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  • Deposit Protection

    Insured schemes 6 month ASTs paying at renewal

    Hi,

    Some advice needed please on the insurance based deposit schemes. I prefer to use these for various reasons over the custodial scheme. With most tenants, I issue a 6 month AST initially. If things go well then probably 12 month or longer following that. I prefer not to let it go periodic.

    With the insurance based schemes, if the tenant signs a new lease at 6 months, you have to pay when you start, then again 6 months later. Following that, it’s not so bad for the longer leases as you only pay at the start of a new lease.

    I know it’s not a lot, but is there any way around paying twice during the initial 6 months ?

    Thanks
    Pete
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    Hi Pete

    Unfortunately not - we price based on the tenancy agreement term. There's nothing to pay additionally if the tenancy goes periodic on the same terms, but a new fixed term attracts another fee I'm afraid. Obviously, there are benefits to creating a longer term tenancy but as a landlord too, I understand the attraction of a short initial term which is then renewable.

    Sorry I can't help more

    Ben Beadle
    Director of Customer Relations
    TDS
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    Ben Beadle

    Director of Customer Relations - Tenancy Deposit Scheme

    http://www.tenancydepositscheme.com

    Pete,

    Each AST is a fresh contract.

    If you roll off an AST to a contractual periodic tenancy you do not have to deal with another fee as the existing contract continues.
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    John Corey 


    I host the London Real Estate Meet on the 2nd Tuesday of every month since 2005. If you have never been before, email me for the 'new visitor' link.

    PropertyFortress.com/Events

    Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: PropertyFortress.com/Ask-John to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.

    Hello,

    Once the tenancy goes periodic what protection does the tenant have for the deposit? Surely it can't be right if the protection expires with the policy?

    Tim
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    It's normally the case that you have to notify the deposit protection provider that the tenancy is going periodic. The deposit then continues to be protected.

    Thanks the replites above.
    John - I understand as above that you can allow the tenancy to become periodic and I won't have to pay the fee again. My problem is that I want the reassurance of a new tenancy agreement, and so do my tenants, but don't want have to pay again once the initial 6 months have expired.

    Pete
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