Are deposits a pretence?

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    Are deposits a pretence?

    You guys have probably read at length of my frustration with the deposit system. You spend out hundreds of pounds in repairs, and are lucky to receive a few pounds in compensation.

    If you are actually relying on a deposit to compensate you for damage, you might as well not bother, as the amount you receive is likely to be less than the cost of the check out report.

    Therefore I've come to the conclusion that this whole rigmarole is just a pretence in order to persuade your tenant not to trash your property.

    Am I wrong?
    To save them chiming in, JPKeates, Theartfullodger, Boletus, Mindthegap, Macromia, Holy Cow & Ted.E.Bear think the opposite of me on almost every subject.

    #2
    It seems to have taken you a long time to reach this unhappy conclusion. You're right, it can be nothing more than an incentive to look after somewhere. For tenants who are prone to demolishing other peoples property, the loss of the deposit is nothing more than an occupational hazard in the same what that the full cost of repairs is an occupational hazard to landlords.
    Some you win, most you lose.
    I may be a housing professional but my views, thoughts, opinions, advice, criticisms or otherwise on this board are mine and are not representative of my company, colleagues, managers. I am here as an independent human being who simply wants to learn new stuff, share ideas and interact with like minded people.

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      #3
      The idea is that you have some of the tenant's money, which makes it easier to get what you're entitled to when there's missing rent or damage.
      It does work as a disincentive for most tenants to do damage, because they usually need the money back, if only to pay a new deposit.

      It won't work for smart but damage prone tenants who've figured out that the deductions are less than the cost of replacing or properly fixing something that they've damaged.

      Landlord's are entitled to the loss in value beyond fair wear and tear caused by a tenant - which will almost never be anywhere near the replacement cost.
      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


        #4
        Beyond damage, the deposit is also useful to recover rent and e.g. any council tax.

        If tenancy agreement is well-drafted these are debts that are not open to arbitration by the deposit scheme: either they are due or they aren't so it should be easier and quicker to recover from the deposit than trying to sue.

        Comment


          #5
          I would say...

          For normal people, the system works.

          The problems arise when you have sub-human or entirely unreasonable Tenants... and / or unreasonable Landlords.

          I suspect most people in the world fall into the "normal" bracket, but we've all got strange folk in our families, amongst our friends, at work... as Tenants or as a Landlord. These are the people who are nit-pickers, have OCD, will never lose an argument, see a slight or an injustice in everything, can't manage to live without destroying things (either wilfully or by accident)... they're in the minority, aren't they?

          I don't think it's a pretence therefore. I think it's a bit of an over-egged response to the problem of Landlords treating deposits as a perk of the job. I think if that problem never existed then there'd be no call for the idea... so obviously that problem was quite a big one. As yet, I've never had to go to ADR, I would probably try to avoid it through negotiation. I find it difficult to envisage a situation where I wanted all of the deposit and the Tenant wanted all of the deposit - I would need to go to ADR then - but you'd hope the conclusion would be an obvious one. But if we were arguing about £200 or something, I'd push for a while and then just give way and move on.

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            #6
            The real reason for the Deposit Scheme is because it allows the government to know exactly who is renting and who is due to pay taxes. Well that's my theory anyway :-)

            Comment


              #7
              JKO, perhaps you need to be choosier when sifting through your prospective Ts' applications.
              '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
                Thanks all.

                Can anyone come up with a lawful alternative that will not see the landlord being shortchanged every time someone moves out?

                The other day Artful mentioned a Scottish landlord who followed the American tradition of asking for 'First & last month's rent'. I don't think this helps much because of course the money has to be spent on the last month's rent or it becomes an 'unprotected deposit'.

                Any other ideas?

                Edit: Someone on another site suggests taking a cheque but not cashing it, or a credit card impression but not claiming any money until end of the tenancy. I wonder if this would work with Paypal. Any thoughts?
                To save them chiming in, JPKeates, Theartfullodger, Boletus, Mindthegap, Macromia, Holy Cow & Ted.E.Bear think the opposite of me on almost every subject.

                Comment


                  #9
                  All tenancy deposits have to be in the form of money.

                  We just have to accept that P&L doesn't work the same as cashflow.

                  If you pay for a new door which costs £1000, it will cost £1000 now, but be a great door for 20 years.
                  That door costs £50 a month.
                  If in 19 years time, someone breaks the door, we've lost £50, not whatever the cost of replacing it is in 2034 (because we've had 19 years of value).
                  Every year between now and 2034, that door costs nothing in money and £50 in P&L.

                  I'm not disputing that paying £1000 today is traumatic - but over 20 years its different.
                  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


                    #10
                    JPK, I do respect your opinion, and can see that you are intelligent and experienced in this area. Unless you are suggesting I re-purchase the whole flat every 20 years, I think you are wrong.

                    Several things that I had repaired & replaced don't 'wear out' like a washing machine or a carpet. A kitchen sink, a drawer, a bath or a door should last 50 years if they are cared for. Therefore someone having to replace or repair those items should not have their costs reduced by the amount of 'value' they have already had from the item, as there would ordinarily be no need to replace or repair those items during your ownership of the flat.

                    Anyway, I'm not asking about that now. I regard the adjudication system as hopelessly biased, and therefore I do not wish to engage with it any more.

                    I'm now asking for alternative ideas.
                    To save them chiming in, JPKeates, Theartfullodger, Boletus, Mindthegap, Macromia, Holy Cow & Ted.E.Bear think the opposite of me on almost every subject.

                    Comment


                      #11
                      Hey, I may very well be wrong.
                      Happens quite a lot.

                      I respect your position (and strength of feeling) so I'll leave the debate there.

                      Alternatives I don't have.
                      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


                        #12
                        Originally posted by Hippogriff View Post
                        I would say...

                        For normal people, the system works.

                        The problems arise when you have sub-human or entirely unreasonable Tenants... and / or unreasonable Landlords.

                        I suspect most people in the world fall into the "normal" bracket, but we've all got strange folk in our families, amongst our friends, at work... as Tenants or as a Landlord. These are the people who are nit-pickers, have OCD, will never lose an argument, see a slight or an injustice in everything, can't manage to live without destroying things (either wilfully or by accident)... they're in the minority, aren't they?

                        I don't think it's a pretence therefore. I think it's a bit of an over-egged response to the problem of Landlords treating deposits as a perk of the job. I think if that problem never existed then there'd be no call for the idea... so obviously that problem was quite a big one. As yet, I've never had to go to ADR, I would probably try to avoid it through negotiation. I find it difficult to envisage a situation where I wanted all of the deposit and the Tenant wanted all of the deposit - I would need to go to ADR then - but you'd hope the conclusion would be an obvious one. But if we were arguing about £200 or something, I'd push for a while and then just give way and move on.
                        I wonder if it would be worth making believe you had incoming and outgoing inventories but not actually going to the expense? Then protect the deposit with insured scheme. You'd still have the benefit of the incentive, and could use the deposit for any rent shortfall or agreed deductions, but save the cost of pointless inventories.

                        Any thoughts?
                        To save them chiming in, JPKeates, Theartfullodger, Boletus, Mindthegap, Macromia, Holy Cow & Ted.E.Bear think the opposite of me on almost every subject.

                        Comment


                          #13
                          I'm just going to play it by the book, I've not been burned yet so I don't feel the same way you do.

                          Comment


                            #14
                            Originally posted by Hippogriff View Post
                            I'm just going to play it by the book, I've not been burned yet so I don't feel the same way you do.
                            Thanks Hippo. What do you think of that as a strategy for me though? Is it necessary to provide the tenant with an actual inventory when they move in, or could I just imply that I'd taken one?
                            To save them chiming in, JPKeates, Theartfullodger, Boletus, Mindthegap, Macromia, Holy Cow & Ted.E.Bear think the opposite of me on almost every subject.

                            Comment


                              #15
                              Um, if you're asked for it what will you do? A dance to distract them as you sidle out of the door? Some Tenants might be green enough to not ask to see one... but if you're selecting only those green cabbage-looking Tenants, aren't they also often the most likely to cause loads of damage?

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