Taking deposit and first months rent

Hi Gilly

Most of my incoming tenants meet my tenants who are moving out as I advertise the property as soon as notice is given and my existing tenants are incentivised to do the viewings. The procedures I use are well documented here >> http://lettingagentsonline.co.uk/free-guide-to-finding-perfect-tenants/

I think that after the tenants have seen the advert on Rightmove, spoken to a call centre, then spoken to me or my brother, then met the tenant, this gives them a lot of confidence. They generally pay the deposit and the first months rent up front without question.

Having said all of that I do understand the point you are making.

Some of our tenants have paid by credit card or PayPal and I've never really considered why. Maybe that's what is convenient for them or perhaps they do it for that extra peace of mind in terms of the buyer protection offered via those payment methods.

In years gone by, before electronic banking and PayPal we used to insist on the deposit and first months rent being paid on move in day in the form of cash or bank draft or building society cheque.

I wouldn't mind at all if a tenant wanted to check me out. In fact, it would probably give me added comfort if they were to do their due diligence and ask me from proof of ID and proof of ownership. I would happily show them a copy of my passport and/or driving licence and point them to HM Land Registry to confirm that I am indeed the owner of the property. I have never needed to do that though.

I hope that helps.
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I am always amazed that tenants will hand over what can normally be a couple of thousand pounds to someone they've met through an ad, and fortunately for them I am genuine; I've heard of many examples of fraud, sometimes from new tenants handing me, a stranger, 2 month's rent in cash. I'm not sure what the answer is, apart from paypal (none of my tenants has ever asked and I wouldn't fancy the charges) and I don't take credit cards. I think it's time for Landlords to be registered, there are far too many dodgy ones out there.

We make it clear early on that we will not hand the keys over until the rent and deposit are cleared in our account, or paid cash or card on signing. We then also remind them a week before move in.
As an agent, it's a bit easier to insist on this, as they come to our office to sign. I can understand tenants being a bit less keen with private landlords.

Ask for it to be paid when signing. If they don't bring it or make the transfer, don't go any further, EVER!

I asked for it in cash on the day of signing the contract, which was done before they moved in.

Reply to the comment left by "Alex Chard" at "10/07/2014 - 09:11":

Hi Alex

It's not unheard of for fake agents to set up shop, rent a retail premises, advertise free lettings for X months to local landlords, take on a load of properties, advertise the properties at absolute bargain prices, take deposits and rent of several people for every property and then do a runner.

Apparently this type of scam is quite prevalent in some areas on London and was a massive problem during the Olympics when thousands of people from overseas were renting properties short term and never actually visited the property until move in day. Can you imagine turning up in a foreign country, going to a letting agency which doesn't exist, only to find an angry mob of people outside with their suitcases in exactly the same position? It happens!
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Thanks so much to all of you for the helpful and comprehensive replies.

It says something about Society that I have to pose the question, but I am starting to notice more fraud being reported and more errant tenants, sadly. I agree that it is a little different between Agents and private landlords (I don't have a card facility and as you mention Paypal is another little chip off the income) .

Although it has never happened, (that I have not been paid the first month's rent - excuse the double negative!), it obviously could. I would like to insist on funds being cleared before they move in, but then the tenant is in a vulnerable position and sometimes it can all happen very quickly. Conversely tenants seem to be suffering from new scams, so anything we can all do to prevent that must be a bonus.

Is anyone using the latest technology to solve this problem i.e. seeing the transaction take place on the Internet together on the day? It makes sense to, in this day and age I guess and may well be the norm in time to come.

I did have a tenant do the transfer on his iPhone in front of me and I then checked it into my account on my iPad - so it can be done, but if it is a fraud, the bank will take it back pronto, so there is still an element of trust.

I had an amazing scam which shook my little world, a couple transferred the money to me, they came back to me and showed me a bank statement which showed the transfer to me (my name and the correct amount) all on 'proper' Metro bank headed statement, it didn't show up in my bank but we put that down to Metro being a 'new' bank (idiot) it then did show up and stayed for a couple of days then went out again and my bank sent me an uncleared check. The scammers had forged the bank statement (the bank won't tell me how they did it or give me any info, 'confidentiality' ho ho), then paid in a cheque to show the rent in and give them a few day's grace but they were surprised that the cheque had been returned to me. They left after a couple of weeks, I lost 2 weeks rent, but it was a place I'd been intending to refurbish anyway so wasn't very nice but the were insistent that they wanted it (alarm bells should have gone off), but I then had a phone bill for the previous tenant who had asked BT to cancel but BT being BT didn't and they had run up a bill for £600, I checked the numbers and rang a couple and found another woman who had had these people in her place and they had stolen and used cheques. End result was that 'he' was found, he was an illegal immigrant and wanted for other frauds, and she said that she was the innocent party. This couple had checked out - her landlord was a 'friend' but her work reference was true - except she was on 2 weeks notice which her office manager didn't think she needed to tell me. He also checked out as a trainee pharmacist.

Always check your bank account every day - may seem a silly thing to say but some people don't and it would give your fraudsters extra time - before you realise of course -because once they are in, they are in for 6 months at least.

Gilly Very glad to hear that your tenants did follow thru and make payment, but it is very risky handing over keys on trust; I have sadly had my fingers burned before. Virtually everyone has bank accounts accessible online and can do virtually instant transfers now, so now we either meet new tenants at the property the day before , do the transfer face to face with a smartphone or tablet, and then hand over the keys once we have confirmed receipt in our account; or meet on the day. To give reassurance to the new tenant we always prepare all the deposit paperwork in advance so their certificate is all ready to handover on receipt of funds.

we would never ever hand over keys without the dosh. you are lucky to have been paid. dont forget the law is loaded against you and in favour of the tenant so dont take short cuts. it is for the tenant to do their due diligence...why expose yourself if they choose not to? and change the stupid wording on the TA!