6 mo rent offered to me in advance - what are the drawbacks?

[catcuddler]

I have just let a house out on a 6 month AST with monthly rental payments in advance. I remember, though, that when the tenants were first viewing the house, they said they could pay 6 months rent in advance. Can you do this with an AST? Would there be any disadvantages in accepting this payment, eg would it put the tenant in a stronger postition if, say, you wanted to evict them because they'd broken one of the contract terms? Anybody's thoughts on this would be appreciated.

[davidjohnbutton]

My own recollection on this is that more than two months rent paid in advance is a premium - Paul F is the one who will say accurately how this might affect the tenancy itself.

[Andy Parker]

I think the issue of taking a premium relates to the deposit only.I can think of a drawback - you might spend it all at once!

[Paul_f]

Andy Parker's quite right, the two months rent applies only to deposits.

There is nothing intrinsically wrong with a tenant paying any amount of rent in advance as it doesn't normally (see below*) affect the terms of the AST. It might however have an adverse effect on your income tax liability as you might have to pay tax on all the rent collected within that fiscal year. Not always a good idea if it leaves you worse off by doing so!

*I would also avoid taking any amount of rent in excess of the fixed period as you are in fact possibly extending the original term by doing so.

[lawstudent]

another thing worth considering (and it depends on how the lease is worded) is that the period of the lease, if it were allowed to become a stautory periodic tenancy after the fixed term, could be deemed to be 6 months. It would then be at least six more months before you could obtain possession.

[Paul_f]

Very good point from lawstudent!