New Landlord Deposit Rules

thesaint

Guy_Montag wrote: »

I've left my deposit in lieu of rent in the past, because I didn't think I'd see my deposit again - the place was a shithole when I arrived & no better or worse when I left, the LA was very dodgy too. But there's a big difference between leaving one month's rent equivalent for one month's rent, to leaving one months rent equivalent for two months - & I really don't understand how you make that leap. I don't see the logic you're using.
The logic is simple. Bad tenant will not pay rent to the equivalent of the deposit held in the scheme.
As for the disputed deposit, as I understand it any money undisputed is paid to the tenant after 10 days or so. Then it goes to arbitration over the remaining sum. This seems a far more sensible system than the LL holding all the money even if there is only a small amount disputed.
The current system allows for all of this apart from the arbitration, so the arbitration actually adds to the time if it goes to court.
What's the administration charge associated with the deposit protection scheme? Or do you mean 5 minutes of your time to register online & do a bank transfer?
If you can administer the deposit protection scheme in five minutes and all for £15, PM me your address and you can work for me. Actually if I am paying you £15 take as long as you like. I will double your rate if it goes to arbitration.
Finally I agree with the point Generalli was making, you can add an extra charge to the rent to "compensate" yourself for this, but if your competitors don't you'll end up with a lot of voids. Any landlord knows this, My market can take it

Like I say, if the tenant had to do the work and compensate me for not complying I would be more than happy. Money for nothing.

Guy_Montag

thesaint wrote: »

Like I say, if the tenant had to do the work and compensate me for not complying I would be more than happy. Money for nothing.

It's your job not the tenant's; who's providing the service? You, by letting the place out, or the tenant by renting it from you. :rolleyes:

thesaint

Guy_Montag wrote: »

It's your job not the tenant's; who's providing the service? You, by letting the place out, or the tenant by renting it from you. :rolleyes:

We are on the same track now.

I am providing a service that I do not wish or require as a means to secure tenants money. It is of no benefit to me.

The fact that I am providing a service, requires me to get paid, hence my tenants will be paying for it. Not rocket science.
:beer:

peter999

thesaint wrote: »

We are on the same track now.

I am providing a service that I do not wish or require as a means to secure tenants money. It is of no benefit to me.

The fact that I am providing a service, requires me to get paid, hence my tenants will be paying for it. Not rocket science.
:beer:

Your wishes are not relevant.
Get over it.

It will become Law & is there to protect the tenant's money.

peter999

thesaint

peter999 wrote: »

Your wishes are not relevant.
Get over it.

It will become Law & is there to protect the tenant's money.

peter999

Your razor sharp observation is noted.

It will become law, tenants money protected, and I shall exploit it to make some more money.

Consider it gotten over
:beer:

franklee

thesaint wrote: »

If you can administer the deposit protection scheme in five minutes and all for £15, PM me your address and you can work for me. Actually if I am paying you £15 take as long as you like. I will double your rate if it goes to arbitration.

But your current rent+charges already include taking and administering a deposit, the DPS only adds a few minutes to this. If there is a dispute then that will take much more time but then that's the case now anyway, e.g. going the small claims route takes up both the tenant's and the landlord's time. I really can't see how the DPS adds more than a few minutes paying the money in and taking it out again

thesaint wrote: »

The interest returned is below the B.O.E base rate. So as a landlord, of no benefit to the current rules.

The DPS pays interest on the deposit at Bank of England base rate minus 2.32%. This is a far better return than I've ever got on my deposit to date of absolutely nothing. The 2.32% is used to fund the scheme so the scheme is FREE to the landlord as after all the deposit is originally the tenant's money. Seems fair to me.

But you are right this is of no benefit to the landlord to the current rules as currently the landlord keeps ALL the interest on the deposit. What exactly is the justification for this anyway as, especially if there are no deductions, the deposit money is the tenant's all along.

thesaint

franklee wrote: »

But your current rent+charges already include taking and administering a deposit, the DPS only adds a few minutes to this. If there is a dispute then that will take much more time but then that's the case now anyway, e.g. going the small claims route takes up both the tenant's and the landlord's time. I really can't see how the DPS adds more than a few minutes paying the money in and taking it out again
My current rent is based on a multitude of factors, if extra time is needed due to an added compulsory government scheme then my costs go up or my income goes down. I choose the former.
I do not currently charge my tenants any fees, when I next let out a property, I will have a £20 fee possibly more, I think i've underestimated how long it will take to register a deposit.
You say a 'few minutes' I say more, it does not matter which it is, I want paying.


The DPS pays interest on the deposit at Bank of England base rate minus 2.32%. This is a far better return than I've ever got on my deposit to date of absolutely nothing. The 2.32% is used to fund the scheme so the scheme is FREE to the landlord as after all the deposit is originally the tenant's money. Seems fair to me.
I see the advantage to tenants, never denied this. Interest on my money is something I would want if I were ever one. If the tenants AST states that Deposits are returned without the application of interest, what term is applied?
The scheme is free to the landlord, but at the risk of being boring, not free to administer.
But you are right this is of no benefit to the landlord to the current rules as currently the landlord keeps ALL the interest on the deposit. What exactly is the justification for this anyway as, especially if there are no deductions, the deposit money is the tenant's all along. As a landlord, I was quite happy keeping all of the interest to myself it was built into my business model, so it kept the rent artificially low. I now need to replace this revenue source.[/quote]

If the issue is the protection of deposits, what is wrong with my suggestion that if tenants want their money protecting that they register it and are punished for non-compliance?

Generali

thesaint wrote: »

My current rent is based on a multitude of factors, if extra time is needed due to an added compulsory government scheme then my costs go up or my income goes down. I choose the former.

I maintain that your rent is (should be?) what the market will support. If the market will support the extra charges you wish to impose for admin I don't see why you aren't charging this already. As a businessman I'd have thought you'd want to maximise your company's income.

thesaint wrote: »

The scheme is free to the landlord, but at the risk of being boring, not free to administer.

True but in the same way Tescos (for example) has to pay to administer Health and Safety, Maternity Leave, PAYE, VAT, Equal Ops &c.. They pass these costs on but still can't charge more than the market price for spuds if they want to keep selling them.

thesaint wrote: »

If the issue is the protection of deposits, what is wrong with my suggestion that if tenants want their money protecting that they register it and are punished for non-compliance?

Nothing at all. I would happily pay for my deposit to be protected under the current laws where my LL can deduct money from me willy nilly and I have to go through the hassle of suing them to get it back. That isn't open to me though and that it has never been suggests market failure to me. A huge body of company law has been passed in the last 150 years to protect the vulnerable from the rapacious.

franklee

thesaint wrote: »

If the issue is the protection of deposits, what is wrong with my suggestion that if tenants want their money protecting that they register it and are punished for non-compliance?

Actually I would be quite happy with that suggestion as it would mean that I, as a tenant, get to choose which scheme my deposit money is lodged in, can make sure it's done to my satisfaction and it would eliminate opportunistic extra charges being imposed on me. But that isn't the legislation we are facing.

What we are facing is better than nothing though, even at your proposed extra charge of £15 I would still be far better off than now as I will get some interest on my deposit money. Actually as you have stated your market can stand your £15 extra charge I don't see that you've any problem either. So we are both happy. Result!

thesaint

It has been heartening to see so much concern over my proposed £15-£20 charge being the straw that breaks the camels back in my business/investments.

I have not paid a penny in advertising in 6 years of doing it, so I am confident in my knowledge of the local market standing a small rise that all landlords will be incorporating one way or the other, whether it be by stealth or more upfront like myself.
The government require it to be by stealth so that tenants do not blame them for a rise in rents across the boards. Why else stipulate that landlords should not pass on the charge?

If the water rates in one of my properties went up by £15, I would not raise the rent by £15 immediately because there is no extra admin needed, I am already paying it, so there is no extra time required to pay it(apart from the time required to count the extra £15).

I have absolutely no problem with the tenants rent being protected, it is something that tars good landlords like myself unecessarily, having never had a complaint about deposit being witheld speaks volumes.
As all can see, I am strongly against having to pay for it myself. Off the top of my head, I can't think of my money protection being paid by the person doing the protection.

My suggestion about the tenant paying for the protection directly is obviously not a choice at present, I never implied it was. I was just making a point, that I believe the reason it was not an option is that tenants would be up in arms having to administer it and being fined for non compliance.

Some tenants would say "My landlord is someone that I trust, why should I be forced to wait up to 10 days for my money back, when he used to pay it back in cash on the day of checkout. How can I pay the deposit on my next property"?

If the £15 charge forces me on the Debt free wannabe board next year, be gentle.
:beer:
May I just add this, No one has answered what happens when the tenant has signed an AST that states their deposit is returned without the application of interest?