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Zero Deposit has introduced no deposit by the tenant with only a annual fee payment of £26 Only.
Interesting concept but hope it does not effect landlord claiming against the protected "deposit". But I suspect it would as we are essentially claiming against the "insurance" company and not against the tenant.
How very clever, and what an imaginative way to get money out of desperate tenants. I can see there is a market for this but I do feel as though it's a cost disguised as a benefit that is targeted at the most vulnerable tenants.
LL need tenants with skin in the game.
A tenant would treat a £26 deposit insurance policy with contempt.
A tenant would just say before vacating after defaulting on the last months rent to go claim on the deposit insurance!
Every LL knows it would take time for any insurance claim to payout and no doubt the insurer would try to wriggle out of paying out.
The £26 is an annual administration fee, the initial cost is one week’s rent which is non refundable and the tenant is still liable for any damage.
Hi all, I'm a longstanding member here, but also a director at Zero Deposit so I hope you don't mind me responding to a couple of these points
Firstly, glad you find Zero Deposit interesting. We've worked with a wide range of landlords and lettings experts while developing the product and it has been designed to mirror the traditional deposit as closely as possible. There were a few questions raised in this trail that I hope to answer:
1. Appeal to tenants: our business and product is regulated by the Financial Conduct Authority and designed to be fair and transparent for both tenants & landlords. This brings a range of protections for our customers in additional to comfort that we are obliged by law to being very clear about what our product does, the costs involved etc. We speak to a large number of our tenant customers to make sure that they clearly understand that they remain accountable for the property, including damage and rental payments. Affordability is a real issue for many tenants, and even those who can afford it are simply preferring to purchase a Zero Deposit Guarantee rather than lock up cash in a traditional deposit. The key point is that we offer a choice to tenants who may buy Zero Deposit or continue with the traditional cash deposit.
2. Insurance company making a decision leading to delays or no payout: we are partnered with TDS who handle the adjudication process in the event of a dispute between you and your tenant(s). As such, the outcome will be the same as with the traditional cash deposit, with us paying out to the landlord within 48 hours of receiving TDS's decision. This means that landlords benefit from the security of every guarantee being underwritten by Munich Re, the world's second largest reinsurer, whilst not having to worry about negotiating their claim with an insurer.
3. Insurance: tenant(s) are not insured under our product. What is happening is that the tenant is purchasing a guarantee for the landlord that triggers if they do not meet their end-of-tenancy obligations, including cleaning, unpaid rent and damage (everything that is covered in the AST) - just as with a traditional deposit. Under our product the tenant absolutely has 'skin in the game' and their liability doesn't change - a feature of our product that is particularly appealing to landlords. If the tenant does not pay Zero Deposit then they may negatively impact their credit rating.
Additional benefits to landlords are improved marketing reach and speeding up the process both in terms of finding tenants, getting them in (less need to wait until payday) and resolving disputes at the end of the tenancy.
If you've any other questions please ask
I can pay my mortgage from a tenant deposit if they default by a 1 second transfer from one savings account to my bank account.
A lot quicker than any insurance claim.
There may well be a place for your offer.
Not for me though.
I require tenant real skin in the game.
So 2 months rent as a deposit is what I require.
I'm not handing keys over to a £300000 property for 1 months advance rent and a promised £26 deposit insurance policy.
Be interested to know whether the CRA accept your default information.
Would love to see you be successful using the civil recovery process as most LL like me don't bother as it rarely works.