House Rent Payment in Cash

Pixie5740

alienuk wrote: »

Thanks for your thoughts, Just to let you all know he has been a great landlord and I've been living in his property for more than 2 years. He owns all the flats in the property and one of tenant who has vacated recently used to pay in cash. So there goes the explanation as to why he is asking me to pay in cash.
All I want to know how do i cover myself so that 6 months down the line he wouldn't say that i'm a rent defaulter.

Get a receipt every time you make a payment. You could even get a rent book.

HouseBuyer77

I paid rent in cash several years ago as a student. It was always a pain due to the withdrawal limits in cash machines you had to remember to do a couple of days worth of withdrawals (sharing the rent with 3 others so it was ~£300 if I remember correctly), then you had the worry of handling large amounts of cash (would you loose it, would it get stolen?).

Landlady came round to the property to collect at a regular time and always supplied a signed receipt.

No idea if she was paying tax. Come to think of it may just have been an excuse to take a look at the property once a month. She eventually decided she no longer wanted us living there as we were too messy (front room was indeed untidy, there may have been cobwebs in high corners she was annoyed we hadn't cleaned up, left the place spotless and undamaged. I think she had trouble with the concept that it wasn't her home....)

danslenoir

Personally, I would not facilitate his obvious attempt to defraud the public purse, even if I stood to gain financially.

gingercordial

Personally I would prefer not to pay cash because in recent moves I have been asked to show bank statements featuring rent payments when being credit checked by letting agencies.

Also it sounds like a massive hassle, as others have said, in terms of withdrawing the cash and arranging to meet the landlord. It would take me many days to be able to draw out my whole rent payment in cash as it's so far above my ATM limit, so I'd have to be able to go into a branch to do it, which is difficult what with being at work. It would be a security risk in taking that much cash home and keeping it until I could meet the landlord.

On top of that this smacks of an attempt at tax evasion and as a professional tax adviser I couldn't be part of that, and really neither should anyone else.

TBagpuss

I personally would not be comfortable having to get large amounts of cash out each month and, as others have said, there is also the issue of having to arrange to be present to pay it, and the inconvenience if the due date falls on a day you plan to be away.

The land lord may be trying to avoid tax, he may prefer to deal in cash (some people do, without being dishonest!) or he may be being honest with the tax man but less so with someone else (for instnace, if he is in the process of divorcing and hoping to hide assets from his spouse)

Provided you insist on proper signed receipts or rent book each month you should not be disadvantaged (and you can produce the rent book in the same way as you could bank statements, if you are being credit checked by another landlord in future) so it is really a question of whether the hassle of paying cash and having the landlord come round every month is worth it to you personally, for the slightly lower rent.

Marvel1

1. You have to withdraw the cash, and most places using an ARM, have a daily limit, so have to it at least twice.
2.It's getting the money to them, even if they collect it, you have to be there.

Too much hassle for me.

G_M

* As long as you get a signed & dated receipt, which clearly states it is rent for xyz property, you will be fine.

* as others said, it's a pain getting the cash out - but that's up to you.

* likewise getting the cash to the LL is a pain - your choice

* yes it's almost certainly a tax fiddle. You'd have the option later to report to HMRC if you wanted to be a good citizen (or hold leverage).

Prothet_of_Doom

As a Landlord myself, I can only think of 2 reasons why someone wants to deal in cash, when Online banking is so simple.

Neither of them have morality and legality built into it.

I'm guessing it's a tax fiddle.

I dare you to : Ask him to prove he has the right to rent out the property, prove he has a BTL mortgage and not a residential mortgage, prove he is who he says he is, and that he's not actually subletting the property and is now about to stop payments to the legitimate landlord.

I assume you are on a periodic tenancy. I'd probably decline both rent increase and paying by Cash, continue to pay by BACS and tell him to issue an S21 if he doesn't like that, and ask him how long a void is he expecting between you being evicted through the courts, (and only once the bailiffs come to change the locks) , and the next tenant being referenced and moving in? Ask him if he thinks every tenant will pay on time like you?

I say this because on our business plan for our rental, we would make only a small return on our investment, if we have any significant voids, and I'd rather NOT force the current paying tenants out by increasing the rent by much if it meant 4 weeks with no tenant, and a risk of a new tenant who fails to pay on time.