Can Landlords Force A Tenant To Set Up A Standing Order?


Landlord thinking about Standing Orders

Paying rent on time is important. Tenants who do not pay their rent on time could incur late fees, or worst still, they could receive an eviction notice if they are constantly late with their rent payments.

But can landlords actually force a tenant to set up a standing order to pay their rent on a regular basis to help avoid late payments?

Landlords cannot force the tenant to pay their rent by standing order. The tenancy agreement may advise that a standing order should be set up for convenience, and will confirm when the rent is to be paid, but the tenant can make their own arrangements as to how they pay their rent.

In other words, the tenant may elect to do so on their own accord, but it is not a requirement.

Landlords can request where the rental payment is to be deposited. And in most cases, it is far easier for the tenant to set up a standing order with their bank to pay the rent to the landlord on time and on a regular basis.

It saves the tenant from having to remember to make a direct deposit every time the rent is due, and reduces the risk of the rent not being paid on time.

The tenancy agreement will likely include language that requires the tenant to pay their rent on time and in full each month. If the tenant is consistently late with their rent payments, the landlord may pursue eviction proceedings.

It is reasonable for the landlord to request that a standing order is set up as it’s usually an effort to help avoid disputes and to ensure that rent is paid on time.

What Is A Standing Order?

A standing order is a type of bank account instruction that authorises a financial institution to make regular payments on behalf of the account holder. 

In the context of renting, a standing order can be used to ensure that rent is paid on time and in full each month.

Landlords cannot insist that tenants set up a standing order for rent payments, but it is generally in the best interests of both parties for the tenant to do so.

This arrangement saves the tenant from having to remember to make a direct deposit each time rent is due and reduces the risk of late or missed payments.

How To Set Up A Standing Order To Pay Rent

To set up a standing order, you will need to login to your online bank account and provide your bank with the following information:

  • The amount of rent you need to pay each month
  • The date on which your rent is due
  • A reference which will be provided by the landlord so they can track the rent receipts
Tenant setting up a Standing Order through online banking

Your bank will then make regular payments on your behalf, ensuring that your rent is paid on time and in full each month.

This arrangement can save you from having to remember to make a direct deposit each time rent is due, and reduces the risk of a late or missed payment.

Can A Landlord Set Up A Standing Order For Rent Collection?

Landlords cannot set up a standing order for rent collection, but they can request that the tenant make regular payments by standing order.

Standing orders can only be set up by the bank account holder, and they cannot be set up by the recipient. The landlord, however, will need to provide their bank details and a reference number to the tenant so the tenant can initiate the monthly standing order correctly. 

Standing orders typically include instructions on where the rent should be deposited and how often it should be paid. Once complete, and providing the tenants’ bank account has sufficient funds, it will ensure that their rent is always paid on time.

What Is The Difference Between A Standing Order And Direct Debit?

The main difference between the two, is who controls them. Standing orders are controlled by the payer, while direct debits are controlled by the payee.

This means that standing order payments need to be set up by the person sending the money, whereas direct debits can be set up by the person receiving the money.

To set up a Direct Debit, the tenant must sign a mandate allowing the landlord to deduct rent from the tenants account each month. The landlord will then be able to change the amount at their discretion. So with Direct Debits, the landlord is taking the money from the tenants account.

Standing Orders work in the opposite way, because this is when the tenant sends money to the landlord (i.e. sets up a fixed amount to transfer to the landlord each month), so no mandate is required, and the landlord has no control over how much is sent.

What Are The Benefits Of Having A Standing Order To Pay Rent?

There are several benefits of having a standing order set up to pay rent, for both the tenant and landlord:

  • It’s convenient. The tenant will know exactly where and when the rent should be paid in order for it to be paid on time;
  • It’s reliable. Once set up, the tenant will not have to worry about late or missed rent payments providing their are sufficient funds in their bank account when payments are due;
  • It’s secure. The payments will be protected by the bank if something goes wrong;
  • The tenant will not have to worry about any disputes with the landlord regarding rent payments;
  • The landlord will have peace of mind knowing that regular recurring payments have been set up to assist with the rent being received on time.

Rent Collection Services For Landlords

Some landlords choose to use rent collection services in order to have a third party manage the process of collecting rent from tenants. These services can provide a number of benefits, such as:

  • Taking on the responsibility of collecting the rent each month, so that the landlord doesn’t have to;
  • Providing a dedicated point of contact for tenants to discuss any rent-related queries;
  • Offering a variety of payment methods, so that tenants can pay in a way that suits them;
  • Chasing up late payments and issuing reminders, to help ensure that rent is paid on time;
  • Providing detailed reports on rent payments, so that landlords can keep track of their income.

Overall, rent collection services can be a great way to make your life as a landlord a lot easier.

If you’re a landlord who is considering using a rent collection service, it’s important to do your research and choose a reputable provider that will meet your needs.

I use OpenRent. Their ‘Rent Now’ package provides an optional rent collection service for a very small monthly fee compared to high street letting agents.

Cash Payments For Rent

While it is possible to pay rent in cash, there are several reasons why this may not be the best option.

For one, it can be difficult to keep track of how much rent is owed, especially if payments are not made on a regular basis.

Additionally, if the landlord needs to chase up late payments, this can be more difficult to do if rent is paid in cash as it will likely require travelling time to meet with the tenant.

And finally, paying rent in cash may make it more difficult to prove that the rent has been paid if there is a dispute with the landlord.

Tenant paying their rent in cash to the landlord

Overall, it is generally advisable to use another method of payment for rent, such as a standing order or bank transfer.

Is Rent Collected In Advance Or In Arrears?

Rent is typically collected in advance, meaning that you will pay for the upcoming month on or before the first day of that month.

For example, if your rent is due on the first of the month, you will pay your rent for the upcoming month of February by the 31st January or 1st February at the latest.

This allows your landlord to have the rent money on hand to pay for expenses related to the property, such as mortgage payments, insurance, taxes, repairs, etc.

Some landlords may give you the option to pay rent in arrears, which means you would pay for the previous month’s rent at the beginning of the current month. However, this is less common.

Conclusion

Setting up a standing order can be a helpful way for both the tenant and the landlord to ensure that rent is paid on time.

However, landlords cannot force the tenant to set up a standing order by threatening them with eviction or other means.

For landlords who don’t have the time, or don’t feel comfortable requesting and chasing late or missed rent payments, there are a number of rent collection services available on the high street and online.

Whichever method you choose, having a regular and reliable method of payment in place will help to maintain a good relationship between the tenant and landlord.

Andy Walker

A Property Investor and Landlord with over 18 years of experience, providing free education and helping others to start or improve their Buy To Let business. More info on my About Me page.

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