Zero Deposit Guarantee?

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    Zero Deposit Guarantee?

    I came across this on the NRLA website,

    https://www.nrla.org.uk/services/dep...n/zero-deposit

    As far as i can make out its a win win for landlords, zero prescribed information guff to serve, 6 weeks deposit instead of 5, no fees.

    has anyone used it before or offered it to tenants?

    Regards

    Darren

    #2
    Can't see how this is a win-win (except for the third party). Tenants pay 1 week of extra rent regardless of damages. You might as well just uplift the rent by 2%/year and take no deposit. It is like a mini mini rent guarantee insurance.

    And the arbitrators will not be independent (or will be even less independent than currently) - as they certainly have "skin in the game" (to use their words)

    Comment


      #3
      It's only up to 6 week's rent - not enough to cover my last loss. Would I have to then go through the pain, agony of cost of taking them to court anyway if it's more than 6 week's worth?

      Comment


        #4
        Has this been tested in court to see if it is or is not a "deposit"? £5 says it hasn't.

        Does the company indemnify you against claims from tenant it really a deposit? £5 says no.
        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


          #5
          The money isn't ever "received" by a landlord as far as I can see.

          I'd expect there to be a problem with the Tenant Fees Act if anything.
          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


            #6
            Originally posted by jpkeates View Post
            I'd expect there to be a problem with the Tenant Fees Act if anything.
            You cannot require T to take it out, but you can offer it as an alternative to deposit and let T decide.

            1Prohibitions applying to landlords

            (7)For the purposes of this section, a landlord does not require a relevant person to make a payment, enter into a contract or make a loan if the landlord gives the person the option of doing any of those things as an alternative to complying with another requirement imposed by the landlord or a letting agent.

            (8)Subsection (7) does not apply if—

            (a)the other requirement is prohibited by this section or section 2 (ignoring subsection (7) or section 2(6)), or

            (b)it would be unreasonable to expect a relevant person to comply with the other requirement.

            Comment


              #7
              Originally posted by MdeB View Post
              You cannot require T to take it out, but you can offer it as an alternative to deposit and let T decide.
              I agree with that.

              But it seems to me that preference might be given to someone who takes the insurance option, in which case it's not really a choice.

              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


                #8
                Defeats most of the object of taking a deposit in the first place.

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                  #9
                  I think it generally works out more expensive for the tenant - they get nothing back even if they leave the property pristine. I think many tenants don't really understand how it works and they would be much better served by borrowing the deposit if they haven't got it themselves.

                  Also, if your prospective tenant can't afford the deposit I would wonder whether they can really afford the house.

                  Comment


                    #10
                    Originally posted by jpucng62 View Post
                    I think it generally works out more expensive for the tenant
                    I would say almost always, because the company will chase the tenant for the payout, plus their costs.

                    The only tenants it might benefit are those with no money and no job, so no chance of recovery from them.

                    Comment


                      #11
                      Originally posted by dazwalsh View Post
                      ... a win win for landlords,
                      Nope - a win-win for the insurers, and the agents will take a commission.

                      Comment


                        #12
                        Prob much better for LL to use a custodial deposit scheme?

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                          #13
                          I prefer the deposit situation, it gives the tenants a tangible incentive to return the property to you in good condition.

                          I don't like holding onto any of the deposit at the end of a tenancy if I can help it. I patch up myself where I can, but get someone in if it's beyond my capabilities. I always say, "I want to return your deposit in full, but if it's going to cost me, it's going to cost you".

                          My tenants usually have their next tenancy in force before handover (one reason that the lifetime deposit idea probably won't work), to allow them to move their things in 2 or 3 days. This means they have hundreds of pounds topping up their bank account if they leave the place in good condition. It has worked well for me so far.

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                            #14
                            A lose-lose for tenants as it's more expensive
                            .
                            .
                            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

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