Risks of paying rent in advance

jago25_98

I'm in a fortunate position where paying rent in advance could actually be more convienient for me and also help my bargaining position.

However, if I was to pay for 6 months or a year in advance, what happens if the landlord goes bust? How likely would I be to get a smooth treatment from a liquidator?

StuC75

Would plan for worse case, too many risks.. Why would they want paying so far up front.. What if the landlord gets repossessed..

Would have to be a heck of a saving, and then I would still wonder 'why?'..

G_M

Some landlords actually view with suspicion tenants who want to pay in advance.....

cannabis farmers, brothel owners etc do this to keep the LL at arms length.

If you pay up front and the LL gets reposed/goes bankrupt, AND does not have CTL/BTL mortgage, you could be evicted and lose your money.

jago25_98

G_M wrote: »

Some landlords actually view with suspicion tenants who want to pay in advance.....

cannabis farmers, brothel owners etc do this to keep the LL at arms length.

If you pay up front and the LL gets reposed/goes bankrupt, AND does not have CTL/BTL mortgage, you could be evicted and lose your money.

Thanks for the warning!
Sound like this is associated with shady behaviour and I could be viewed as such.
My main reason is that I think the economy is going to go bad at some point again. This way if I lose my job at least I'll have a roof over my head.

BTL=Buy to let
CTL=?

Is there a way to secure somewhere to live without being associated with ganja farmers?

theartfullodger

BTL = Buy2Let - mortgage permitting renting out.
CTL = Consent2Let ("normal" mortgage but lender allows borrower to rent out)

Even worse scenario: The person you think is landlord (or agent) isn't he's just got the keys (maybe he's the tenant and already in arrears..) - he takes your deposit & 6 months rent , you move in, you never see him again & place gets repossessed 2 weeks later. Even worse (!!) you pay up, turn up with your van to move in to find a huge row with 7 other people holding signed tenancies for the same place.. all scammed.

Check the person saying he is landlord owns the place (£3 with Land Registry)

There is no security renting from a private landlord as they can evict after 6 months for no reason at all (you can thank Thatcher for that..).

If you want security either buy somewhere or rent from council/housing-association on a "secure" tenancy... (yeah, tough getting that..)

Annisele

jago25_98 wrote: »

My main reason is that I think the economy is going to go bad at some point again. This way if I lose my job at least I'll have a roof over my head.

Can't you just keep the money in your bank account and not spend it? I don't understand why you think it's safer to give it to somebody else (a landlord) than keep it yourself.

jago25_98

Annisele wrote: »

Can't you just keep the money in your bank account and not spend it? I don't understand why you think it's safer to give it to somebody else (a landlord) than keep it yourself.

Because when you put your money in a bank account the money goes to pay off their debts.
This is why the UK approved emergency actions similar to what happened in Cyprus.

It's a very difficult thing to avoid without getting mixed up in all kinds of shady things. I wanted to outsource the problem to a landlord but it seems even this is associated with criminality!

If you have savings those savings are a;ways going to be at risk. If you lose your job and have any savings then you won't get much in the way in benefits until they are exhausted. Well, that's what I found in the past, might be different now.
Why not pay up front, reduce the amount you have to look after and help the landlord out.

Of course there's a limit on how much you want to risk this way, just one way to plan ahead making budgeting a bit less stressful.

I was hoping as a tenant you might get some rights along the lines of - if you can show that you have paid then this would be considered by bankruptcy courts and you won't be thrown out if both you and the landlord go bust, or something like that.

But if paying up front in effect only reduces your rights then it makes better sense to look for lower deposits & shorter contracts.

ognum

A friend of mine has let a house to a couple for 5 years and they always pay their ret six months in advance, they are not cannabis farmers or dodgy!

the house is six houses away from my friend and she let's it without a letting agent and her husband does most of the maintenance so is at the house as an when needed.

For the benefit of the rent in advance the actual rent is a few ponds less than similar houses in the area. In the 5 years they have paid her 60k and there have never been any issues, she does the maintenance as needed and they are happy so it does work.

DragonQ

I wouldn't pay in advance unless I had to. As it happens, I did have to, because my income wasn't high enough according to my letting agent, and getting a guarantor would've cost me even more in fees.