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  • Deposit Protection

    Commercial rent deposit problem

    I am ready to complete the purchase of a commercial investment property.The tenant has provided a 3 month rent deposit that the current owner will assign to me and i must undertake to put the deposit into a dedicated interest paying bank account.

    My bank have informed me that they can not open the dedicated account for me unless i am aurthorised by the FCA for handling client money.Any body else come across this problem

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    Please quote EXACT wording of """...  dedicated interest paying bank account.   ...""  Depending on wording you might get away with just opening a savings account in your name somewhere which never has anything else put in it. 

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    You are not called Artfull for nothing that's exactly what i am going to do.

    Could the same law apply to residential landlords who hold tenants deposits?

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    "...Could the same law apply to residential landlords who hold tenants deposits?..."

    No, residential tenancy deposits are strictly regulated by rules that don't apply to commercial tenancy deposits.

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    Are you purchasing it under a company?
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    Saagar

    Disclaimer: I have no legal expertise nor am I a qualified advisor on any subject. A humble landlord using an open forum to exchange ideas and experiences. 

    Not sure if it helps in your circumstances but go with NatWest who will be more open to opening a business account for you and also a client money account to associate with it. It also pays interest so I think it will meet your requirements
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    Saagar

    Disclaimer: I have no legal expertise nor am I a qualified advisor on any subject. A humble landlord using an open forum to exchange ideas and experiences. 

    we purchase commercial deals in separate LTDs and just hold the rent deposits in the current account for that co.

    We have heard of people with long e.g. 10 year unexpired, leases in places, using the rent deposits for working capital.

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    In my case  a rent deposit deed exists that states the deposit must held in its own interest paying bank account.According to my bank(and i have not been able to confirm this) a regulation that a deposit must be held in this way was introduced in  2015.

    I have emailed the FCA and if and when i get a reply i will post it

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    You could open a free business account with lloyds/HSBC/Tide which will pay  interest
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