Deposit protection- if paying deposit in instalments?

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  • SEB
    replied
    Originally posted by Ericthelobster View Post
    Just to be clear, they can pay upfront the first month's rent, plus a £500 deposit (which is already more than a month's rent - many or most landlords would accept that as a deposit anyway, but I choose to set ~1.5 months as a deposit). Any less than what they are proposing up front I certainly wouldn't entertain.

    They are a young couple, first home, and generated a good 'gut feeling' which personally I place a lot of emphasis on when selecting tenants. Of course they'd still need vetting. The property is unfurnished and I can understand that they'll also need to spend a fair bit upfront on furniture etc. So on the above basis, yes I'm prepared to contemplate some form of arrangement.

    People rent for various reasons.

    One of those reasons is because a person/couple haven't learnt how to manage money and/or they can't qualify for a mortgage because of their history. They may also have a bad payment/debt history.

    Obviously, I do not know if this applies to this couple.

    As someone whose fortunes have been at both ends of the wealth spectrum, I can understand people who are struggling.

    However, as a private landlord, you are not a charity and your considerations are 100% financial.
    Therefore, unless you have a pigsty or a property in the middle of nowhere, I don't know why you would take on such a risk.
    They are already telling you they have money problems. If 2 devoted people can't raise enough together to pay your deposit, I would take a guess that they aint gonna make it as a couple.

    If you cross the line about feeling sorry for people, however well meaning and however bad you feel for people, you can end up hurting yourself.

    I am not seeking to cast aspersions on the character of this couple - they could be as good as gold, but still not have a good prospect of paying you as per their commitment.

    I would get a referenced guarantor if they have one.

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  • mind the gap
    replied
    I agree; gut instincts can often be a good barometer. There's risk attached to everything, but from what you've said, this couple sounds worth taking on.

    Hope it works out well.

    Leave a comment:


  • Ericthelobster
    replied
    Originally posted by SEB View Post
    How can you describe such people as "a good bet" when they are struggling from the getgo?
    Just to be clear, they can pay upfront the first month's rent, plus a £500 deposit (which is already more than a month's rent - many or most landlords would accept that as a deposit anyway, but I choose to set ~1.5 months as a deposit). Any less than what they are proposing up front I certainly wouldn't entertain.

    They are a young couple, first home, and generated a good 'gut feeling' which personally I place a lot of emphasis on when selecting tenants. Of course they'd still need vetting. The property is unfurnished and I can understand that they'll also need to spend a fair bit upfront on furniture etc. So on the above basis, yes I'm prepared to contemplate some form of arrangement.

    Leave a comment:


  • SEB
    replied
    Originally posted by Ericthelobster View Post
    I'm thinking of offering an AST to a couple who are struggling to raise the full amount of 1 months' rent (£480) plus the deposit (£700) in advance. This does go against the grain for me but I feel that otherwise they are a good bet, and that if they can provide £500 deposit, plus top it up by £50/month for the next four months, that will be OK.
    How can you describe such people as "a good bet" when they are struggling from the getgo?

    I wouldn't entertain the idea for one second. However, if you are really desperado and have no liabilities if they didn't pay you for 6 months, that's your lookout ETL.

    Leave a comment:


  • mind the gap
    replied
    There's no easy way out of this!

    If you use their first one/two month's rent money as all/part of deposit and protect it, that's all fine and dandy - but then they will live in your property for up to three months without paying any rent for it....which I'd be uneasy about.

    You can't let them start a tenancy without a deposit, either.

    Is it legally acceptable to specify that half the deposit will be paid on moving in and the other half after, say, three months?

    Lawyers, help!

    Leave a comment:


  • Drowning in debt
    replied
    I am in the same position, I have a couple who are moving in on AST, they are paying me £500 rent and then the deposit(£500) in two equal installments, one with the first months rent and then one with the second months rent.

    I am also unsure of how to go about protecting the deposit. What I have suggested is on the contract we state there has been no deposit taken whatsoever and then when they have paid the deposit in full, then look about how to best protect it, either by starting a new AST with deposit on and then protected.

    I suppose contacting the DPS for advice is the best option.

    I would not pay the deposit yourself, as in theory they can claim the money as theirs and they may not even pay you, with you losing out twice!

    Leave a comment:


  • Deposit protection- if paying deposit in instalments?

    I'm thinking of offering an AST to a couple who are struggling to raise the full amount of 1 months' rent (£480) plus the deposit (£700) in advance. This does go against the grain for me but I feel that otherwise they are a good bet, and that if they can provide £500 deposit, plus top it up by £50/month for the next four months, that will be OK.

    However, how would this work with regards not falling foul of the deposit regulations (I use the Deposit Protection Service)? Can you deposit an initial amount then top it up? If not I suppose I could deposit the full amount up front and have the tenants pay me back in the proposed installments, but that sounds a bit dodgy; eg if they didn't pay up?

    Alternatively I could reallocate the money they pay so that the full deposit is covered and registered, but they effectively only pay two weeks' rent and are so in arrears for the first 4 months until they've made this up. That option doesn't sound great to me either.

    Any thoughts?!

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