Collecting your deposit through a third party

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    Collecting your deposit through a third party

    I have had some tenants taking out a loan to pay for the deposit. I am wondering if that is a red flag? Are there companies doing this already that I can speak to to arrange a loan for prospective tenants? What would you do if you were in my shoes?

    The deposit is still protected with the deposit scheme and I still have the money.

    #2
    The red flag is about the size of the Indian Ocean.

    Never take tenants who cannot pay the deposit (if you take deposits). And the person who paid the deposit is also a party to the deposit and has to be served with all sorts of information.

    Viable tenants these days need lots of money in the bank - not a requirement to take a loan to pay rent.

    No No No. But then you asked this already and were told no.

    See your other thread -- seems you are fishing for someone to tell you its OK -- you are not going to get anyone here saying that.

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      #3
      You have the money, but you don't have the right to use it, other than to earn interest, which the scheme is doing, instead.

      All the deposit tends to do is to show they have enough money to pay for any damage etc., but if they have to pay it back to a lender, they don't even have that.

      There is no law requiring you to take a deposit at all.

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        #4
        Originally posted by claira_notaguy View Post
        I have had some tenants taking out a loan to pay for the deposit. I am wondering if that is a red flag? Are there companies doing this already that I can speak to to arrange a loan for prospective tenants? What would you do if you were in my shoes?

        The deposit is still protected with the deposit scheme and I still have the money.
        Just increase the rent by 5% in lieu of deposit, and forget all this other nonsense.

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          #5
          Were they moving from other rented accommodation? It may have been some sort of bridging finance until their previous deposit was repaid. What did the credit check say about affordability?

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