A letting agent has warned of a growing problem under the Renters’ Rights Act, with some tenants delaying their first month’s rent payment until weeks after they have moved in.

Dean Gill, director at Martin & Co Sheffield and Worksop, says it has encountered a small minority who appear to be taking advantage of rules which prevent landlords from asking for rent before a tenancy agreement has been signed by all parties.

Gill tells LandlordZONE that one recent case involved a new tenancy where the agreement was signed, and the agent had requested the rent. An hour later, the tenant called to say they would pay – but not until about three weeks after moving in.

“It used to be funds were in the account 24 hours before moving, but now we’re seeing some coming into the office to collect the keys and sitting in front of us and deferring the rent,” he says.

Money

“You wouldn’t normally issue a tenancy agreement until you had that money,” he explains. “The problem is that by the nature of that document being signed by all parties, that’s a legally binding contract. Only at that point could you request the rent.”

This leaves agents acting for landlords with little practical protection if a tenant refuses to pay before moving in, adds Gill who says that under the Protection from Eviction Act 1977, landlords cannot simply withhold the keys because rent has not been paid.

Budget

“We now have a landlord who’s got to budget until the rent comes in, a tenant who thinks it’s OK to start their tenancy in arrears and a government who are clearly deluded as to the reality of what goes on in the real world,” he says.

He also warns that failure to pay on time will have to be reflected in future landlord references and believes there should be a mechanism to address the problem, whereby a tenancy agreement could be signed but not become effective until the first month’s rent had been paid.

“The government should look at this again,” adds Gill.

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