Agents have been left asking if the Draft Tenant Fees Bill will make it impossible to take rent upfront.

Notes in schedule one of the Draft Tenant Fees Bill document list rent as a permitted payment, but say that if the amount of rent payable in one period is more than the others then it will be prohibited.

This has left some to question the future legality of taking all, or a significant portion, of rent upfront, as is often the case where overseas students have no guarantor in the UK.

Robert Bolwell, a senior partner at Dutton Gregory Solicitors, which runs the ARLA Propertymark legal helpline, told EYE that his reading of schedule one of the Bill was that landlords and agents will not be able to ‘frontload’ and hide fees in a first month of rent which is higher than other months.

But he added: “The question is, has the wording been so loosely put together that it may inadvertently stop those who take rental payments upfront?”

The part of the schedule under question says: “A payment of rent under a tenancy is a permitted payment. But, subject as follows, if the amount of rent payable in respect of any relevant period is more than the amount of rent payable in respect of any later relevant period, the additional amount payable is a prohibited payment.”

Lettings agent Paul Lee, of Paul Lee & Company, also raised the scenario: “What happens where a tenancy is agreed for a year if the tenant is self-employed, so instead of having a guarantor they offer to pay the landlord the first six months rent in advance and then monthly for the remainder of the one-year term. This is often the case as was the last three rentals we recently agreed.

“All of these tenants are over 30 years old and did not want to have to rely on a parent or reliable friend to act as their guarantors, and the landlords understood and were happy with the six months rent in advance as a sensible alternative.

“If the landlord is restricted to charging the same amount of rent each month, then we would not be able to agree the above terms.”

Other agents also expressed concerns.

Jon Werth, managing director of LiFE Residential, said: “We absolutely work like this with students from overseas funded by families or governments, especially in September, the busiest time of the year.

“It’s a method of showing good intention from an overseas tenant with no credit history in the UK.”

Agents discussed the Bill and this element at a north-west London ARLA Propertymark regional meeting last week.

Bolwell told EYE he hopes the schedule is made clearer when MPs look at the Bill during the commitee stage.

The Bill still needs to go through committee stage and both the House of Commons and House of Lords, so could of course change.

David Cox, chief executive of ARLA Propertymark, told EYE his reading suggests taking rent upfront would be acceptable.

He cited a further clause in the schedule that said: “Where the later relevant period is a different length of time to the earlier relevant period, the amount of rent payable in respect of the later period is to be treated as the proportionate amount of rent that would be payable in respect of that period if it were the same length of time as the earlier period.”

Cox said: “This means, if you take for example six months rent upfront, as long as the next period represent an equal monthly split, it will be fine.”

Cox added that ARLA Propertymark would be seeking clarity over payments in the event of a default by the tenant and whether agents could charge for a change of tenancy or sharer.