the best references and credit rating in the world today and it could all go t1ts up in 6 months when they lose jobs etc etc. I know someone who rented a place to a couple who had good refs etc the x months down the line fell behind with payments and trashed the place, even though they had "good" jobs etc etc. Obviously relying on credit cards etc then it all came to a stop.

furndire

6 mths + deposit is a hell of a lot to fork out. Landlords sound as though they are hedging their bets on people coming out of work in the next year. If they are on hefty morgages, they are trying to cover them.

bo_drinker wrote: »

Surely someone could have the best references and credit rating in the world today and it could all go t1ts up in 6 months when they lose jobs etc etc. I know someone who rented a place to a couple who had good refs etc the x months down the line fell behind with payments and trashed the place, even though they had "good" jobs etc etc. Obviously relying on credit cards etc then it all came to a stop.

I reckon this will be happening more into the new year - as people lose their jobs - apply for housing benefit - wait 6/8 weeks (and that's being optomistic) to be then told that they will get nowhere near the amount that they are paying in rent, as the limit for rent in the local area is restricted to what "the local average" is.


One problem with Buy To Let Mortgages is that none of them allow tenants who are on DoHSS, and various other restrictions.

Georgeous George - The Courts would come down on the LL like a ton of bricks.

silvercar

One problem with Buy To Let Mortgages is that none of them allow tenants who are on DoHSS, and various other restrictions.

BTL mortgages allow tenants in receipt of HB, rental insurance companies won't allow it. So if the landlord wanted to insure the rent, they couldn't accept HB tenants.

Bit of a grey area as a landlord wouldn't necessarily know that the tenant was in receipt of benefit if they sorted the claim themselves and paid rent on the due date.