Tenant deposits - how are they structured to allow moving between tenancies?

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    Tenant deposits - how are they structured to allow moving between tenancies?

    hi, I have prospective tenants who currently rent elsewhere and they have applied to take tenancy of my property. I was going to ask for a deposit to be paid prior to occupation (about 2 days earlier than move in date) - however the thought has occurred to me that their current deposit may not be released until after they leave their current property, and it has checked out properly etc. the two deposits combined amount to a considerable sum and I think it seems disjointed to expect them to be able to pay a deposit to me without them receiving their original deposit back? should I in fact only require a deposit on the day of move in along with first months rent? if their current property passes 'muster' then should they in fact receive their deposit back immediately on the day they leave and then pass it to me on the day the tenancy with me begins?

    have I missed something here in terms of how the schemes work?

    what do others do if the circumstances are as I have outlined as it must be a regular/common occurrence?

    #2
    Fraid not. They won't get the deposit back for over a fortnight after they move out.

    You could do what I do, and not take a deposit. (I charge a slightly higher rent to offset damage.) Would they go for that if you have already agreed terms?

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      #3
      I agree. Although it is a pain for tenants to have to find an extra lump of cash to tide them over until they get their previous deposit back, it is I'm afraid something they just have to budget for when renting a home. If they really cannot afford this and have no means of borrowing a few hundred for a few weeks, I would question their ability to afford the rent and other outgoings.

      With students, it's usually the Bank of Mum and Dad (she said, from experience!)
      'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

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        #4
        ok, thanks to both replies, its a lot clearer now - guess its just the way it is!!

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          #5
          Surely you don't refund the deposit on the same day that the tenancy ends? Don't you wait a few days at least to assess possible damage or liabilities etc, even if nothing is obvious on the last day of the tenancy at check-out?

          As to your question , it's not your problem, it's the T's problem. Maybe they have to borrow for a week or two to fund the deposit, maybe they don't - who knows.

          Whatever you do, don't grant a tenancy until you receive the rent in advance and the deposit in cleared funds. If you tell the T that you're happy to wait until the previous deposit is refunded, then there will be nothing you can do if they don't stick by the agreement to pay it.

          And it's not necessarily anything to do with 'how the schemes work'. If the LL/agent holds the deposit and it's protected by TDS or MyDeposits, there is technically nothing to stop them releasing the deposit at any time they want.

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            #6
            ok, so re the 'timings' - do I get the security deposit and first months rent on the day of the tenancy agreement commencing (PRIOR TO THEM MOVING IN OF COURSE) or one or two days prior? what is the usual sequence?

            Westminster, I am a new landlord so haven't refunded anything, but will take your advice and make sure I don't refund any deposits until everything has definitely checked out a couple of days after any tenants leave - though I would prefer them to stay forever LOL!

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              #7
              Normal procedure is to take both the deposit and the first month's rent in advance on the day they sign the contract - which in some cases (e.g. students outside London) can be quite a long time before the tenancy actually commences.

              Make sure you protect the deposit and issue the T with the Prescribed Information relating to then scheme you use, both within 30 days of receiving the deposit.
              'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

              Comment


                #8
                Originally posted by MisterB View Post
                its a lot clearer now - guess its just the way it is!!
                Yes, definitely - and don't let the incoming tenants try to convince you otherwise; they often attempt to make out it's very unusual and you, the landlord, are being unreasonable.

                Originally posted by mind the gap View Post
                Normal procedure is to take both the deposit and the first month's rent in advance on the day they sign the contract - which in some cases (e.g. students outside London) can be quite a long time before the tenancy actually commences.
                Or it might well be the day they actually get the keys and move in - in which case the payment will be in cash

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                  #9
                  Originally posted by mind the gap View Post
                  Normal procedure is to take both the deposit and the first month's rent in advance on the day they sign the contract.
                  If that's also move-in day, it should be cleared funds.

                  Comment


                    #10
                    The way I do it is I have a series of documents to be signed/exchanged - and usually the last are tenancy & receipt for keys - and earlier on are receipts for rent & deposit, usually cash: No money, no signed tenancy...
                    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...

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                      #11
                      Additionally do not allow a deposit that is paid in installments. You may not actually get the installments and if you do then you have to protect each one within 30 days and re-issue PI.

                      If a T cannot stump up the cash then (for me personally) it shows lack of financial planning.
                      I'm a good tenant with great landlords
                      I'm also a living, breathing, fully cooked female.

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                        #12
                        OK, thanks for all the assistance. I have visited the prospective tenants at their current home (twice now - must think I am stalking them LOL) on todays visit I explained the situation re the original deposit and that they might not get that back in time 'just to pass it on to me' -I made it clear that I required the full deposit to be paid prior to them having any sort of access to the property. they were unaware of that potential delay, but are now!!! to be fair they said that at least they will know now they need to plan to make sure they do have the full deposit for me. we agreed on a moving in date, date for payment in advance on a monthly basis and saw original copies of birth, passport, utility bills and council tax bills in their names along with copy of current tenancy agreement - so I am happy with the paperwork, just need to submit it all tomorrow after they have paid fees for credit checks etc. I also spoke to my next door neighbour who is a plumber and does a lot of gas certificates for local landlords, including me now!. he knows the prospective tenants personally and is really happy its someone he knows and vouched for them (he used to date her sister years ago!), even though he also told me his sister was also now interested in renting it !!! we verbally agreed on my suggestion a seven month AST (is that ok?) as otherwise a 6 month one would terminate on 28th Dec, hardly a time to attract new tenants in my view should they decide to move on, though they have been at their current address for 3 years now and have indicated they would prefer long term agreement after the initial AST, so an additional month on the first AST to get over the clash of Christmas and potential new tenants etc seems to make sense

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