Yes, this is a common solution when tenants can't pass referencing or provide a guarantor.
How it Works within our Rent Now Service
- When editing the contract, you can tell us how many months' rent the tenant is to pay in advance.
- The entire amount due for rent in advance will be collected in the final balance payment along with the tenancy deposit after the contract has been signed.
We can only collect £12,000 as part of our Rent In Advance feature. This amount includes the first month's rent and the security deposit.
Rent In Advance can be activated by clicking Edit Contract and navigating to your Advanced Contract Settings.
Advance Rent vs Deposit
It is worth stressing the importance of agreeing in writing that the money being paid to the landlord is advance rent and NOT a deposit. While taking rent in advance is perfectly legitimate, deposits need to be protected in a government-approved scheme. It is crucial, then, to avoid the possibility that the money could be considered an unprotected deposit.
If you do intend to take rent in advance, make sure you have a deposit too in order to clearly differentiate the payments.
To confirm, the deposit is security for the obligation to pay rent, whereas paying rent in advance must fulfil the obligation to pay rent rather than be viewed as a separate obligation or security.
Information on this site is by way of general guidance only and may not apply in your particular circumstances. You should not act or refrain from acting upon information on this site without seeking independent legal advice.