Great! You’ve found the property, agreed the rent, you’re credit and reference checks have been approved and it’s almost time to move in! Well almost, just that little matter of the deposit, first months rent and perhaps some fees to pay first.
It is customary to pay one months rent in advance, at the same time you pay your deposit. Following this you pay rent each month, on an agreed date to the landlord. Best way to pay is by standing order – this is a payment set up from your bank account (you contact your bank to set it up), which sends a specific amount of money (the rent) to the landlord or agents account, every month, on the same date (e.g. 21st of each month).
Some landlords allow you to pay by cheque or card each month, but you know what, you’ll just end up missing a payment because you are busy, away or on holiday and that will upset the landlord and perhaps stop them giving you a good reference in future. You may also have a black mark placed against your credit rating.
Simply not worth it, instead, knowing the rent will go out of your account each month on the same date gives you discipline to ensure the money is there (or your bank will hit you with overdraft fees). Best is to ask the landlord if you can pay each month a couple of working days after your salary is paid into your account. They will agree, you just need to pay a slightly different amount for the first months rent to take you upto that date. This means you will always be on time with payment and know what you have left to spend and save for the remainder of the month.
If the landlord has asked you for more than one months rent up front, or you have offered to pay several months rent in advance to reduce your rent or secure the property, then this full payment takes place now, with the deposit.
Usually renters pay the landlord 6 to 8 weeks rent, that acts as a deposit. This is used as security by the landlord, in case the tenant stops paying the rent, leaves before the tenancy contract is over (without giving notice), causes damage or excessive wear and tear to the property or any furnishings the landlord has provided. Sometimes landlords require a bigger deposit (3 months is common in this case) if they are wary of the renter – often the case with students, young/ first time renters, non-British residents and those who are self employed.
Giving a larger deposit is not the same as paying more rent in advance. Deposits are held separately and the landlord is only supposed to take money from this in relation to damage/ non-payment etc., usually at the end of the rental term. Should you keep the property in the same condition it was, when you moved in, you should expect all your deposit returned.
How to landlords measure damage or excessive wear and tear? Simple… by viewing the property at the end of the tenancy (on the day you move your belongings out) with the Inventory Check details from the day you moved into the property.
Tenancy Deposit Schemes
The UK Government have introduced a scheme to protect tenants deposits from landlords who were acting unfairly. Previously some landlords made up poor excuses, or invented damage to take money from the deposit when it was unjustified – some thought it was a ‘top up’ to the rent. As more landlords abused this the government acted so now you should always get your deposit back as long as you kept to the tenancy agreement and didn’t cause any damage. This only counts for a deposit paid on moving into a property – not holding deposits.
Our favourite source of information for Deposit Schemes is the government page here. All private landlords must be a member of an official deposit scheme – they cannot keep the money in their own bank account, so get full details of which scheme the money will be in and receipts and proof of the money being deposited there.
If you have found a rental home through the comfort and security of a Letting Agent the only downside is that they will charge you an ‘administration’ fee for the privilege. This should only be charged once a tenancy contract has been provided and signed. Never pay the agent before you have this agreement signed by the landlord as it may be a scam (you should never have to pay a ‘registration fee’, ‘viewing fee’ or processing fees until the property is yours).
Usually agents charge upto £100, this can be per person, if more than one person is on the tenancy agreement. We’d advise that everyone occupying the property is always on the tenancy agreement, in case of issues between the tenants in the future. Should the agent charge more than £100, ask to see written guidelines on their fees and tell them you will report them to the Ombudsman if you think they are trying to rip you off. It’s best to ask about agent fees when registering with them if you remember.
Invoice / Receipts
Any time you have to pay money to an agent or landlord, you Must ask for an invoice first, stating the exact amount and description of charge (fees, deposit, rent) and on payment ask for a receipt. This gives you evidence if you should come to any disputes with the landlord or agent and gives you a paper or electronic trail you can use to prove you were a good tenant to future landlords.