No Rent in Advance Before Contract Signing: What Landlords Need to Know Under the Renters’ Rights Act

One of the more practical — and potentially problematic — changes under the Renters’ Rights Act relates to when landlords and agents can legally request and receive rent. The new rules state that first month’s rent and the tenancy deposit can only be requested after the tenancy contract has been executed. Crucially, the Act also makes it illegal to request or accept rent before this is the case.

At first glance, this sounds straightforward. But in practice, it introduces new risks for landlords, particularly around the timing of move-ins and the legal obligation to grant possession.

What does “executed” mean?

There had initially been concern in the sector that “executed” meant a tenancy would only be valid on the tenancy start date. If that interpretation were correct, landlords would be barred from requesting rent until the very day keys were due to be handed over — raising the worrying prospect of tenants arriving for check-in with no rent paid, and landlords having no safe mechanism to delay possession.

Fortunately, the government has now clarified the position:
A tenancy is executed once all parties have signed it, not when the term begins.

This helps, but it doesn’t eliminate the issue entirely. Under the new rules, landlords cannot request rent until after the final signature is in place — which in some cases may leave tenants only a small window of time to make payment before move-in day.

The risk: a binding contract without cleared funds

Once both parties have signed, the tenancy becomes legally binding. The landlord must provide possession from the tenancy start date, and the tenant must pay the rent “on or before” the due date. However, rent is not technically late until the following day.

This raises an important practical question for landlords:
Is failure to pay rent before move-in sufficient grounds to withhold the keys?

On one hand, the landlord has a contractual obligation to give possession. On the other, a signed agreement with no funds received creates an immediate financial and legal vulnerability — especially if the tenant simply does not pay.

At this stage, there is no case law to provide a definitive answer. Until the courts interpret the Act, landlords will need a robust, well-documented process for handling pre-move-in payments.

A clear solution: “keys released only on cleared funds”

To protect themselves, landlords should implement a formal policy stating that keys will only be released once the first month’s rent and deposit have cleared in full. This should be supported by:

• Explicit, unambiguous wording in the tenancy agreement
• A documented pre-move-in procedure shared with tenants
• A clear timeline for signing, invoicing, and payment

This approach allows landlords to argue that failure to provide cleared funds before check-in constitutes a breach of contract, giving them reasonable grounds to delay key release until payment is made.

Looking ahead

The Renters’ Rights Act will reshape many long-standing practices in the private rented sector, and the rules around rent in advance are just one area where operational habits will need to change. Until the law is tested in court, clear communication, watertight documentation, and proactive planning will be essential.

If you need guidance preparing compliant tenancy agreements or updating your move-in processes, the Goldsmith Property team is here to help.