Being asked for six months’ rent up front – is this right? | The Tenants' Voice
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Being asked for six months' rent up front - is this right?

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93 views 1 replies latest reply: 24 August 2017
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Tenant

I recently took voluntary severance after a serious illness, but have saved up 18 months’ salary in the bank. I am planning to have a bit of time off to recover while looking for a new job and doing some consulting.

By an accident of bad timing (I’ll share that story another time!) I have to move out of my current rented accommodation of two years and have found a house an hour away which I can easily afford – it’s £100 pcm less than my current place. 

The letting agent has just asked me to pay 6 months’ rent up front because I ‘have no income’ – but I have proven to them that I have a significant amount in the bank.

I’m not sure what the justification for this is. I’ve already agreed to pay 1.5 months’ deposit instead of one. I’m better off than anyone I would ask to be a guarantor. If I’d won the lottery would they be asking for it? If I were on benefits with zero savings? I’ve never been financially better off (for once in my life) but this is the first time I’ve been asked for this! Maybe I should sign on – but I wouldn’t qualify for benefits because of my savings…

Will the money go to the landlord? What if I find a job and want to end the tenancy early?

I’m not sure what to say in response. I need to move soon but I think the landlord is being greedy. I might say I’ll pay three months but it can’t go to the landlord directly. But what would it mean for my rights as a tenant? If the house floods will I have any right to the money back? It seems crazy – the town I’m moving to isn’t exactly the richest place in the world, and this house has been empty for weeks. You’d think they’d be biting my hand off to rent it…

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Tenant

I guess you need to look at it from the landlord’s/agent’s perspective.

You are, to all intents and purposes, unemployed. And despite the fact that you have considerable savings, the landlord/agent has no guarantee that you won’t blow all those savings on a trip to Las Vegas!

I’ve been in a somewhat similar position to you in the past, in that my income is primarily derived from dividend income on shares, which is paid quarterly and/or annually. For several years I used to regularly pay my rent 3 months in advance, every quarter, and never experienced any problems.

A standard clause in any tenancy agreement outlines the obligations of the landlord to provide alternative accommodation (or the cost of alternative accommodation), if for any reason the property they are letting to you becomes uninhabitable. I don’t think it really makes any difference whether you are paying your rent 1 month, 3 or 6 months in advance: if for whatever reason you aren’t able to live in the property you have paid to live in for any period, you would not be liable for the cost of alternative accommodation.

As for a situation where you might want to end your tenancy early, and reclaim any rent you have already paid in advance, I guess you would need to look closely at your tenancy agreement to see what stipulations it contains with regards early-termination. I think I’m right in saying that most standard short-term tenancy agreements effectively obligate the tenant to continue to pay rent on the property for the full duration of the tenancy, regardless of whether or not the tenant wants to carry on living there or not.

It is usually up to the landlord’s discretion if a tenant wants to vacate a short-term tenancy early, whether or not s/he is willing to release the tenant from their contractual obligation. I suppose if you have paid for the full term of the tenancy in advance, a less benevolent landlord might choose not to exercise any discretion in that regard..?

I think the best advice I would offer is to base your decision on how reputable/established the letting agent is. If it is a well-known letting chain, then they tend to do everything by the book. And whilst that means they aren’t giving you any wiggle-room on their policy with regards (technically) “unemployed” tenants… It should mean that they will also play by the book with regards any refund of rent that may ever become due.

If it is a less well-known/reputable agent, or you are getting a whiff of suspicion about the whole situation, then I’d walk away and find another property/agent/landlord.

You could also call around a few other agents in any case, and see what their policy with regards advance rent would be, if you were going to rent one of their properties. That might give you some peace of mind at least.

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