Smart Deposit invalidation?

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    Smart Deposit invalidation?

    Firstly I'm not sure if this is the right place to post this and I'm sorry for the long post, but I'm kind of lost:

    Signed a new tenancy agreement and moved in on the 12th (start date on the agreement). I decided to go with the smart deposit with the referencing company which is like an insurance for the LL and I paid £280.

    I paid the money before I moved in (10th) as requested, I moved in to the property on the 12th and now and the agent is telling me as they didn't pay the deposit until the 15th, the referencing company have voided the smart deposit. They said that they've paid after move-in day before and it's always been fine. They said to me because it's been voided I may have to pay for the full deposit now which is nearly £800 but advised I can avoid it by signing a new agreement showing the 19th as the move-in day. This would be to prove to the referencing company that we moved in after the move-in day which is untrue and seems fraudulent to me.

    I feel really uneasy about this and the agent is sounding very sketchy. As far as I'm concerned I paid on time as requested and I see no reason for me to sign a new tenancy agreement. I was told everything is okay so I don't understand why there's problems now.

    If I sign a new agreement, surely that means the old one is void and I may incur more charges? Do I have any legal obligation to pay for the full deposit when I've already paid the deposit and moved in to the property? The landlord is not aware about any of this to my knowledge.

    #2
    You should remove the name of the company from your posting.

    The £280 doesn't appear to be a deposit, but rather a non-refundable insurance premium. It couldn't legally be a deposit, because the company you name is not one of those that can protect deposits.

    I would say that if they voided the policy for late payment, the whole of the £280 ought to be refunded.

    Can you confirm that the insurance product was offered as an alternative to a standard deposit? It would be illegal if it were a condition for granting the tenancy with no alternative which was a permitted tenant fee.

    Comment


      #3
      I've removed the name of the company, thanks for the heads-up.

      You're right; it is indeed like an insurance policy and yes it was offered alongside the standard deposit.

      Where do I stand on the current agreement? Am I right on thinking my agreement is still valid as I completed everything I was asked to do - including paying the deposit before move-in day? I have all receipts acknowledged and signed for by the agent.

      Comment


        #4
        Originally posted by leaseholder64 View Post
        Can you confirm that the insurance product was offered as an alternative to a standard deposit? It would be illegal if it were a condition for granting the tenancy with no alternative which was a permitted tenant fee.
        Only in England, which OP also need to confirm.

        For your future reference OP, as a tenant, always go with the actual deposit option. You get those back, there's arbitration option if you dispute the amount of the deposit deduction, and you're not paying the premium for an insurance which if it ends up paying out go after you to recover its payout to the landlord. You are literally worse off in the long term in all scenarios.
        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


          #5
          Originally posted by RezzleDezzle View Post
          and the agent is telling me as they didn't pay the deposit until the 15th, the referencing company have voided
          Assuming you paid the money when you agreed to pay it over. That's their problem, not yours. You have a valid tenancy agreement. Hold them, well the landlord through them, to it.

          Originally posted by RezzleDezzle View Post
          including paying the deposit before move-in day?
          Stop calling it a deposit. Stop thinking of it as a deposit. You didn't pay a deposit. You paid landlord's insurance premium.
          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
            On further research, I can see no advantage and some disadvantage, to the tenant, unless they intend to do a successful runner! It would appear that, with this sort of scheme, the insurer can recover all their outgoings from the tenant.

            Comment


              #7
              I'm wondering if o/p's landlord got wind of this Smart policy, and reminded agent that he already said he did not want it.

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                #8
                This sounds like a c$ck up from the Agency and its their problem not yours. You should certainly not entertain colluding with falsifying documents to decieve an insurance company.

                Comment


                  #9
                  Thank you all for your replies.

                  Just to answer a a couple of requested questions:

                  1. I do live in England.

                  2. I'm not sure if the landlord has any idea that I've been asked to sign a new agreement, I'm also not sure if the landlord has even been told the insurance premium has been voided.

                  It's comforting to know my agreement is still valid though.

                  Would I be able to demand a full refund of the £280? I've been given the option to go for the protected deposit as well. Would I be able to ask for more time to pay the full deposit (maybe 2 months) - only the majority of my money has gone on the move and I'll be unable to pay the full protected deposit for probably 2 months at least



                  Comment


                    #10
                    Originally posted by RezzleDezzle View Post
                    Would I be able to demand a full refund of the £280?
                    Probably not.

                    Originally posted by RezzleDezzle View Post
                    I've been given the option to go for the protected deposit as well. Would I be able to ask for more time to pay the full deposit (maybe 2 months) - only the majority of my money has gone on the move and I'll be unable to pay the full protected deposit for probably 2 months at least
                    You can always ask, whether they will agree is a different question. But then again, you have no obligation to do anything. Your tenancy was granted on the basis that you paid the £280 insurance premium, which you did. What happens then between the landlord and their insurer is a matter between them to sort out.


                    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


                      #11
                      KTC; I couldn't ask for a refund on the grounds that the insurance premium I initially paid for has been voided? The agent would not be entitled to that money so I'd have thought it should be refunded?

                      I'll probably speak to the landlord about it, get his advice and see if he's aware. I really didn't want to because he's elderly but I guess it's for his protections as well as mine

                      Comment


                        #12
                        It seems my earlier message have failed to get through to you.

                        The insurance you're talking about IS NOT for your protection. The only beneficiary is the landlord (and the insurance company). If at the end of the tenancy you fail to return the property in the condition required and the insurer is required to pay out to the landlord, the insurer will sue you to recover that money. You DO NOT benefit from the insurance. The only thing you have done by paying that £280 is change who would sue you in the case you damage the property and don't pay for it, from an (elderly) individual to a well financed insurance company.
                        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


                          #13
                          Quite the opposite, I fully understood your earlier comments; but what you're stating only applies when the premium has actually been paid and accepted by the insurance company. In my case, as I have already advised the agent did not pay the premium on time and the company has allegedly confirmed in writing that it has been voided/invalidated.

                          Unless they're lying, there is nothing in place between the insurer/landlord/agent therefore the money I paid still remains with the agent. Should the monies have been paid on time to the insurer then there would be a valid agreement - but this not the case hence the reason for this post.

                          It is purely on those grounds I would have thought I'd be entitled to the money back- if they cannot secure the agreement with the insurer. I do not believe the agent is entitled to that money. I am not planning on simply getting the money back and not doing anything - I plan to put this money towards a protected deposit scheme.

                          Comment


                            #14
                            I think you can consider the £280 as a financing cost, like interest. It allows the tenant to avoid a cash flow problem, in the same way as taking out the deposit as a loan, but it at rather high effective interest rate.

                            Comment


                              #15
                              Originally posted by RezzleDezzle View Post
                              It is purely on those grounds I would have thought I'd be entitled to the money back
                              It seems to me that you have the following options:
                              1. Write off the money paid and do nothing further; you have fulfilled your part of the contract.
                              2. Agree to pay the requested deposit on condition that the money already paid goes toward that deposit; if they will not do that, then you do not agree..
                              In case 2 it would be unreasonable (imo) for agent to require you to pay it all immediately; you went for the other option because you could not afford the full deposit up front.

                              Comment

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