Is not taking a deposit a bad idea?

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    Is not taking a deposit a bad idea?

    Looking at the hassle involved with deposits, I am considering not taking a deposit when I take on the next tenant, does anyone think this is. a bad idea?

    Basically I can't see any advantage to be gained, the DPS involves so much red tape and looks stacked in the favour of the tenant, surely it would be just as easy to make a small claims for any damage?, perhaps the deposit money could be taken as an extra months rent in advance?

    #2
    protecting the deposit in 14 days isn't really a hassle compared to all the hassle that existed before 6th April 2007. Sure the legislation should have been better in order to avoid confusion about the penalties for non compliance but i think it's a good idea.
    ****************************************

    If you are unsure about what to do seek professional Legal advice.

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      #3
      Originally posted by House View Post
      protecting the deposit in 14 days isn't really a hassle compared to all the hassle that existed before 6th April 2007. Sure the legislation should have been better in order to avoid confusion about the penalties for non compliance but i think it's a good idea.
      but lets be honest, a lot of tenants assume that the deposit can be used as rent owed.

      Comment


        #4
        As an alternative to taking a deposit, only take tenants that can provide a parental guarantor. Most tenants are far more afraid of their parents than they are of you and the Small Claims Court combined.
        Health Warning


        I try my best to be accurate, but please bear in mind that some posts are written in a matter of seconds and often cannot be edited later on.

        All information contained in my posts is given without any assumption of responsibility on my part. This means that if you rely on my advice but it turns out to be wrong and you suffer losses (of any kind) as a result, then you cannot sue me.

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          #5
          A lot depends on tenant of course but it is always better to have a deposit than not, even if tenant is a good one to pay for things like inventory, professional cleaning etc. I had a good tenant last time and these were the only deductions i took. Had bad tenant this time who I was fortunate enough to get rid of with 2000 pound deposit still in tact. Will be using this to pay for one months notice not given, cleaning, extensive damage done to part of property, shortfalls in her rent during the five months she was there etc. The TDS scheme is not that difficult (at least i don`t think so) and they make a decision pretty quickly. I don`t think they are in favour of the tenant - they are impartial and look at the facts. This again is where a good inventory is worth it`s weight.

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            #6
            Alternatives to deposit?
            See http://www.landlordzone.co.uk/forums...ead.php?t=9002
            JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
            1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
            2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
            3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
            4. *- Contact info: click on my name (blue-highlight link).

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              #7
              Originally posted by jeffrey View Post

              thanks Jeffrey, very useful, decided im not taking a deposit next time but will take a larger proportion in rent up front.

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                #8
                My landlord didn't take any deposit. It's great! I actually respect him for trusting me that much so I will certainly feel obliged to leave the place as I found it.

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                  #9
                  I rented out my property to a "friend of a friend" who I thought I knew.

                  You never know anyone.

                  Now I might have trouble shifting them, as insurance does not cover damage by tenants I dread to think that Godzilla and Co. will do when push comes to shove, well through the courts but I would love to shove them into something very unsavoury!!

                  Comment


                    #10
                    Originally posted by porridge View Post
                    Looking at the hassle involved with deposits, I am considering not taking a deposit when I take on the next tenant, does anyone think this is. a bad idea?

                    Basically I can't see any advantage to be gained, the DPS involves so much red tape and looks stacked in the favour of the tenant, surely it would be just as easy to make a small claims for any damage?, perhaps the deposit money could be taken as an extra months rent in advance?
                    You should take a look at the Tenant Guarantee (TenantGuarantee.com). I think it's still advertised on the LandlordZone website.

                    After a lot of research, I contacted the company that provide the Guarantee and asked a lot of questions. All of which they could answer. I can't find anything wrong with the scheme, in fact it covers for far more than a deposit will.

                    I'm just about to sign up a tenant, and I'm going to take out a guarantee to cover the rent/damages and legal fees through them.

                    I'm a real virgin in the letting business, so I hope I'm doing the right thing. I'll let you know.

                    SarahJane.

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                      #11
                      I once let a flat to a friend of a friend. Should have smelt a rat (literally) as the scumbag did a runner owing me money & guess what? the friend didn´t want to get involved, never again. Shame as there are good & bad people everywhere.

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                        #12
                        deposit

                        since our beloved goverment caused more hassel and more paperwork by saying we cant take a deposit without Involving 3rd parties, we just ask for extra months rent in advance.
                        Opinions given are mine, They are not necessarily correct, as the more I learn the less I know, You should always seek professional help.

                        Comment


                          #13
                          Originally posted by welshgold View Post
                          since our beloved goverment caused more hassel and more paperwork by saying we cant take a deposit without Involving 3rd parties, we just ask for extra months rent in advance.
                          If two months' or more, you may have a problem.
                          JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                          1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                          2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                          3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                          4. *- Contact info: click on my name (blue-highlight link).

                          Comment


                            #14
                            Originally posted by welshgold View Post
                            since our beloved goverment caused more hassel and more paperwork by saying we cant take a deposit without Involving 3rd parties, we just ask for extra months rent in advance.
                            How do you work that precisely?, presumably two months rent in advance, but how do you organise it and get it into an AST (Hope that makes sense?)

                            Comment


                              #15
                              Originally posted by welshgold View Post
                              we just ask for extra months rent in advance.
                              But that will only protect against rent arrears until the end of month 2.

                              You also can't ask for 2 months rent to be paid in advance upon commencement and then ask for another month's rent at the end of month 1 and then continue demanding the rent monthly thereafter because the "spare" months money would, for the purposes of HA 2004 be deemed to be a deposit.
                              Health Warning


                              I try my best to be accurate, but please bear in mind that some posts are written in a matter of seconds and often cannot be edited later on.

                              All information contained in my posts is given without any assumption of responsibility on my part. This means that if you rely on my advice but it turns out to be wrong and you suffer losses (of any kind) as a result, then you cannot sue me.

                              Comment

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