Jump to content

deposit scheme alternative


Recommended Posts

I am getting a new tenant and have looked into the new deposit scheme. I don't like the fact that the deposit cannot be used to recoup rent arrears at the end of the tenancy. Therefore a tenant could leave at the end of the tenancy and I would have to agree the deposit should be returned whilst I'm still out of pocket. I am thinking of starting the tenancy with two month's rent in advance, but then taking the rent as usual at monthly intervals thereafter. Then at the end of the tenancy which has two months' notice the tenant doesn't pay a final month's rent. Is this legal (in Scotland)? Short assured tenancy agreement states "if a deposit is taken" so it's not essential to take one at all.

Link to comment
Share on other sites

Don't do it, this type of scheme in different variations has been tried by many landlords since 2007 and there are a number of court rulings (some at the higher courts) where it has still been ruled as a form of deposit as protection against the tenants obligations. And therefore a deposit.

I don't know where you get the idea a deposit cant be used for rent arrears as it can.

Some council bond/guarantee schemes for HB tenants don't have a provision for arrears but some do so you need to read the agreement.

There are insurance policy's you can buy as an alterative to a deposit but then there is no incentive by the tenant to leave the property in a good condition.

The only ways I know of to avoid having to protect/take a deposit are:

1 Don't take a deposit

2 Have a council bond with a HB tenant

3 Live in the property as a live in landlord

4 Use an assured tenancy and not an assured shorthold tenancy but you wont be able to use a s21

5 Use an alterative insurance type policy

6 Add say a extra £25 to the rent without an deposit and if the tenant stays 2 years you have collected an extra £600. The longer they stay the better.

7 Have a good guarantor in place who you would chase for damages and or arrears.

You don't seem to be a experienced landlord so it may be best to use a good agent to start with.

If your property is in Scotland the rules are different so some/all of the above may not be relevant.

Link to comment
Share on other sites

  • 2 weeks later...


This topic is now archived and is closed to further replies.

  • Create New...