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View Full Version : New landlord-deposit/tenant ID/rent arrangements



annieb
26-08-2006, 14:05 PM
Hi everyone,

My husband and I have been letting our home for the past year through an agency but there has been a bit of an upset with the agency and we have decided to go it alone.

We have found a new tenant already and we want to know whether anyone can point us in the direction of a step-by-step guide on how to start the tenancy. We have been doing our own research and have bought books and sample contracts but we are still unclear about the practicalities such as:-

1) At what stage do we take the deposit and in what form? Obviously we understand that the funds should be cleared before the signing of the Tenancy Agreement but why would a complete stranger part with a large sum of money without knowing us? What kind of receipt should we provide?

2) What ID do we need to obtain and do we need a photocopy? If a copy is required, this could be impractical if we don't have a photocopier to hand.

3) We're not sure how much rent to take in advance if a tenancy starts mid-month (we intend to take rent on the 1st of the month). Also, if the tenant is going to pay by a monthly standing order and rent is payable on the 1st what is the general practice - does the standing order leave the tenant's bank on the 1st or should it reach our bank on the 1st?

We have loads more questions and are hoping to get some advice from our local landlord's association and a solicitor next week but we wonder if anyone can help in the meantime.

Thank you for your time.

Tassotti
26-08-2006, 14:36 PM
Hi

First of all read this

http://www.landlordzone.co.uk/successful_landlording.htm

Regarding SO, if rent is due on first of month, I set up the SO for 29th Month (previous month)

BACS money floats about nowhere for 3 days (?)

Tass

pippay
27-08-2006, 03:08 AM
I'm a tenant not a LL but feel these suggestions are more than reasonable for both tenant and LL alike




2) What ID do we need to obtain and do we need a photocopy? If a copy is required, this could be impractical if we don't have a photocopier to hand.I would certainly take some photo ID such as Driving Licence or Passport (and certainly a passport in the case of a foreign national!) together with some bills at their former address. Solicitors offer an ID verification service for individuals for a nominal fee of £5 - £10. The tenant takes the ID and a copy (preferably colour) to a solicitor of their choice, who checks it against the original and then signs to say its a true copy. It takes only a few minutes to do and it would certainly give you additional comfort in knowing the tenant is taking the whole thing seriously. OR you could just accept the tenant giving you a copy of ID (bringing the original with them) so you can check passport /driving licence numbers remembering of course that the DL number is made up of their date of birth so you can check this against the date of birth given in their tenancy application. OR get a printer / scanner for less than £100?? Brother do a very reasonable colour copier/scanner for about £40. You can also use the receipt in your yearly accounts as a tax deductible.

3) We're not sure how much rent to take in advance if a tenancy starts mid-month (we intend to take rent on the 1st of the month). Also, if the tenant is going to pay by a monthly standing order and rent is payable on the 1st what is the general practice - does the standing order leave the tenant's bank on the 1st or should it reach our bank on the 1st?Personally I would ask the tenant what day of the month they get paid and then arrange for the S/O to leave their bank the same or next day as that -leaving you safe in the knowledge your rent is one of the first things to get paid each month. Most people get paid around the 24th - 31st each month. By negotiating this with the tenant it also gives the tenant the feeling that you are being reasonable with them ...



Thank you for your time.

Worldlife
27-08-2006, 06:32 AM
Making the rental due date different to the commencement date of the tenancy only seems to make complications at the end of the tenancy for both the tenant and landlord.

I believe in keeping life simple!!!

To allow for the delays in the BACS process the tenant must authorise the standing order to be paid at least three days in advance of date the payment is due. Otherwise it will not be credited to the landlords account on the date it is due.

annieb
30-08-2006, 09:10 AM
Thank you for your replies. I'm still a little unsure about the deposit and rent in advance. Should we be receiving this at the same time as signing the Tenancy Agreement (assuming there is still time to clear the funds) or before? What do people usually accept, ie. bankers draft, building society cheque, cash, personal cheque, etc.? Do we get a receipt book and use that for any transactions?

With the Standing Order, in the case of a weekend or bank holiday is it common practice to perhaps receive the funds a little late, ie. on the next bank working day? Is this acceptable or can it mess up things like if you need to give notice to the tenanat to move out?

One last thing. Having read the very useful notes at LandlordZone, we realize that we need to have a Tenant Application form. As part of the referencing process we are using the Letsure form which contains a lot of the information on the Tenant Application form. Is it OK to have our own Tenant Application form and use this in combination with the Letsure form? The tenant has to sign both but it would save them having to duplicate a lot of information. What we're saying is, if we needed to rely upon this information in the future, would having two separate forms jeapordize anything?

Sorry for all the questions. We're complete novices.

Thanks for all your help.

pippay
30-08-2006, 09:38 AM
It is the banks that dictate when a standing order clears into your account .. and in the case of weekends and B/Hols it is normal practice for SO's to be credited to your account the following working day - in exactly the same way as your mortgage payment would be cleared into your lenders account the next working day, if your payment date fell on a B/Hol. It won't make any difference when giving notice.



With the Standing Order, in the case of a weekend or bank holiday is it common practice to perhaps receive the funds a little late, ie. on the next bank working day? Is this acceptable or can it mess up things like if you need to give notice to the tenanat to move out?

Tassotti
30-08-2006, 10:48 AM
With regards to the deposit and month upfront. Take it anyway you want, but whatever you do, make sure it clears in your account before handing over the keys.

Personally I prefer cash on the move in day. You can then have the tenants sign the AST, inventory and Section 21 (not essential to be signed) when you move in.

Get yourself a receipt book and provide one.

Tass

Ericthelobster
30-08-2006, 11:39 AM
Thank you for your replies. I'm still a little unsure about the deposit and rent in advance. Should we be receiving this at the same time as signing the Tenancy Agreement (assuming there is still time to clear the funds) or before? What do people usually accept, ie. bankers draft, building society cheque, cash, personal cheque, etc.? Do we get a receipt book and use that for any transactions?You shouldn't be asking for wodges of dosh before the agreement is signed; you might get the agreement signed quite a while before it actually commences, and for a start the actual rent won't be due until the first day anyway. Personally until the agreement is signed, I ask for a nominal 'holding' deposit of 100 GBP which hopefully stops timewasters while I am processing their application, and then get them to sign the agreement ASAP (the holding deposit being deducted from the sum due as damage deposit when they move in). I ask for the balance of the deposit and the first months' rent in 'cleared funds' before I hand over the keys - that means a cheque paid into my account three working days previously, or cash on the nail (which is what normally happens in practice).


With the Standing Order, in the case of a weekend or bank holiday is it common practice to perhaps receive the funds a little late, ie. on the next bank working day? Is this acceptable or can it mess up things like if you need to give notice to the tenanat to move out?Yes the standing order will be actioned by the paying bank on a fixed date, and will arrive in your account on different dates according to weekends, bank hols etc. You just live with that; it's not an issue. You'll probably want to make sure your own mortgage payment on the property leaves your account some time after the rent payment comes in, to help your cashflow.


One last thing. Having read the very useful notes at LandlordZone, we realize that we need to have a Tenant Application form. As part of the referencing process we are using the Letsure form which contains a lot of the information on the Tenant Application form. Is it OK to have our own Tenant Application form and use this in combination with the Letsure form? The tenant has to sign both but it would save them having to duplicate a lot of information. What we're saying is, if we needed to rely upon this information in the future, would having two separate forms jeapordize anything?Not a problem apart from the hassle of having tenant complete two forms. I don't use Letsure myself, but does the tenant have to complete their form themselves? ie, can't you just design your own application form to capture all that is needed, and then apply to Letsure yourself?

By the way I'd reccommend 'Renting Out Your Property For Dummies' as a useful reference for a newbie!

annieb
30-08-2006, 12:05 PM
Thank you everybody, you've all been very helpful. :)