Jump to content

Possible mad solution to TDS


Recommended Posts


The deposits I receive I need to retain myself. I can't afford to keep paying £30.00 to guarantee or insure them. I can't put them into the free government scheme as many of my tenants are foreign and need the deposits usually on the day they leave, or even early to buy their plane ticket! And, obviously, in cash - not a bank transfer or cheque (not sure how the Gov will return deposits they hold... ANYONE KNOW???).

This law will also limit the tenants, both type of and amount of, that I will get. And the admin will be a massive pain!

I've read all posts accordingly and have come to the conclusion that all of the so-called "hare-brained" schemes (not my words!) will, when tested, prove to be defined as a form of deposit. Whichever way you cut it, it's a dressed-up deposit.

My thought is this:

Maybe we landlords should approach the tiger from behind - not head-on!!!

Currently, a tenant moves into a property, and he signs the lease. It is his agreement (with you) for that particular property, for that particular length of time.

What if, somehow, the deposits can "belong" jointly to the property and not just the individual. After all, you are really insuring against the property being damaged as well as gambling on the tenant not to damage it. There are two elements of responsibility in this equation.

If, legally, it could be argued that way, it would be possible to pay just once to register the deposit for the property with one tenant, and when that tenant leaves the next tenant merely purchases the "deposit" from him (or wherever the deposit is). If you return any deposit to to tenant A - do it out of your own pocket.

Tenant B is "signed over" the deposit by the landlord, who receives the (full deposit in) cash from Tenant B.

The landord has re-couped the damages he spent after tenant A has left and what's left is the remainder of your paid-in deposit anyway! The original secured deposit isn't touched, you, as the landlord, are still in control of damage payments, etc. and you don't have to keep registering and re-registering the same amount of deposit for the same property albeit a different name on the contract.

Have no idea whether or not this will work, but someone said the madder the ideas the better!!!

Let's hope I'm a loon.


Link to comment
Share on other sites

Hi Sash,

I see your angle, you would be in a scheme so you wouldn't risk a fine, If this transfer of deposit ownership didnt automaticly put an end to the original agreement you might have found a way to work this system more favourably. I understand the schemes are meant to be self funding, so it will be the scheme handlers loss (I'll be lossing no tears here then).

I am currently not taking deposits, opting instead to take the last four weeks rent in-advance, This mean's I will have to work out any claim for damages with the tenant by negotiation, as I have been letting properties for years without the need to hold back deposits so I see this as only a small problem with this, yet I feel more at risk, I am looking at other options. The one I think more likely will be to opt to reluctantly charge an admin fee of around £25 thus reducing the deposit costs to me.

Best of luck with your spin

Regards G

Link to comment
Share on other sites

Hi G - Are you going to be using 'rent in advance' for damages (if applicable)? If so, have you checked the implications of doing this? The reason I ask, rent in advance should not, as I understand it be used for damages - otherwise this is a deemed deposit - hence, caught by the scheme (and failure to register can mean big fines!) - although I am not an expert on this topic, I have put various scenarios past experienced letting agencies who have been working on the TDS since there were first rumours of its introduction.

If it looks like a deposit and smells like a deposit...

I do believe that the safer option for landlords feeling 'out of pocket' by the TDS, is to pass on an admin charge to your tenant to cover the cost of putting into the scheme/ loss of interest - depending on the scheme you use.

Hi Sash - have you tried to register in the way in which you suggest? I understood that this was 'personal' and therefore, I cannot see that many TDS 'insurers' would allow that sort of scheme - partly as I understand that part of the point of TDS is to 'protect the tenant' and where is the protection if the tenants name is not specifically on the scheme - how can the tenant dispute a claim if their name is not shown with TDS? And secondly (and probably more the driving force!!) - I am not sure that insurance based schemes would happily run with your suggestion - they are a business after making money afterall!

Like I say, I am no expert, and so am only offering my opinion - please do try it if you want to - let us know how you get on... but I wont hold my breath.

OK, so no-one wants to 'pay for this' - but we have no choice but to implement it. I understand that the insured schemes aren't cheap, so in your case Sash, you may need to just hand the deposits over to the free service if you cannot afford the insured service. I note your comments, but ultimately any deposit that you hold, you should still have (I know some landlords 'dip in' but ultimately, if you have to repay the deposit to the tenant, then the money is surely available somewhere), and therefore, whilst there is an administrative burden, you have no choice but to abide - otherwise you risk hefty fines. We are all unfortunately in the same boat.

I do not understand how TDS would limit the types of tenants you can get? Most tenants would welcome the protection of TDS. And if there are tenants that are 'cash only' - are they as high a protection for you? Ultimately, yes, being a landlord is about having as few vacant periods as possible... but not to the detriment of the types of tenants you have. Are you really happy to take tenants who dont want to be in TDS? What are their reasons for ducking this government system?

...just make sure you are happy that you are as protected as you can be for those tenants wishing not to be in TDS

...just my personal opinion.... I am sure there are various views on this subject



Link to comment
Share on other sites


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

  • Create New...