Choosing the Deposit Protection scheme

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

    Choosing the Deposit Protection scheme

    I am going through signing a new AST with my tenant. I need to choose a Deposit Protection Scheme.

    Not having a need to protect the deposit in the past

    I need advice/opinion on which one to choose. There are three on the Gov site
    DPS
    MyDeposit
    TDS

    Once chosen which one is the best scheme Custodial or Insured based. Please relay your experience if you encountered them.

    MD are giving discount to NLA membered on Insured protection
    TDS are also giving discount to RLA members on Insured protection but they call it Depositguard

    Also if someone has had chosen the insured scheme and kept the deposit what
    1) What happens if we are unable to pay the tenant does the insurance cover that eventuality. IE if the LL/agent goes bankrupt etc and cant pay.
    2) If I choose the insured scheme and keep the money now and decide I want to pay into the deposit scheme later for eg to save form the situation of bankruptcy occurring, Can I pay the deposit into the scheme.



    #2
    Another option. Don't take deposit. Much safer.
    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


      #3
      Originally posted by theartfullodger View Post
      Another option. Don't take deposit. Much safer.
      I agree its less hassle but how's that ok. In case there is rent arrears and/or damage by tenant how we are going to recover the money back.

      Comment


        #4
        Why would you be worrying about the financial health of the agent? If you're looking at schemes, I assume you're receiving the money. And if you are worrying about your own financial health, you should probably just sell the property.

        With custodial schemes, you have less scheme rules to worry about. You basically just pay the money over, supply the tenancy details and forget about it. It's not your money. You're not tempted to use it to help ease your caseflow. It's free to use.

        With insurance schemes, you have quicker access to it at the end if you and the tenant agrees on deductions, you don't have to bother with going through the scheme to get the money. It cost to use the insurance scheme, a fee each time you signed a new tenancy. You also have to remember to inform the schemes if and when the tenancy goes statutory periodic. The initial conditions of the scheme (which you are required to comply with per the deposit protection legislations) are more. If you fail to pay over the disputed amount of the deposit on request of the scheme at the end of the tenancy, the insurance will pay the money to the tenant, and then the scheme will chase you for the money, through court action if necessary.
        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.

        Comment


          #5
          Originally posted by KTC View Post
          Why would you be worrying about the financial health of the agent? If you're looking at schemes, I assume you're receiving the money. And if you are worrying about your own financial health, you should probably just sell the property.

          With custodial schemes, you have less scheme rules to worry about. You basically just pay the money over, supply the tenancy details and forget about it. It's not your money. You're not tempted to use it to help ease your caseflow. It's free to use.

          With insurance schemes, you have quicker access to it at the end if you and the tenant agrees on deductions, you don't have to bother with going through the scheme to get the money. It cost to use the insurance scheme, a fee each time you signed a new tenancy. You also have to remember to inform the schemes if and when the tenancy goes statutory periodic. The initial conditions of the scheme (which you are required to comply with per the deposit protection legislations) are more. If you fail to pay over the disputed amount of the deposit on request of the scheme at the end of the tenancy, the insurance will pay the money to the tenant, and then the scheme will chase you for the money, through court action if necessary.
          Thanks KTC thats made my mind up I am going with custodial as I cant deal with more reg on insurance schemes.



          Comment


            #6
            DPS custodial works for me.
            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).

            Comment


              #7
              Originally posted by Singhno1 View Post
              I agree its less hassle but how's that ok. In case there is rent arrears and/or damage by tenant how we are going to recover the money back.
              You negotiate with tenant. If that fails you sue, hopefully small claims.

              Just as you would if deposit didn't cover arrears & damages (it happens, trust me)
              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


                #8
                Originally posted by theartfullodger View Post

                You negotiate with tenant. If that fails you sue, hopefully small claims.

                Just as you would if deposit didn't cover arrears & damages (it happens, trust me)
                Nope for me... cant hassle with chasing tenant and courts. According to what I read into the custodial terms if the tenant has left with rent arrears the money will go to the LL....

                KTC when I mentioned abbot the bankruptcy it is in hypothetical Q.. we don't know what is going to happen and in any situation in the future.... circumstances change. I don't know as whole lot of others with new tax change and Brexit coming up who knows what is out there for us.

                As I cant hassle with too much paper work and chasing individual I will go with less hassle as with custodial scheme.

                Thanks all for making my mind up....

                Comment


                  #9
                  Originally posted by Singhno1 View Post
                  if the tenant has left with rent arrears the money will go to the LL....
                  Only if this is specified in the tenancy agreement.

                  Comment


                    #10
                    Originally posted by Singhno1 View Post

                    Nope for me... cant hassle with chasing tenant and courts. According to what I read into the custodial terms if the tenant has left with rent arrears the money will go to the LL....
                    That is a hell of a big deposit if it is going to cover 10 month's rent arrears, eviction costs and full renovation of a trashed property.

                    Comment


                      #11
                      Originally posted by Singhno1 View Post
                      Nope for me... cant hassle with chasing tenant and courts. According to what I read into the custodial terms if the tenant has left with rent arrears the money will go to the LL....
                      If the tenant dispute the deductions and does not agree to adjudication, you'll still have to go through court before the scheme would release the money.
                      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.

                      Comment


                        #12
                        Unless you have a reason to want to hang on to the deposit yourself, just choose a Custodial scheme.
                        Register online with someone ( I use TDS)
                        Take the money,
                        Log on and customise the paperwork so it refers to the paragraph in the AST, the address and the tenant
                        Send the money to the custodians
                        They send back the receipt & legal paperwork all personalised
                        You print off & give the paperwork to the tenant.

                        Relax.

                        Comment


                          #13
                          If you can't be arsed with Deposit schemes or Courts, why be a LL?

                          Comment

                          Latest Activity

                          Collapse

                          Working...
                          X