Tenancy deposits increasingly don’t cover landlord claims

Tenancy deposits increasingly don’t cover landlord claims

0:03 AM, 14th June 2024, About 4 weeks ago 2

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The number of tenancies ending in disputes that cost more than five weeks’ rent from the deposit has risen, research reveals.

According to Reposit, a deposit alternative provider, the number of deposit claims that exceed the deposit value has risen from 13% to 17% this year.

The firm analysed its own data on tenancies that have ended this year.

It says that landlords are claiming more to pay for rent arrears or property damage.

However, Reposit also found that 49% of tenancies ended without any costs being incurred by the tenant.

Cash deposits don’t always offer protection

The firm’s chief executive, Ben Grech, says that cash deposits don’t always offer landlords with the level of protection they need.

He explained: “Our figures show cash deposits are now inadequate across a significant portion of the market and one which is growing, most likely caused by the cost-of-living crisis.

“This inefficiency is why we’re seeing a rising number of landlords and agents choose to offer our FCA-regulated product which provides landlords with eight weeks of cover – 60% more than the cash schemes.”

Extra three weeks of cover

Mr Grech says that lots of landlords find the extra three weeks of cover ‘reassuring’.

The firm’s insurance-backed product structure means that landlords are guaranteed payment if tenants owe any charges normally covered by a cash deposit.

Also, the tenant remains liable for any damage at the end of the tenancy, with any disputes resolved through an independent resolution service within 14 days.


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PAUL BARTLETT

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10:39 AM, 10th July 2024, About 3 days ago

5 weeks rent in the deposit system is a completely arbitrary amount, not related to the real cost of the damage done to the condition of your property.
Really bad law..

Reluctant Landlord

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14:45 PM, 10th July 2024, About 3 days ago

1. I don't want to be tied into having to use an 'alternative' provider.
2. The provider will only give the LL the extra cover (anything over 5 weeks standard) IF the tenant meets THEIR cover requirement.
3. set up fee for tenant £150.
4. More chance of a claim against deposit especially if tenant see it is not their own money at the end of the day so what have they go to loose exactly? All it does is make the LL work harder to prove if something needs to be deducted. How is this better for LL's exactly?

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