This article forms part of the K&G Lettings Limited Tenants guide series which aims to explain some of terms that you will encounter when renting a property. This article focuses on explaining one of the key documents when letting a property, the Standing Order Mandate.
1. What is a Standing Order Mandate?
A Standing Order Mandate is a document which gives a bank or building society permission to create a regular payment from a bank account. The date and amount of the payment is controlled by the account holder, and can not be changed without the account holder’s express permission. Standing orders are used by a range of organisations who receive regular payments from clients. Such organisations range from landlords to charities.
2. When is a standing order used?
A standing order is used to automate the regular payment for a good or service. Using a standing order removes the need to remember to make payments of the correct amount on the correct date. They offer a simple and easy way of managing the payment of important bills such as rent. Often, it is used by landlords or letting agents who receive a regular payment of rent from tenants.
3. How do I set up a standing order?
A standing order has to be created by the person who’s account the money will be paid from. Setting up a standing order can be done by post and depending on the accessibility of the bank account by phone or on the internet.
4. Information required on a standing order?
A standing order contains the information required to make a payment from one bank account to another. As a result a standing order often requires the following information:
* must be provided, other information is optional
4.1 Details of account holder paying the standing order:
Bank/Building Society name e.g. Bank of Bloggs
Bank/Building Society branch & address e.g. 1 hull city centre, HU1 1YZ
Contact details e.g. postal address, telephone number.
*Account Name e.g. Current account
*Sort Code e.g. 00-00-00
*Account Number e.g. 12345678
*Name, e.g. Mr joe bloggs
*Signature
4.2 Details of account holder receiving the payment:
Bank/Building Society name e.g. Bank of Bloggs
Bank/Building Society branch & address e.g. 1 hull city centre, HU1 1YZ
*Account Name e.g. Current account
*Sort Code e.g. 00-00-00
*Account Number e.g. 12345678
*Name, e.g. joe bloggs
4.3 Information on payment:
Amount (in words and figures)
Frequency of payment e.g. weekly, monthly etc
Date of first payment.
5. Can the amount taken from the account be changed?
The amount taken using a standing order can only be varied by the person who holds the bank or building society account. The organisations who receive the payment can not change any detail of the standing order. A change can be made by cancelling the 1st standing order and replacing it with a new one – don’t forget to include the necessary information, see ‘Information required on a standing order?’ section.
6. How do you terminate a standing order?
The account holder(s) is the only person who can change or terminate a standing order. Depending on the accessibility of the bank/building society account, a standing order can be terminated writing to the branch which holds your account or by internet or telephone.
7. What is the difference between a Standing Order and a Direct Debit?
The main difference between a standing order and a direct debit is that unlike a standing order, the amount taken using a direct debit can be varied by the organisation charging for the goods or service. An example of a payment by Direct Debit are utility and telephone bills. The use of these services may vary from month-to-month and as a result the bill may change on a monthly (or more frequent) basis. As the person agreed to the terms of the direct debit when they signed the mandate, the amount of the payment can be varied without, again, receiving the express permission of the account holder.
A direct debit allows organisations to change the payment amount without needing to continually get permission.
8. Are there alternative ways of paying rent?
Yes, there are alternate ways of paying rent, for example by cash, cheque or bankers draft. However, the method acceptable to the landlord is outlined in the terms of the tenancy agreement signed when the tenant began renting the property. This method should be adhered to by the tenant as payment in a different form could be deemed as breach of the tenancy and could lead to eviction. For more on tenancies, read the Assured Shorthold Tenancy article by K&G Lettings Limited.
9. Summary
In summary, the standing order is a simple and efficient method of making regular payments. The amounts and frequency are controlled by the account holder. A standing order often helps people to manage their money more effectively.
© K&G Lettings Limited 2010. All rights reserved. Never rely exclusively on our standard answers and general content. Always do your own specific research and seek professional advice. Always have the entire facts and all documents to hand before making any decision.
