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  • Deposit Protection

    Zero Deposit - best new LL product in ages

    I can't speak for the other schemes, but when I heard about the one we use (ZeroDeposit).

    I thought it was the best new landlord product I've heard about in ages.

    Not for the reasons that ZeroDeposit themselves give (which aren't bad but didn't make me go 'wow'Wink but because as a landlord it removes a chunk of legislation that you have to comply with (deposit protection rules) and eliminates the risk of an opportunistic tenant being able to cash in because you had a bad day and forgot to dot an 'i' or cross a 't'.

    However landlord interest in it seems to be minimal thus far. If you have an opinion on why that might be, I'd be very interested to hear it.

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    Could it be that a prospective tenant, learning the fact they will not have to make a down payment (i.e. a financial commitment up front) is less likely to act in the same way as a prospective tenant, who knows very well they have a stake in the property that can only be returned if they take sufficient care of it before they leave?

    Just a thought....

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    Thanks very much for your feedback on PT deposit replacement partner, Zero Deposit.

    The benefit you mention of not being subject to the same legislation as a cash deposit was highlighted in this video as was the issue of tenants not "having skin in the game":


    See our other discussions on this topic:

    Smart landlords are using deposit replacement

    Deposit replacement is here - Zero Deposit

    Zero Deposit Schemes 

    Zero Deposits and Flatfair 

    Zero Deposit

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    Cheers. When they first approached us (maybe a year ago now, I can't recall) they hadn't thought of that angle (or at least didn't think it was worth mentioning to prospective clients), so good to see they've acknowledged it now.

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    That's a reasonable question, but it's made clear to tenants that they will be pursued for every penny of monies owed over the guarantee amount.

    Having watched many landlords over the years run out of willpower and let money owed to them by tenants slip away rather than go through the hassle of pursuing it, I'd be inclined to think that large company would do a better job of chasing debts.

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    This doesn't account for much and I would personally want my tenants to have their own money invested. That will always be a lot more personal.

    I've learnt in my years of being a landlord that nothing can ever be 'made clear' to certain type of tenants unless they are self-invested and have something tangible to lose.

    Also there are some tenants who tend not to really understand the implications of having a CCJ in their name until they actually have one. So it doesn't act as much of a deterrent as you think. (A bit like a teenager doing some petty crime and getting a criminal record that affects their future job prospects). Whereas the risk of losing money is something everyone can grasp.

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    I *nearly* agree with your second paragraph - in my experience (especially - but not exclusively - with properties at the very low end of the market) those tenant to whom things can't be 'made clear' don't think far enough ahead to consider the possibility of losing their deposit at the end of the tenancy.

    I agree completely with your third. However that doesn't challenge what I think I a core point: I believe you're more likely to get all the money owed to you (over and above the deposit amount) with a company like Zero Deposit doing the chasing than you are doing it yourself, or even with your rent guarantee insurance company doing the chasing. Without wanting to go off-topic I've been amazed (in a bad way) by how low the bar is set for giving up by the rent guarantee companies. Anyway I've yet to have anything to do with them chasing an errant tenant for money, so my 'feeling' might be wrong, but landlords themselves more often than not are just glad to get their property back and don't chase the debt.

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    I believe you're more likely to get all the money owed to you (over and above the deposit amount) with a company like Zero Deposit doing the chasing than you are doing it yourself, or even with your rent guarantee insurance company doing the chasing. 

    Do they chase for the money over the 6 weeks they have protected? I can't find anything about this on their website. I think you will still have to chase for this.

    Do you have to wait for the RGI companies to get the rent from the tenant before you are paid? My insurance policies (both landlord and RGI) payout  to me before they try to recover the money from the tenants.


    What happens of the tenant refuses to pay the annual fee due each year the tenancy continues.

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    So ZD only covers 6 weeks of rent then? Sounds about as useful as a chocolate teapot if that's the case. Someone could stay in a property not paying rent for up to 1 year but ZD only battles for the first 6 weeks, and then it's over to the LL to re-coup the rest? Or just pays out because it's the easiest option and it's on to the next, just a numbers game.

    Oooh, but the tenant will get a black mark against their name? Oooh, scary! In fact these are ZD's words about if the tenant doesn't pay them:
    "It is important that you do (*pay us*). If you do not we may pass your debt to a debt collection agency which could affect your credit rating. You may also be liable for the costs we incur engaging the debt collection agency."


    Having just checked the LL's FAQ I see it is just 6 weeks rent:

    https://www.zerodeposit.com/faq/#landlords

    What a load of CARP!

    I remember Paul Barrett mentioning many times a Tenant Passport: https://www.landlordreferencing.co.uk/pre...-passport/

    I see with the Tenant Passport: " This advantage insurance gives a landlord the benefits of £50,000 rent guarantee & legal expenses cover should you fall into unforeseen problems in the future. "

    Vs. 6 weeks rent.

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    The problem with the Tenant Passport is that you can't require the tenant to have one from 1st June.

    You can offer them the option to have one but as the other option is that you will pay for the referencing, I don't see many tenants taking up the option. If you pay for the passport, the tenant can use this to apply for another property.

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    " That's a reasonable question, but it's made clear to tenants that they will be pursued for every penny of monies owed over the guarantee amount. "

    Really?

    The ZD scheme hasn't been going long, wait until a fair few 'wrong uns' get wind that they can get a property and cancel their agreement with ZD and perhaps there might be a different story?

    Do you work for ZD as you seem to really like them? Your title seems like a sales headline.

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