Letting agent charging for deposit protection

badm88n

Hi,
Received a letter from letting agent informing me of a rent increase of £25 per month, come into the office and renew my fixed term tenancy agreement for another 12 months. Not a problem, neither is the £25 charge for renewing. What I DO OBJECT TO however is the letting agent asking that I pay $45 to cover deposit protection insurance

Is the letting agent allowed to pass on the cost of protecting my deposit? The deposit is held in an "insurance-based tenancy deposit protection" scheme. I think with this scheme you have to pay an insurance premium to protect the deposit. However I think this should be paid by the letting agent or landlord, not the tenant. It is my responsibility to pay a deposit, which I did when starting the tenancy, but not my responsibility to ensure it is protected.

Having gone back and looked at my original invoice I can see that they charged me £42 for the privilege of protecting my deposit. Not sure I can go back and claim this, but if it was illegal for them to do so I may try.

Let me know your thoughts please.

Gwhiz

He's having a giraffe!

robpw2

Insurance-based schemes:
• The tenant pays the deposit to the landlord;
• The landlord retains the deposit and pays a premium to the insurer – the key difference to the custodial scheme;
• Within 14 days of receiving a deposit, the landlord must give the tenant prescribed information (to be set out in secondary legislation) about the scheme being used;
• At the end of the tenancy, if the landlord and tenant agree how the deposit should be divided, the landlord returns all or some of the deposit;
• If there is a dispute, the landlord must hand over the disputed amount to the scheme for safekeeping until the dispute is resolved.
• If for any reason the landlord fails to comply, the insurance arrangements will ensure
the return of the deposit to the tenant if they are entitled to it.

BitterAndTwisted

If they've already charged you for protecting the deposit when you began this tenancy what's their justification for charging again? It's the same deposit, not another one.

To be fair that £25 charge for renewing the tenancy is a lot less than some agencies think they can get away with.....

sooz

If they are using the insurance scheme I think they need to buy a new policy if they give you a new AST. If it ran into a periodic they wouldn't have to.

Do you want another fixed term?

N79

It is neither illegal nor unlawful and since the charge is set out in the tenancy agreement if you sign then it is perfectly enforceable (leaving aside the issue of whether it is morally right). You could simply refuse to sign until the clause is removed from the agreement, although of course this would mean that you move onto a periodic tenancy and so the LL would only need to issue 2 months notice to leave.

N79

BitterAndTwisted wrote: »

If they've already charged you for protecting the deposit when you began this tenancy what's their justification for charging again? It's the same deposit, not another one.

New tenancy, new charge. This is how the insurance backed schemes work.

badm88n

N79 wrote: »

since the charge is set out in the tenancy agreement if you sign then it is perfectly enforceable

It is not set out in my tenancy agreement (sorry if it read like that), it was one of the costs listed on the original invoice together with first months rent in advance, admin fee, desposit etc. My tenancy agreement only states there is a £25 charge for renewal which I am not arguing.

BitterAndTwisted

Ah well, the precedent has been set by the OP signing the original agreement in any case. In the great scheme of things a £45 charge for the comfort of having a 12-month rental agreement works out at about 87 pence a week

badm88n

sooz wrote: »

Do you want another fixed term?

That's the other thing, I have told them I did not want another fixed term and they have agreed to amend the tenancy agreement before I sign. Not sure if they are switching it to a periodic tenancy or a fixed term with a ability to terminate on 1 months notice. Will check with them.

badm88n

BitterAndTwisted wrote: »

Ah well, the precedent has been set by the OP signing the original agreement in any case. In the great scheme of things a £45 charge for the comfort of having a 12-month rental agreement works out at about 87 pence a week

See my original reply to N79, I did not sign such an agreement.

It's the principal of having to paying for something the landlord/agent should be paying for. As I see it I gave them my deposit and THEY have to protect it, I don't care how so long as I don't have to pay.