Should prospective tenant be avoided after offering 12 months rent upfront

Hi Emma,

I would be most worried about money laundering in this instance.

I don't know any employers who pay in cash anymore especially a tech savvy industry like call centres.

Also rent upfront is the typical modus operandi of Cannabis Farming.

There may be nothing wrong, but you have reasonable grounds to be suspicious.

I think you are right to be suspicious. Who really wants to pay twelve months rent up front? I know I wouldn't. In our agency we do it very rarely, perhaps with somebody moving from overseas, but always subject to all other checks being undertaken to make sure the tenant is identifiable.

I agree with Neil that a UK resident being paid cash in this day and age is very unusual. You do not want to be drawn into any aspect of potential or perceived money laundering yourself and presumably you do not want to encourage others to do so either.

Our local police have given us posters headed "Tenant or Terrorist" (not for the front office I would add) after our lettings particulars were found with the latter. Paying money up front is something to look out for.

The offer is clearly attractive to you, hence why you are asking the question, but avoid avoid avoid!

Hi Emma

Do you have proof, other than just his word and details and documents from the prospective tenant, that he is or was employed by the call centre (and you know for sure the company is real)? Have you also contacted the new employer to verify he has a definite job offer with a starting date? You will obviously need the prospective tenant's authorisation to do this and employers will need to see this.

I suspect that if these companies exist at all, they will say they've never employed such a person. As Neal says, very few employers pay cash in hand nowadays, certainly not within the industry he claims to be employed in, and the fact that no salary is showing in his account is very worrying.

I suspect you've either got someone who feels he needs to talk up his circumstances in order to look better, or again as Neal has suggested, worse case scenario - a criminal.

I was a tenant a few years ago and paid 6 months rent up front, which came from my savings as I only had a small income from my own small property portfolio, so I wouldn't necessarily say the rent up front by itself is necessarily a problem, but it should flag up the need for a very thorough background check.

I really don't like what I'm hearing here and I personally would not take the risk as it's clear this person is lying. Also, for a flat in the south of England you shouldn't have to wait long before you get another offer.

Sounds like complete rubbish to me. I would not waste any time on this. There are other more standard tenants. Alternatively I use a one page questionnaire which each of my tenants has to answer with supporting evidence in full before I will even start to seriously consider them.
I won't take anyone who has not been with their current employer for 12 months for example and who is not established in their career.
I would not entertain Helpdesk staff because they would not be acceptable to other tenants or myself and can never claim to be in reasonably well paid secure employment. That is the nature of Helpdesks which no one with an option would want to deal with in any capacity and certainly not as an employee.

Hi Emma

I'm a tenant that has been in this situation so maybe my input can help.

When I moved from the South to the North I was moving to study. I had just finished uni (so no regular income showing on my bank) and no job lined up (just about to start my postgrad). I ended up paying 6 month in advance (from savings) to secure the property I wanted because no landlord or agent would take me (too high risk). We had to deal totally at a distance. I met them on day 1 and presented my passport as proof of I.D and paid the 6 months plus deposit and signed the AST.

I'm about to move back down South and I'm in the same situation: no regular income but this time I have a job lined up. I've paid referencing fees to both my current and future agent. My future employer also had to write a letter (I had to give them authority to speak to the agent/landlord but otherwise they were fine to do this). On the basis of all of these checks, I've managed to secure a property without paying so much upfront .

You should know, I would have offered rent upfront for the perfect property.

What I want you to take away from the above is that there are, at least, some circumstances where relative covenant strength demands paying more upfront. Even so, 12 months is a lot. If it were I, I would have started lower (maybe quarterly rent in advance and go to 6 months if pushed). If I was asked to pay 12 months in advance, I'd want a reduction in rent to reflect this.

If the tenant's circumstances are such a perfect storm that he needs to offer this much money upfront to get the property, he should be bending over backwards to show that he is not a risk. This includes asking his future employer to give a reference and giving as much information as possible.

It may be that there is something illegitimate here but this is a judgement call you need to make based on investigation. Ask the potential tenant where the money is coming from. You need to know, potentially for money laundering but also because, if the deposit is paid by a third party they need to be served prescribed information.

If someone else is funding the tenancy, ask them for a guarantee. Ask for a guarantee anyway if it make you more comfortable.

In regard to the AST, one thing to think about is what happens at the end. If it becomes a statutory periodic tenancy, the tenancy period will be 12 months with the rent due in advance. Is this what you and the tenant want? If not, the contract needs to deal with this.

Above, people have mentioned cannabis farms. There's another thread somewhere about potential criminal liability of a landlord in these circumstances. Aside from this, and on a practical level, cannabis farms produce moisture. In a loft space, this can literally rot the roof.

Even though the rent is paid in advance, you will still need to keep on top of this one and regularly inspect. If you inspect every quarter and take meter readings you'll know if the usage is too high (indicative of a farm). Keep an eye out for damp and any other obvious signs.

I do not think anyone would blame you for not taking this tenant. A good rule of thumb is "If it seems too good to be true, it probably is"...

Even if this tenant is a bona fide applicant that NEEDS a property because he has a job starting soon, you saying no won't end his world. If he has 12 months rent at his disposal, he could rent a hotel room on a weekly basis or find a room in a house for a short term until he is established.

If you are going to reject him, you could suggest the above short term solutions and ask him to reapply in a months time (i.e after he has his employment contract signed and can show income). Probable, if you do this, you will never hear from him again. If he does come back to you, it'll be as a local applicant with proof of employment and you can assess again.

I hope that you find something useful in this rather long and rambling post!