Rent Setting

The landlord and tenant should mutually agree on the initial rent. During the first six months of a tenancy, tenants can refer the rent to the First-tier Tribunal (Property Chamber - Residential Property) for review if they consider the rent above the market rent. This is, however, very rarely done.

When considering the rent to charge, a landlord should consider what repairs and other outgoings are likely to ensure sufficient income. This needs to be balanced with current market conditions.

Setting The Rent

Before the tenancy begins, the landlord and tenant should mutually agree on the rent, including arrangements for when to pay and review it. The details of these matters should be included clearly in the tenancy agreement. If the tenancy is for a fixed term, the rent given in the contract will last for the whole of the fixed term unless there is a rent review clause.

Rent Book and Receipts

A landlord is legally obliged to provide a rent book if the rent is payable every week (failure to do so is a criminal offence.). The rent book provided must, by law, contain certain information. Standard rent books for assured and assured shorthold tenancies can be obtained from law stationers and larger general stationers.

However, the landlord should also record rent payments and provide receipts for rent paid (particularly for cash payments) for all tenancies to avoid any later disagreements.

Rent in Advance

The common law position is that rent is payable in arrears unless there is a term in the tenancy expressly requiring the rent to be payable in advance (as is the case in most tenancy agreements).

Sometimes, if references aren't satisfactory, a landlord may seek several months' rent in advance (for example, six months). As long as the tenant agrees, this is acceptable. However, care should be taken that it's actual rent in advance and the landlord doesn't hold money.

For example, rent is due on 1 January, and the landlord asks for two months' rent in advance. The following rent will be payable on 1 March (as the two months' rent in advance covers 1 January and 1 February). Suppose the landlord was to ask for another rent on 1 February after receiving two months' rent. In that case, this "extra" amount might be deemed a deposit and require protection, leading to a breach of tenancy fees rules if a deposit has already been taken (see the tenant fees section).

If several months' rent in advance is taken, to avoid it being regarded as a tenancy deposit, the tenancy agreement should expressly state the advanced payment as a single amount and show the period it covers.

For example: if a tenancy starts on 15 January, the rent is £650 per month. Six months' rent in advance is being taken; the tenancy should state words that rent of £3,900 (6 x £650) is payable for 15 January to 14 July and after that in advance at the rate of £650 per calendar month.