While a landlord may be impressed and happy to receive upfront payments for between six to 12 months' rent in advance, the TPN Credit Bureau advises a cautious approach.
The landlord may be primed to trust the tenant as upfront payments have a powerful positive impact on the relationship of trust and the landlord may allow the tenant some leeway to their own detriment.
While not always the case, a willingness to pay upfront could allude to the fact that money comes and goes for that tenant. | |
Another problem which often arises is that landlords and tenants don’t agree upfront on how the payment for utilities will be handled. This should be clearly set out in the lease agreement, especially if the tenant is required to pay that monthly over and above the upfront rental payment. Consumer Protection Act The money should therefore not be spent but invested and only drawn on a monthly basis. TPN advises that it’s best to make use of an estate agent as an intermediary who can ensure that all is above board and that the money is in trust and accruing interest for the tenant’s benefit and only drawn and paid over to the landlord as it becomes due. Alternatively, the landlord can place the money in a separate account with a monthly withdrawal set up to periodically release the rental amount. Vet all tenant applicationsThere are definitely benefits to tenants paying rent upfront as it offers excellent security and could put the tenant at the top of the list of applicants. Money laundering scamsWhile always cautious, they do accept upfront rental payments provided the source of the funds can be verified to ensure that it is not part of a money laundering scam. Upfront payments are often ideal for those looking to negotiate a better rental price. | |
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