2 Months' Rent Up Front - No Bond

schminky_pinky

Hi,

I'm on the verge of signing a rental agreement with an agent (Morfitt Shaw, based in Leeds, could find no reviews of any kind online), but they've just told me that I'll be expected to pay 2 months' rent up front and no bond. I was expecting an arrangement that utilised the deposit scheme so this was surprising, but I can't decide if it's a bad thing. Any ideas? An internet search seems to suggest it's risky for the landlord, although I don't fully understand why. Am I in a position of weakness come the end of the tenancy?

Cheers in advance.

Chris

BitterAndTwisted

No, quite the opposite. At the end of your tenancy, if there is dirt or damage to the property, the landlord will have none of your funds to claim against as compensation. They will have to take you to court instead.

Have you asked the agent why the landlord is not expecting you to pay a deposit?

G_M

Just make sure
1) you get a receipt and it states clearly that it is for 2 months rent
2) that the tenancy agreement states clearly that rent is payable monthly, 2 months in advance
3) that you remember NOT to pay rent in your final month as you will have already paid it!

It's a way for the LL to avoid the deposit scheme, but puts the LL at risk since he has no reserve from you if you leave damage, rent owing etc. Mad.

RAS

schminky_pinky wrote: »

Hi,

I'm on the verge of signing a rental agreement with an agent (Morfitt Shaw, based in Leeds, could find no reviews of any kind online)

have not had any dealing with them but see their signs around. Seem to be rather old fashioned and quaint but have never heard adverse comments (unlike some).

jjlandlord

G_M wrote: »

3) that you remember NOT to pay rent in your final month as you will have already paid it!

Or, if it is not specified for what rent period these 2 months in advance are allocated, OP can just move in and not pay any further rent during the first 2 months of the tenancy.

princeofpounds

If it's just 2 month's rent in advance, fine. If it's 2 month's rent in advance at all points, even when you have less than two months to go, and the excess will be returned to you, then that it a deposit and the courts are not that stupid in missing LLs trying to 'hide' deposits in that manner.

schminky_pinky

This is all very positive (and speedy) feedback, thanks to you all. It sounds like all is basically above-board, which is great because we're really keen on the property! I just didn't want to be blinded by eagerness.

G_M wrote: »

Just make sure
1) you get a receipt and it states clearly that it is for 2 months rent
2) that the tenancy agreement states clearly that rent is payable monthly, 2 months in advance
3) that you remember NOT to pay rent in your final month as you will have already paid it!

It's a way for the LL to avoid the deposit scheme, but puts the LL at risk since he has no reserve from you if you leave damage, rent owing etc. Mad.

I'll be sure to do all three, thanks!

RAS wrote: »

have not had any dealing with them but see their signs around. Seem to be rather old fashioned and quaint but have never heard adverse comments (unlike some).

That's the vibe I got too. The staff seem friendly and open so I'm hoping I'm not being too naive!

Thanks again all.

Chris

schminky_pinky

princeofpounds wrote: »

If it's just 2 month's rent in advance, fine. If it's 2 month's rent in advance at all points, even when you have less than two months to go, and the excess will be returned to you, then that it a deposit and the courts are not that stupid in missing LLs trying to 'hide' deposits in that manner.

I'm sorry, I'm probably being thick, but I'm not sure what you mean. What is 'at all points'? Are you saying I'm at risk in some way, or that the landlord is trying to make an extra few bob and I shouldn't worry for myself?

somethingcorporate

Well they mean that if you are 2 months in advance you shouldn't have to pay for the last 2 months (as you are paying upfront). If they intend to take the last two months regardless then this is in effect a deposit.

Whether they are trying to circumvent the system or not is anyone's guess!

theartfullodger

I think it is a month's rent & 1month's rent as deposit.

See the law on the matter...
http://www.legislation.gov.uk/ukpga/2004/34/part/6/chapter/4
Section 213 (subsections 7 & 8)

(7)No person may, in connection with a shorthold tenancy, require a deposit which consists of property other than money.
(8)In subsection (7) “deposit” means a transfer of property intended to be held (by the landlord or otherwise) as security for—
(a)the performance of any obligations of the tenant, or
(b)the discharge of any liability of his,
arising under or in connection with the tenancy.

So, Agent/landlord can call it what he likes, but as far as the law is concerned, IMHO, the "2nd" month;s rent is a deposit.

See support for my view here...
http://landlordlaw.blogspot.com/2009/02/advance-rent-deposit.html

Others may hold differing views...

Cheers!

FireWyrm

Hmmm...if you're right Artful, then the OP is in a terrible position because what is likely to happen is that the 'deposit' won't be protected, they habpve it up front and so you can't ever get it back. The OP could still end up paying 'rent' even though the deposit is called something else and completely unable to get it back. An unscrupulous LL might decide that it's 'deposit' instead of rent at the end of the term and simply keep it.