Higher Deposit Bond allowed?
With the law changing to only allow 5 weeks rent equivalent for a deposit, can this be contested with Local Councils’s?
One Local Council (LC) I deal with has a Deposit Bond system whereby the deposit is essentially guaranteed by them from day 1 of the tenancy. The deposit is paid back to Council by the tenant by way of a two year payment system.
Experience to date is that such tenants to date that need the Bond then get into arrears/trash the property so the Deposit never fully covers the arrears/damage.
Can I therefore ask for more on the Deposit Bond at the start? I am assuming that the Council can’t charge any more to the tenant (over the 5 week deposit ruling), but it may focus their attention if they knowingly pass me a ‘difficult’ tenant but refuse to tell me that in the first place? Almost like a DHP in advance, but for once in favour of the LL. Clearly no financial loss to them at all if tenant proves a good one, but financial security to me if they aren’t.
Anyone had any experience of this? Anyone approached their LC Housing Dept?
WP
4 comments on this article
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Member Since June 2013 - Comments: 3323 - Articles: 82
11:12 AM, 2nd July 2019, About 7 years ago
That’s my experience too:
Experience to date is that such tenants to date that need the Bond then get into arrears/trash the property so the Deposit never fully covers the arrears/damage.
Member Since May 2018 - Comments: 2529
12:12 PM, 2nd July 2019, About 7 years ago
Reply to the comment left by Mick Roberts at 02/07/2019 – 11:12You do have to wonder whether a tenant that cannot afford the deposit is a reasonable credit risk.
In terms of how the law has recently been changed, if you are only permitted to take the equivalent of 5 weeks rent as a deposit, if you have reasonable concerns about the risk of a valuable property in good condition being trashed then your only legitimate option is to raise the rent.
It might have been a fairer system and better for the tenant if you had been able to hold the rent down to encourage long-term lets, take two months deposit but return the deposit to them at the end of the tenancy at say bank rate plus a rate that was regulated to avoid usury e.g. central bank rate plus a % specified within a given range. That would have provided choice for tenants and security for landlords.
As it is, the only option that a landlord who maintains his or her property in good condition for the benefit of both landlord and tenant has is to raise rents.
Member Since March 2015 - Comments: 1980 - Articles: 1
1:11 PM, 2nd July 2019, About 7 years ago
Just get them (the LC) to be guarantors rather than offering a bond. If they won’t, then they don’t get the property.
Member Since May 2018 - Comments: 2529
2:30 PM, 2nd July 2019, About 7 years ago
Reply to the comment left by Luke P at 02/07/2019 – 13:11
Seems to me that being guarantors would be a good role for Shelter. 😉
At the moment the only options you have to reduce your risk when tenants trash the property, don’t clean it, heat it etc. are:
(a) Spend more on insurance (and pass on the cost in increased rent), and/or
(b) Raise the rent to get a higher deposit.