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Prohibited payment rule in Renters’ Rights Bill slammed by Knight Frank

The Renters’ Rights Bill amendment preventing rent from being paid before the tenancy agreement is signed could cause major problems, real estate consultancy Knight Frank has warned.

The firm said it could affect tenants when there are delays in transferring funds, as well a putting the landlord at risk of having a tenant move in before they’ve paid.

Gary Hall, head of lettings at Knight Frank, said: “These amendments to the Renters’ Rights Bill are bad news for landlords.

“Under the amendments, any payment of rent made before a tenancy agreement is signed will be a prohibited payment.

“If a landlord invites, encourages, or accepts such a payment, the landlord or their agent could face local authority enforcement action and a fine.

“The big problem with this is often tenants want to move into a rental property quickly (sometimes in a matter of days) and transfer of funds can take 3-5 days, sometimes more if coming from overseas.

“Tenants will want to be able to make one payment covering rent and deposit as soon as possible to avoid multiple bank charges or the admin of making multiple payments.”

The Renters’ Rights Bill will now pass through the House of Lords, where Knight Frank hopes there will be positive alterations to bill.

Hall added: “The government needs to see sense and allow rent at the start of a tenancy to be paid before a tenancy agreement is signed and before the start date of the tenancy.

“The current framework puts landlords and agents at constant risk of enforcement action for something that is out of their control.

“It is also unfair for a landlord to be at risk of a tenant moving into a property without the first month’s rent paid.”

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