In this article, I am going to cover whether a landlord can ask you to prepay rent.
In order to answer this question fully and in the most helpful way possible, I am going to discuss the following:
- What is prepayment of rent?
- What are the legal restrictions that may apply to prepayment of rent
- Why do landlords ask tenants to prepay rent?
- What are tips on how to respond to requests for rental prepayment?
Let’s get into it.
The information contained in this post is for informational purposes only. It is not legal advice. You should seek the advice of a qualified legal professional before making any decisions relating to the topics covered by this article.
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What is Prepayment of Rent?
Prepaid rent is defined as rent that is paid before the period it’s designated for. It can also be stated as paying rent in advance.
In most rental agreements, tenants pay their rent on a monthly basis (usually rent is due on the first of each month). But in some cases, a landlord may ask the tenant to pay rent upfront.
The amount of the requested prepayment can vary, from an additional month upfront to as much as the entire rental payment for the term of the lease.
Of course, legal limitations that may apply to how much prepayment is allowed. Let’s shift gears and talk about that.
What Are the Legal Restrictions That May Apply to Prepayment of Rent?
When it comes to prepayment of rental dues, the laws vary per country and per state.
If you’re having doubts about your landlord’s rent requirements, check your state’s rental laws. I have compiled landlord tenant laws for all 50 states (and DC), which you can access here.
According to some sources, certain jurisdictions like New York City do not seem to permit rental prepayments at all, although other sources seem to think it is limited to one month’s rent.
Other jurisdictions like Virginia allow a tenant and landlord to agree on any prepaid rent, but the landlord must put the money in an escrow account and only withdraw each month the amount that is due.
Florida also permits prepaid rents, but Florida Statutes require that the advance rentals must be placed in the same account as your security deposit.
Going outside the US, in England, there is no legal limit on the advance rentals that your landlord can charge. In New Zealand, it’s considered unlawful for your landlord to ask you to pay more than two weeks of rent in advance.
As you can see, there is a lot of variation among jurisdictions and things can get quite complicated.
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Why Do Landlords Ask Tenants to Prepay Rent?
Here are several reasons why your landlord would ask you to prepay rent:
1. Assurance of Rent Payments
Your landlord might ask you to prepay rent as a form of assurance. This might be the case if you’re unable to provide your landlord with proof of your income. The same applies if you’re unemployed. Prepaid rent lessens or eliminates the risk of non-payment.
In some cases, the tenant’s credit may be poor or they may be currently unemployed. Both situations can cause a landlord to be apprehensive about whether they will pay rent on time. Asking for prepaid rent is one way to make sure that the money is ready to be applied to rent.
Some situations where prepaid rent is requested include foreign nationals who do not have a US credit history or a US job, military contractors who earned a lot of money working overseas but are currently back in the US and do not have a job here, etc.
2. No Rental History
Rental history with no issues is proof to your landlord that you’re capable of being a responsible tenant. If it’s your first time renting a unit, you won’t have a rental history. Your landlord might request prepaid rentals to prove that you’ll be able to pay your rent.
3. Easier Rent Collection
Your landlord might even offer a discount if you prepay several months in advance. Your landlord saves time and effort when you do this. It’s easier, simpler, and faster than collecting the rental every single month.
4. Credit Check or Screening Issues
Landlords usually have a process for screening prospective tenants of a unit. They might check your credit score. Your landlord may also ask you to fill out a rental application form containing your residential and work history.
If there is an issue with your background or credit score, your landlord might resort to asking you to prepay rent.
How to Respond to Requests For Rental Prepayment?
If you are faced with a request for prepaid rent, but don’t have enough money to cover the request, don’t lose hope.
Here are some tips you can use to negotiate with your landlord:
- Ask for a lower amount, but agree to a higher monthly rental payment. Explain that you do not have enough for the entire prepaid rent, but offer to pay more each month. This might be attractive to the landlord because they will make more money in the long term
- Offer to sign a longer term lease. Many landlords hate vacancy because it is costly and a hassle. If you offer to sign a long term lease, they may be willing to concede on the prepaid rent point because they not have a tenant that will stay at the property for a long time.
- Add a guarantor to the lease. In most cases, landlords are worried about credit and income when they ask for prepaid rent. But if you can offer a guarantor who has solid credit and a steady job, that may do the trick.
- Offer to do your own repairs when they come up. Many landlord hate getting calls about repairs. It is a pain and costs them money. If you are handy and can do most repairs, you can offer this to your landlord in lieu of the prepaying rent. Note, you are not asking for a discount on rent – you will still pay it. You just won’t be prepaying it upfront. That’s pretty good value for your landlord and they may accept your proposal.
Final Thoughts
So there you have it – an answer to whether your landlord can ask you to prepay rent, including legal restrictions, a discussion of the reasons for this type of request, and tips on how to respond.
Hope this has been helpful and happy renting!