A bit of renting advice, please

Supermom

Hi hope someone can help as I feel my friends are being taken advantage of but not really having any renting knowledge I am unsure of what is actually fair.

My friends (married couple with kids) had a few financial problems five years ago and were advised to go bankrupt which they did and were discharged a year later.
They have not found that they need to sell their home and rent (work reasons). They have found a house through a letting agent and viewed it with the landlord to whom they explained their past financial problems. He happily said he'd be happy to take 5 months rent up front and that would be held as a deposit with the first months rent payable on the day of moving in and each month going forward from there.

Now two things worry me, firstly the letting agents still want their referencing fee (£300) to credit check them seems a bit pointless as they have been up front with regards to their history.
Secondly the deposit equal to 5 months rent is nearly £7000 and the landlord wants it in his account this week to secure the property however the moving in date would not be until the start of september. This just seems an awfully long time to hold somones money for, would it be safe? is this the done thing?

Lastly I've heard about being a guarantor for someone, what would this entail? I would be happy to do this if it would mean they didn't have to hand over such a large sum of money but I don't want to suggest it to them without knowing what it entails.

Many thanks

marliepanda

Does he want 5 months rent up front, or the equivalent as a damage deposit.

If he takes a deposit of more than 2 months rent it affords the tenants extra rights, (I dont know what they are but theres a reason most only take a month and a half for deposit...)

There is a difference between rent in advance and a damage deposit. They need to find out more clearly if it is a deposit, or simply rent in advance to the landlords mind is at rest...

I have a feeling he has asked for 6 months in advance (the 5 months that he keeps, and the one month they pay before moving in) and this deposit malarkey isnt anything to do with a deposit. But then surely he will want a damage deposit so where that comes into it I dont know...


Who proposed the September move in date? The landlord of your friends? if you friends, then yes they need to pay as they are 'delaying' the move in and the landlord could find other tenants. if it is him who needs the wait for the let, I would find such a large amount upfront to be a bit risky that many months before move in...

As for guarantoring, it depends on the contract you sign, but basically you are responsible for all rent arrears and damage done to the property if the tenants do not pay.

Supermom

No it's not rent in advance as they have been told they need to set up the S/O to start from the month following so I'm assuming it's a deposit.

I'm happy to be a guarantor but wondering what the criteria would be do I need to be earning x amount, home owner, amount of equity?

thanks

Supermom

The property is availble from september hence the september start

marliepanda

Someone else needs to answer properly but I am not entirely sure on the legalities of taking a 5 month deposit. All deposits have to be registered with a protection service, but 5 months is insane.

Honestly I'd walk away if this is the case.

I believe for guarantors you need to have sufficient income to not only meet your own obligations but the possible obligations of their monthly rent. I dont know what criteria that is based on, but I think someone posted on here recently where large capital wasnt taken into account, just the relatively 'low' self employed income figures.

Guarantoring is risky business anyway, and can ruin friendships/family etc. Most people advise against it. Not to be 'cruel' but these people have been declared bankrupt so clearly at some point in life did not have a good hold on their finances. I am sure they have moved on and learned from their mistakes but it certainly would not be something I would want to wade into financially.

Why can they not sell their home and buy? Are they in debt with their house also?

Supermom

No not in debt at all but are wanting to move back to OZ in a few years but waiting for the kids to finish school first. Do not want to risk the money they have in the british property market and will buy back home.

More than happy to be a guarantor for them, the reasons for bankruptcy are really complicated.

Supermom

any other input would be great
thanks

kazwookie

5 months up front, I'd be walking away well running fast, sounds very odd to me.

Find some where else.

Supermom

thanks will speak to them tomorrow and tell them about the 5 months not being legal?
As I said before I'm happy to act as guarantor, do they still have to be credit checked/referenced or just me? otherwise will they have to pay two lots of £300 seems a bit much or is this how it has to be done. Just feel the letting agents are a bit on the grab.

KateLiana27

In your position, I'd be happier being the guarantor if they DID pay 5 months rent upfront!

Really research what being a guarantor means, and what it could mean for you in this particular situation, before you sign. Other people on this forum (or a Google search) can, I'm sure, explain it better than I me - but being the guarantor for anyone previously bankrupt would keep me up at night. Sorry.

embob74

Many moons ago I worked for a tenant referencing company and if the tenant's finances were not considered sufficient to be recommended for the property we advised several months rent in advance thus lessening the LL's risk and ensuring the rental could still go ahead.
Of course it was never up to us what the LL decided and I was never aware of the legal implications of it but as most LL's wished to obtain tenant insurance the advance rent was required before the insurance company would consider issuing a policy.