Landlords could see tenants moving in without paying rent

Landlords could see tenants moving in without paying rent

0:05 AM, 22nd January 2025, About 7 days ago 65

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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.


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Badger

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13:18 PM, 25th January 2025, About 3 days ago

Reply to the comment left by Slooky at 25/01/2025 - 13:10
There is certainly not a cost to the tenant.

I don't know about how much it costs landlords as I don't use it from that end of the deal.

Slooky

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13:31 PM, 25th January 2025, About 3 days ago

Reply to the comment left by Badger at 25/01/2025 - 13:18
I recently had to sign some documents digitally and found a free trial. But next month I had to do it again and could only find software that had a monthly charge to do it. My only option was to print of the documents I had to sign, take a photo and then send them to the company. They were okay with this but I don't think that would be okay for a TA..

Kate Mellor

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13:39 PM, 25th January 2025, About 3 days ago

Reply to the comment left by Slooky at 25/01/2025 - 13:10
Adobe standard is £13.14 pcm and it’s free for the recipient and they don’t need to download any software or app to use it. Just click on a link.

Tiger

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13:42 PM, 25th January 2025, About 3 days ago

Reply to the comment left by Guy Malone at 22/01/2025 - 08:22
You are dealing with secure and large companies. You would normally have done a credit check or know the company's worthiness. You know you will get paid, like just as I know my workmen will be paid. However, tenants like to fritter their money. A lot of of my tenants or most are students. If they were not asked to pay on advance or when their loans are paid, it would not occur for them to pay. If they do not pay and not leave or leave with arrears and totally default, the law will be on their side. While your debt you could claim. Without your work contract, you may be never have work. Similarly, these tenants will have problems finding accomodation in the future but for the landlord damage is done.
Another scenario is that you go to supermarket to buy food, grocery and what ever you want, clothes for your freezer etc, you have to pay before you start using the items or before you take it home. Maybe we should change the legislation for that. I guarantee you those supermarkets will always be chasing for their money with additional overheads and all items will be become expensive. Inflation will rise. Some supermarkets will close down. You cannot have legislation interfere in any businesses. Your business model works for you for a reason. She me workmen ask for upfront money before starting work. There is no legislation for that. It is your choice. The choice of taking rent in advance is totally up to the landlord and such legislation is illegally done for power seeking politicians and charities, who don't wish to put any money where their mouth is.

Keith Wellburn

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13:45 PM, 25th January 2025, About 3 days ago

Reply to the comment left by Slooky at 25/01/2025 - 13:31
I recall when an agent I used started to use docu sign some years back for me to sign my agreements with them, they gave instructions not to click on a particular link that came up to start a trial and be able to use some extra features - it was possible to just sign without anything else FOC as I did over several years for the marketing and re letting of my student HMOs.

Tiger

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13:46 PM, 25th January 2025, About 3 days ago

In short, it is dictatorship, telling businesses when to expect money, No other businesses have such legislation.

Tiger

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14:00 PM, 25th January 2025, About 3 days ago

Reply to the comment left by Guy Malone at 22/01/2025 - 08:22
Bear in mind you have not given anything to the other company, no service no asset, whereas the tenants with just a fraction (a month and deposit upfront) of the money they get the keys to a property. The landlord hopes, trusts that the tenants with your keys and property will continue to pay, while the landlord gave to pay the interest for the loan of the asset, maintenance and other works to obtain certificates. The landlord must have upfront money. Soon there will be no rental properties left for increasing number of tenants.I am selling 3 now. 3 to 4 will be sold in the middle of 2027.
If I can keep any properties empty, I shall. The consequence will be less taxes collected by HMRC. Councils may benefit from higher CT.

Tiger

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14:18 PM, 25th January 2025, About 3 days ago

Reply to the comment left by T C at 22/01/2025 - 13:35
That's right, so I am not sure how these politicians, especially the PM, who is a lawyer can even agree to this legislarion.

Gromit

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14:24 PM, 25th January 2025, About 3 days ago

Reply to the comment left by Tiger at 25/01/2025 - 14:19I doubt he'll even see it.

Northernpleb

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15:29 PM, 25th January 2025, About 3 days ago

The system has worked well for many years why change it.

The tenancy agreement is a contract . and if the money is not received the Contract is broken and void

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