2 Months rent held on account?

AliC999

Hello 

If anyone has experience with estate agents and lettings, I would be grateful for your advice. 

We paid 12 months upfront for our rent, as the landlord did not agree that the dividends we took from our family business could be used as income. We signed a 2-year contract, with a break at 12-months. The first year ends April 2024.  

The contract said we needed to then pay monthly from February 2024 (not April 2024). When I queried this we were told that the letting agent keep 2 months' rent on account. I have made the payment and will do March as well. 

But I am nervous that the letting agent will be holding a significant amount of money on their account. What if they go under? It is not protected like the deposit that we also paid. 

My question is, is this common practise for such a scenario? What happens if I don't pay money in April and May 2024, which would just then bring the rent due up to date and not in arrears? I presume if we gave two months' notice we would not pay the last two months anyway? Ummm....help!

Thank you

DE_612183

If you have paid a deposit have you asked them what the 2 months rent is for?

AskAsk

DE_612183 said:

If you have paid a deposit have you asked them what the 2 months rent is for?

in case the OP doesn't pay the rent.  it can be done if the tenants can't demonstrate that they have enough income.

OP - you had signed the contract knowing that you would have to give the agent 2 months holding rent so until your contract ends, you would have to keep to the terms of the contract.

35har1old

AliC999 said:

Hello 

If anyone has experience with estate agents and lettings, I would be grateful for your advice. 

We paid 12 months upfront for our rent, as the landlord did not agree that the dividends we took from our family business could be used as income. We signed a 2-year contract, with a break at 12-months. The first year ends April 2024.  

The contract said we needed to then pay monthly from February 2024 (not April 2024). When I queried this we were told that the letting agent keep 2 months' rent on account. I have made the payment and will do March as well. 

But I am nervous that the letting agent will be holding a significant amount of money on their account. What if they go under? It is not protected like the deposit that we also paid. 

My question is, is this common practise for such a scenario? What happens if I don't pay money in April and May 2024, which would just then bring the rent due up to date and not in arrears? I presume if we gave two months' notice we would not pay the last two months anyway? Ummm....help!

Thank you

Is it held in a tenancy deposit scheme?
5 weeks rent is the maximum allowed if rent is below £50000 6 weeks above
There have 30 days to give you details of the scheme 

theartfullodger

Sounds like not very bright landlord (no minimum brain required to be a landlord) has broken deposit legislation.  As such any s21 wil be invalid and tenant entitled to sue for up to 3*what-landlord-is-holding-as-deposit (at least 2 months-rent so van sure for up to 6-months...).

Best wishes to all.

propertyrental

35har1old said:

AliC999 said:

Hello 

If anyone has experience with estate agents and lettings, I would be grateful for your advice. 

We paid 12 months upfront for our rent, as the landlord did not agree that the dividends we took from our family business could be used as income. We signed a 2-year contract, with a break at 12-months. The first year ends April 2024.  

The contract said we needed to then pay monthly from February 2024 (not April 2024). When I queried this we were told that the letting agent keep 2 months' rent on account. I have made the payment and will do March as well. 

But I am nervous that the letting agent will be holding a significant amount of money on their account. What if they go under? It is not protected like the deposit that we also paid. 

My question is, is this common practise for such a scenario? What happens if I don't pay money in April and May 2024, which would just then bring the rent due up to date and not in arrears? I presume if we gave two months' notice we would not pay the last two months anyway? Ummm....help!

Thank you

Is it held in a tenancy deposit scheme?
5 weeks rent is the maximum allowed if rent is below £50000 6 weeks above
There have 30 days to give you details of the scheme 

That applies to a deposit. This is rent payable in advance.

theartfullodger

propertyrental said:

35har1old said:

AliC999 said:

Hello 

If anyone has experience with estate agents and lettings, I would be grateful for your advice. 

We paid 12 months upfront for our rent, as the landlord did not agree that the dividends we took from our family business could be used as income. We signed a 2-year contract, with a break at 12-months. The first year ends April 2024.  

The contract said we needed to then pay monthly from February 2024 (not April 2024). When I queried this we were told that the letting agent keep 2 months' rent on account. I have made the payment and will do March as well. 

But I am nervous that the letting agent will be holding a significant amount of money on their account. What if they go under? It is not protected like the deposit that we also paid. 

My question is, is this common practise for such a scenario? What happens if I don't pay money in April and May 2024, which would just then bring the rent due up to date and not in arrears? I presume if we gave two months' notice we would not pay the last two months anyway? Ummm....help!

Thank you

Is it held in a tenancy deposit scheme?
5 weeks rent is the maximum allowed if rent is below £50000 6 weeks above
There have 30 days to give you details of the scheme 

That applies to a deposit. This is rent payable in advance.

What you claim to be "rent in advance" may still be deposit.  See Housing Act 2004 Section 212(8)
https://www.legislation.gov.uk/ukpga/2004/34/section/212

""" (8) In this Chapter—

........

“tenancy deposit”, in relation to a shorthold tenancy, means any money 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. """"


- to my mind "Rent payable in advance" meets that definition...

Best wishes to all

RHemmings

It appears that it depends on the form of the payment. In Piggot vs. Slaven (2009) it was found that asking for pre-payment of two months rent to count as the final two months' rental payments was a deposit and should be protected. However, in Johnson vs. Old (2013), a pre-payment of six months rent for a six month rental was not. So: depends. 

To my eyes this situation looks more like Piggot vs. Slaven, but the opinion of some random person on a forum is meaningless. It only matters what a judge will rule. 

Mr.Generous

theartfullodger said:

propertyrental said:

35har1old said:

AliC999 said:

Hello 

If anyone has experience with estate agents and lettings, I would be grateful for your advice. 

We paid 12 months upfront for our rent, as the landlord did not agree that the dividends we took from our family business could be used as income. We signed a 2-year contract, with a break at 12-months. The first year ends April 2024.  

The contract said we needed to then pay monthly from February 2024 (not April 2024). When I queried this we were told that the letting agent keep 2 months' rent on account. I have made the payment and will do March as well. 

But I am nervous that the letting agent will be holding a significant amount of money on their account. What if they go under? It is not protected like the deposit that we also paid. 

My question is, is this common practise for such a scenario? What happens if I don't pay money in April and May 2024, which would just then bring the rent due up to date and not in arrears? I presume if we gave two months' notice we would not pay the last two months anyway? Ummm....help!

Thank you

Is it held in a tenancy deposit scheme?
5 weeks rent is the maximum allowed if rent is below £50000 6 weeks above
There have 30 days to give you details of the scheme 

That applies to a deposit. This is rent payable in advance.

What you claim to be "rent in advance" may still be deposit.  See Housing Act 2004 Section 212(8)
https://www.legislation.gov.uk/ukpga/2004/34/section/212

""" (8) In this Chapter—

........

“tenancy deposit”, in relation to a shorthold tenancy, means any money 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. """"


- to my mind "Rent payable in advance" meets that definition...

Best wishes to all

Yes, I remember seeing a court case where rent in advance was ruled as a deposit by another name, or words to that effect. It was deemed to be just an attempt to get around the max deposit rules, and ruled as unlawful.

Ah Hemmings beat me to it.

AliC999

Eek, so looks like I have opened a can of worms. I have paid 6 weeks deposit, which is protected and I have details of that. 

This is rent in advance. Which yes, would appear to also be a deposit. With the state of the economy, I just feel very uncomfortable with them holding so much cash of mine, without any protection. 

Thank you everyone. Great responses.