Tenancy deposit protection which one is best

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    Tenancy deposit protection which one is best

    hi there

    I am very new to this renting lark and have just put a tenant in a property i own.

    I have taken a cheque for his deposit and now need to place it in a tenancy deposit protection scheme. Can anyone recommend one of these as i am aware there are two types, a custodial and an insurance based option. Can anyone recommend which one is best and how do i transfer the cheque that i have into the chosen protection account.

    hope you can help

    #2
    They're all pretty much the same as far as I know. I think you really should have created the account prior to taking the deposit as the clock starts ticking from the day you receive the it. As long the 30 day limit hasn't passed you still have time so open one quickly and deposit it. I would recommend a custodial scheme.

    Comment


      #3
      Why have you installed a T with little or no experience?
      Renting is not 'a lark' and can be v expensive for the unwary LL
      'Act in haste, fall flat on your face.'

      Comment


        #4
        I like the insurace based scheme, although I have significant reserves, it means I have access to that money if necessary. I know one landlord who uses the insurance scheme and pays his deposits into his residential offset mortgage which helps him financially.
        "I'm afraid I didn't do enough background checks apart from checking her identity on Facebook" - ANON

        What I say is based on my own experience and research - Please don't take as gospel without first checking the gospel yourself.

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          #5
          Ugh, offset mortgage fine, but please don't use a tenant's deposit as operating fund.
          I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

          I do not answer questions through private messages which should be posted publicly on the forum.

          Comment


            #6
            if you extend your 'lark' into more properties, you might want to consider the option of not even taking a deposit with a slight increase in rent across the board??

            £400 deposit - £25 per year to protect it @5 years = £275 actual deposit held for you to cover damage etc

            increase in rent by £10 per month and no deposit taken @ 5 years = £600 in your account to cover damage
            etc (slightly more if your annual rent increase it percentage based )

            my method puts an additional emphasis of getting the right tenant - we're about to et our 6th property and had around 25 applicants. we invited 10 to view and selected one who we felt was 'our best fit'. we visited her at her current address to for the paperwork and see how she lives - so if she gets an acceptable (to us) result from tenant verify then we will allow her to take the tenancy.

            using an agent to get tenants and operating at arms length is not a good idea though if you don't take a deposit.

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              #7
              Basically the insurance backed scheme means you keep the money in your bank but pay a fee to do so.
              The custodial one means you transfer the money to them to look after.
              I use DPS.

              And I hope you’ve educated yourself on this “renting lark” as there’s hell of a lot stuff you need to legally abide by; not just finding a tenant and protecting their deposit.

              Have you issued Gas Safety Cert, EPC, How to Rent booklet for starters?

              Comment


                #8
                Originally posted by topguntone View Post
                hi there

                I am very new to this renting lark and have just put a tenant in a property i own.

                I have taken a cheque for his deposit and now need to place it in a tenancy deposit protection scheme. Can anyone recommend one of these as i am aware there are two types, a custodial and an insurance based option. Can anyone recommend which one is best and how do i transfer the cheque that i have into the chosen protection account.

                hope you can help
                Was rent paid by cheque also? Hope they don't bounce... I only allow people to sign tenancies & get keys when I have the ££££ in my bank account first. I'd not give out a property & keys for a cheque.

                As you are new to this "lark" (it can be anything but a lark..) suggest you do the intro landlord courses that both RLA & NLA do. It will save you more time & money than they cost you to do course.
                I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                Comment


                  #9
                  Originally posted by RedHitman View Post
                  Have you issued Gas Safety Cert, EPC, How to Rent booklet for starters?
                  Also Rent to Rent checks, potential civil penalty & criminal offence there!
                  I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

                  I do not answer questions through private messages which should be posted publicly on the forum.

                  Comment


                    #10
                    Going back to the original topic I like the DPS Insured scheme. I keep the deposit for a one off small payment.
                    It gives me more bargaining power at the end of the tenancy when there is damage. It works for me.



                    Freedom at the point of zero............

                    Comment


                      #11
                      Insured schemes requires LL to pay an annual Premium to maintain protection.
                      Given current low savings interest rates, I prefer the 'deposit & forget' Custodial Schemes.

                      Comment


                        #12
                        Originally posted by mariner View Post
                        Insured schemes requires LL to pay an annual Premium to maintain protection.
                        Annual premium??? Isn't it a fee per tenancy, regardless of how long the tenancy is?

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                          #13
                          Although I very seldom make deductions, as I try meet the tenant in advance of the tenancy ending and making my expectation clear. I also include the need for professional cleaning within the tenancy. I like the insurance scheme as if there are any deductions, I return the balance of the deposit after advising of any deductions and then it's down to the tenant to take any dispute directly to the scheme. Where two sets of tenant didn't agree to the deductions one for insufficient notice to end tenancy and the other for the lack of cleaning (pre professional cleaning) they never bothered to take it up with the scheme, even though I provided them with the information on how to do so.

                          Comment


                            #14
                            homework question? the instructions on each scheme's website aren't difficult.

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                              #15
                              i may be new to this 'lark', but i am pretty tooled up by now having sat all the courses, had all the certificates and as for the cheques off the tenant, he has been in the property that my family has owned for 24 years, is a professional lecturer at the university and has moved down from the top floor flat down into the first floor flat which has just had a major overhaul. So he is delighted as it was a studio flat upstairs and he now has a one bedroom flat with separate bathroom kitchen and living room. I say i am new because i am now the landlord and owner and now have to manage it from scratch. I am also leaning towards the insurance backed option as i can put the cheque into my bank and hold onto it. with the other option I have no idea where a lot of not my money is going!!! The scheme websites have no contact phone numbers to ring for advice and all sounds really sketchy yet hundreds of people use them on a daily basis so they cant be as sketchy as all that. Can anyone recommend one of these that they use on a regular basis?

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