Protecting prepaid rent - how can you do this ?

property.advert

Say you could obtain a significant discount on rent prepaid for 1, 2 or even 3 years, just what could you do to protect yourself ?

The landlord is in good standing with no mortgage and from every angle, no need ever to need one. However, is there anything which could be done to protect either the cash (if the property was sold) or the right to occupy (under the terms of the prepaid lease).

All I can think of it a charge on the property and I don't think that would be suitable here.

G_M

The only other possibility would be to give the money to a 3rd party (eg solicitor) to hold in a client account and drip feed to the landlord.

I've not known it happen, and you'd have to set it up so if either side defaulted on the contract the other would be compensated. Not easy, maybe not possible. And why bother to be honest?

Put the cash into a savings/investment product and pay normal rent.

property.advert

G_M wrote: »

The only other possibility would be to give the money to a 3rd party (eg solicitor) to hold in a client account and drip feed to the landlord.

I've not known it happen, and you'd have to set it up so if either side defaulted on the contract the other would be compensated. Not easy, maybe not possible. And why bother to be honest?

Put the cash into a savings/investment product and pay normal rent.

The why bother may present itself during negotiation. I just wanted to know whether this particular card was high value enough to play whilst at the same time offering some security. Perhaps not.

Can a lease be registered in the UK ? It can overseas I know and as such becomes attached to the deeds requiring any purchaser to fulfil the conditions of the lease. Different jurisdictions vary wildly I know.

I suppose something approaching 20% would make this prepayment an attractive option though.

G_M

Over 3 years a lease has to be witnessed and sworn as a Deed, so the legalities are a bit different. However the rights/obligations are the same assuming it is an Assured Shorthold Tenancy (AST). Over 7 years, it has to be registered at the Land Registry.

However, legalities aside, I think you will struggle to find a landlord willing to grant an unknown tenant a 3 year AST. One of the reasons the vast majority of ASTs (especially initial ones) are 6 months is that it gives the LL an opportunity to assess th tenant - and if necessary serve Notice at the end of the initial fixed term.

However you may be lucky and find a LL who wants the security of a long-term tenant. Whether they would discount the rent by that much........?

property.advert

I'm already in the property and have been for over 6 months. The landlord does indeed want a long lease and intimated such prior to the current AST. Now we know each other so to speak I've raised the question and just received a positive reply. I used a "nuclear" option to take the property off the market last year in the midst of a high number of bidders and prepaid 6 months with a second tranche just paid.

So we are now at negotiation stage.

You say that over 7 years it has to be registered with the Land Registry. What protection does that offer and can a lease of less than 7 years be registered voluntarily ?

jjlandlord

Imo, the main risk would be the landlord going bust.

property.advert wrote: »

to protect either the cash (if the property was sold)

If you had a fixed term and the property was sold, your tenancy would be transferred to the new owner, who could become your new landlord.
If you had prepaid it you would not need to pay anything, the new owner would presumably ask for the prepaid rent to be transferred to him pro-rata by the previous owner.

property.advert wrote: »

or the right to occupy (under the terms of the prepaid lease).

This would be independent of prepaid rent.
In any case, if you had prepaid rent and the landlord were to request surrender of tenancy (his only option during the fixed term unless you really go far re. breach of tenancy terms) if would be up to you to accept and he would have to refund the overpaid rent.