Landlords could see tenants moving in without paying rent

Real estate firm Knight Frank has issued a stark warning that tenants could move into properties without paying any rent once the Renters’ Rights Bill becomes law.

The government’s bill will prohibit any rent payment before a tenancy agreement is signed, with landlords facing fines for accepting such payments.

The firm’s head of lettings, Gary Hall, said: “These amendments to the Renters’ Rights Bill are bad news for landlords.

“Under the amendments, any payment of rent made before a tenancy agreement is signed will be a prohibited payment.”

Landlord could be fined

Mr Hall continued: “If a landlord invites, encourages, or accepts such a payment, the landlord or their agent could face local authority enforcement action and a fine.

“The big problem with this is often tenants want to move into a rental property quickly, sometimes in a matter of days, and transfer of funds can take three to five days, sometimes more if coming from overseas.

“Tenants will want to be able to make one payment covering rent and deposit as soon as possible to avoid multiple bank charges or the admin of making multiple payments.”

Allow rent at the start of a tenancy

He added: “The Government needs to see sense and allow rent at the start of a tenancy to be paid before a tenancy agreement is signed and before the start date of the tenancy.

“The current framework puts landlords and agents at constant risk of enforcement action for something that is out of their control.

“It is also unfair for a landlord to be at risk of a tenant moving into a property without the first month’s rent paid.”

What the government says

The government’s guide to the Bill explains the ban on advance payments:

The Renters’ Rights Bill will end the practice of landlords demanding large amounts of rent in advance from tenants looking to secure a tenancy.

This unfair practice can encourage prospective tenants to stretch their finances to the limit, preventing them from moving within, or accessing the sector altogether.

Once enacted, the Renters’ Rights Bill will amend the Tenant Fees Act 2019 to prohibit landlords or letting agents from requiring or accepting any payment of rent in advance of the tenancy being entered into.

A landlord will only be able to require up to one month’s rent (or 28 days’ rent for tenancies with rental periods of less than one month) once a tenancy agreement has been signed and before commencement.

The Renters’ Rights Bill will also amend the Housing Act 1988 to provide that, once a tenancy starts, a landlord will be unable to enforce any terms in a tenancy agreement that require rent to be paid in advance of the agreed due date. 

This measure will protect prospective tenants from large requests for rent in advance that are beyond their means.

Share This Article