philipjm Posted August 28, 2007 Report Share Posted August 28, 2007 Hello all I seem to recall reading somewhere that under an AST the maximum deposit I can take is equivalent to two times the monthly rent? Can anyone confirm if my suspicions are correct and if so point me to the relavent piece of legislations? e.g. L&T Act, Housing Act 88, 96 etc.. Thanks! Phil Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted August 28, 2007 Report Share Posted August 28, 2007 Hi Phil not sure on that one ! but if you are trying to remove risk then take 6-12 months rent payment up front as well ! Simon Link to comment Share on other sites More sharing options...
GPEL Posted August 28, 2007 Report Share Posted August 28, 2007 No prescribed maximum limit but more than 3 months may be deemed excessive and you're unlikely to find many willing to pay more than the industry norm of between 1 and 2 months. Link to comment Share on other sites More sharing options...
philipjm Posted August 29, 2007 Author Report Share Posted August 29, 2007 Hello all I've just asked a friend whose an ARLA agent, they e-mailed ARLA and the response was: There's a governed rule on the amount of deposit that should be taken but as a general guideline it is recommended that no more than 2 months worth of rent should be requested. The reason I'm not doing the rent in advance thing is because of the complexities involved in the agreement. If I stipulate that I require, say, 4 months in advance but that the tenants have to start paying at month 1 (so always remaining in 4 months credit) then I could not serve section 8 until they have not paid for 6 months (and thus are in 2 months arrears). It renders the whole idea pointless....I think? Ta Phil Link to comment Share on other sites More sharing options...
Trenners Posted August 29, 2007 Report Share Posted August 29, 2007 Hi Phil, I think you are confusing two things here. A deposit is held by the landlord (or sent to The Deposit Protection Service) so that deductions can be agreed and made, at the end of the tenancy, to compensate the landlord for any damage done to the property during the tenancy by the tenant. I don't see why there would be any upper limit on the amount of Deposit that could be requested - although I agree that the norm is between 1 and 2 months rent. Rent in advance is usually for a 6 month or 12 month period. The tenant pays the ENTIRE rent in advance at the commencement of the tenancy and doesn't pay ANYMORE rent until after the tenancy either expires (in which case the tenant leaves) or is renewed (in which case you can ask the tenant to pay IN ADVANCE again). I have never heard of a rent in advance agreement where the tenant pays 4 months rent upfront and then pays rent every month as well .... very bizarre ! Good luck, Mark Link to comment Share on other sites More sharing options...
GPEL Posted August 29, 2007 Report Share Posted August 29, 2007 Taking several months rent in advance and taking rent payments from month 1 would be construed as taking a deposit and so needing mandatory protection. Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted August 29, 2007 Report Share Posted August 29, 2007 Have to completely echo your thoughts Mark ! If you are going to take 4 then just take 6 and be done with it - then renew lease at 6 mth intervals .....Unless they are vietnamese and look like keen gardeners; in which case take the 6 mths and at least a £5000 deposit and inspect once a week !!!! Simon Link to comment Share on other sites More sharing options...
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