We’ve partnered up with Let Alliance to offer an alternative choice for landlords and tenants to the traditional tenancy deposit.
Prior to agreeing a tenancy, our standard practice is to request a deposit from the tenant, being the equivalent of 6 weeks’ rent, together with the pro rata for the month. Where the tenancy start date falls within the last week of any given month, we will also request the full rent for the following month. The deposit is then lodged in a secure scheme, where it will be held until the tenant moves out of the property. Should there be any arrears or damage beyond reasonable wear and tear, we will look to claim the necessary amount from the deposit to cover these costs. If the tenant disagrees with the proposed deductions, the matter may be referred to the deposit scheme adjudicator for resolution.
The process of moving house can therefore be expensive, especially if the tenant is moving from another rented property, and has not yet had their previous deposit returned to them. To potentially increase the appeal of a property and minimise void periods, we are now able to offer a more affordable nil deposit option for tenants. Instead of paying a full deposit, the tenant can pay a non-refundable service charge through the Let Alliance Scheme.
The advantages to the landlord of the nil deposit option include:-
- Guaranteed 6 weeks rent covered.
- Requirement for the tenant to have a sufficient liability insurance policy in place throughout the term of the tenancy, which provides up to £5,000 worth of accidental damage cover.
How does it work?
- Instead of paying a full deposit, the tenant pays a non-refundable nil deposit service charge, the equivalent of just 1 weeks rent + VAT.
- Throughout the tenancy, the tenant will have liability insurance in place – this will protect the tenant and the landlord against accidental damage to the landlord’s fixtures, fittings and furniture. The tenant will be encouraged to make a claim on their policies as soon as any accidental damage occurs.
- At the end of the tenancy, we will undertake a check out report, following which we will discuss any charges with the tenants and request payment.
- If the tenant does not make payment, we will submit an entitlement request to Let Alliance within 31 days of the check out.
- Let Alliance will contact the tenant and attempt to collect the charges. The tenant will have 14 days to dispute the charges, and have the option of submitting a formal dispute to an independent adjudicator, the cost of referring the matter to an adjudicator shall be borne by the tenant (£240 inc VAT).
- If the tenant does not dispute the charges or does not raise a formal adjudication, Let Alliance will cover the costs of any arrears/damages submitted within the entitlement request within 30 days of receipt, and will pursue the tenant for payment separately.
- If the tenant chooses to submit a formal dispute, the decision of the adjudicator will be upheld and if the tenant is unsuccessful, they will be liable for 100% of the charges and the adjudication fee. If the tenant is successful with a percentage of the charges, they will be liable for the amount stipulated by the adjudicator, plus the corresponding percentage of the adjudication charge. The landlord would be liable for the remaining percentage of the adjudication charge.
Our team of negotiators will be on hand to discuss the nil deposit option with our landlords when properties become available for marketing. This is very much an option for tenants, who may still prefer to use the traditional deposit route. If the nil deposit scheme is available however, we would discuss the advantages and disadvantages with them of both options, which can be found here.
If you would like to find out more about the Nil Deposit Option, please contact a member of our lettings team.