Hi forum experts, Just re-leasing a residential property in vic, and tenants have offered 3 months rent up front to sure up their chances of securing the property. Given the uncertain economic times we have accepted the up front rent payment. Question : legally do these funds need to be held in trust like a bond and dispersed periodically or should our pm be transferring the full amount to the landlord? Many thanks in advance for your input.
Legally the funds should be disbursed to you unless you and your pm agree for the pm to hold some funds in order to pay for regular disbursements like council and water rates and for incidentals such as maintenance invoices. Allowing the pm to hold some funds is a prudent idea.
There is always a risk that the tenant/LL may need to terminate the lease eg offered social housing or nursing home or house burns down etc and you must return the the balance of the upfront payment. Park the money in your offset account but don't get tempted to spend it. It could be worse - linky
The funds should be disbursed to you, although I recently personally paid 3 months upfront as a tenant and I can tell that my agent is holding 2 months for some reason. As @Scott No Mates says, utilise the funds in your offset as thats a lot more useful than sitting in the agent's trust account.
