Deposit Protection for HMO. Is it a nightmare or am I doing it all wrong?

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    Deposit Protection for HMO. Is it a nightmare or am I doing it all wrong?

    I have a student HMO with 5 students on a single AST. I protect their deposits using MyDeposits with an Insurance based policy.
    It works fine so long as the students all sign-up at the same time and there are no changes of tenant during the term. Sadly, it's never quite that straightforward, requiring me to regularly use a Joint Tenancy Transfer form to notify MyDeposits of any change. Often we get some students sign up early and some at the last minute so the number of students and the total amount protected changes. This makes it extremely difficult to comply with the 30 day requirement to protect their deposit as the form has to be signed by me, the new and existing tenants (which can take weeks to arrange), sent to MyDeposits (who can take 2 or more weeks to repond), before it can be confirmed as Protected.

    MyDeposits say the best way to solve this is to give each tenant an individual AST but a). this would leave me at risk, should the tenant damage any of the common areas b). My mortgage provider and insurer insists on single AST for students c). I would have to pay the DP fee 5 times, instead of once.

    Does anyone out there have any advice to make this process easier and compliant?

    #2
    It seems to me that you are really running a multi-AST HMO but pretending it is a single tenancy one.

    I suspect the lenders and insurers are allowing a single tenancy one on the basis that all the people in the joint tenancy already knew each other. I wonder, if the issue actually became significant whether they would actually accept that an arrangement where the landlord finds tenants individually would actually accept that this complied with their requirements.

    With a joint tenancy, the tenants have rights to all the rooms and the whole tenancy comes into force when the first person takes up occupation.

    Even with a straightforward joint tenancy, changes are awkward. The safest way is to surrender the tenancy and start over with a new one with the new combination of people. The alternative is to assign the tenancy and have a private arrangement between the old and new tenants (which may have some people in common) as to how to deal with the deposit.

    It seems to me that a custodial scheme may be easier to handle in this case.

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      #3
      If you have separate tenancy agreements you would be responsible for council tax (and getting everyone to confirm they were exempt would be more admin).

      It doesn't mean that the tenants can't be jointly liable for damage in the common areas though.

      I think that the underlying issue might be that you're being too flexible.
      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

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        #4
        Forget about deposits IIWY. You'll never prove who caused a particular bit of damage, so what's the point?

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          #5
          As above, having students on a joint tenancy is usually a fudge for the convenience of the landlord. However, it is becoming increasingly inconvenient so I would recommend you bite the bullet and go for room only tenancies.

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            #6
            Originally posted by JK0 View Post
            Forget about deposits IIWY. You'll never prove who caused a particular bit of damage, so what's the point?
            Mattresses and room carpets.

            Comment

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