Landlord - unusual Property agent reduced deposit scheme

scubascuba3

My new agent offers a Reduced Deposit Scheme, 500 rather than one month rent of 1200. Its marketed as being more attractive to rent. In addition there was meant to be a £50 monthly deposit paid by the new tenant. Sounds reasonable until i found out its not a deposit at all but a payment to the agent (from rent) who will cover 6 weeks max of dilapidation caused by the tenant.

I have a few issues with it:

1) it was disguised as a deposit which it isn't
2) no documentation including terms was provided
3) it's continuous so £600 a year
4) the cover is 6 weeks dilapidation only which may or may not have the £600 deposit taken off first.
5) in effect its very poor value insurance
6) Agent loves it because it nearly doubles their income.

So my questions are, any landlord got experience of this? Any thoughts on it?

Its opaque at best perhaps even shady. I discussed with another landlord who uses the same scheme and agent and they were unaware how it worked. Should be the next PPI landlord scandal

Pixie5740

scubascuba3 wrote: »

My new agent offers a Reduced Deposit Scheme, 500 rather than one month rent of 1200. Its marketed as being more attractive to rent. In addition there was meant to be a £50 monthly deposit paid by the new tenant. Sounds reasonable until i found out its not a deposit at all but a payment to the agent (from rent) who will cover 6 weeks max of dilapidation caused by the tenant.

I have a few issues with it:

1) it was disguised as a deposit which it isn't
2) no documentation including terms was provided
3) it's continuous so £600 a year
4) the cover is 6 weeks dilapidation only which may or may not have the £600 deposit taken off first.
5) in effect its very poor value insurance
6) Agent loves it because it nearly doubles their income.

So my questions are, any landlord got experience of this? Any thoughts on it?

Its opaque at best perhaps even shady. I discussed with another landlord who uses the same scheme and agent and they were unaware how it worked. Should be the next PPI landlord scandal

Is this £50 a month being touted to the tenant as a deposit?

How does the letting agency determine what 6 weeks of dilapidation looks like?

Why did you pick this letting agent?

The next PPI scandal? I don't think so. Landlord and letting agent is a business to business relationship rather than a consumer to business relationship.

You might find G_M's guide to Letting Agents: how a landlord should select/sack useful.

scubascuba3

Pixie5740 wrote: »

Is this £50 a month being touted to the tenant as a deposit?

How does the letting agency determine what 6 weeks of dilapidation looks like?

Why did you pick this letting agent?

The next PPI scandal? I don't think so. Landlord and letting agent is a business to business relationship rather than a consumer to business relationship.

An individual can be a landlord, doesn't need to be a business. Many are accidental landlords.

The tenant just pays the agreed rent, probably unaware this £50 monthly thing is going on, just that he got the deposit cheap at £500.

I was expecting to receive £50 less rent but was lead to believe it was monthly deposit

Pixie5740

scubascuba3 wrote: »

An individual can be a landlord, doesn't need to be a business. Many are accidental landlords.

The tenant just pays the agreed rent, probably unaware this £50 monthly thing is going on, just that he got the deposit cheap at £500.

I was expecting to receive £50 less rent but was lead to believe it was monthly deposit

It's still a business to business relationship. Many landlords are not accidental landlords despite what they might tell themselves. They actively seek tenants to live in the property and accept rent from them....that is no accident!

Lead to believe how? What do the contract you signed say about this £50 "deposit"?

scubascuba3

Pixie5740 wrote: »

It's still a business to business relationship. Many landlords are not accidental landlords despite what they might tell themselves. They actively seek tenants to live in the property and accept rent from them....that is no accident!

Lead to believe how? What do the contract you signed say about this £50 "deposit"?

You don't seem to have much experience, I'll wait in hope that someone does

Pixie5740

scubascuba3 wrote: »

You don't seem to have much experience, I'll wait in hope that someone does

:rotfl::rotfl::rotfl:

I'm not the eejit who signed a contract allowing the letting agent to deduct £50 a month from the rent that I'll never see again.

scubascuba3

Pixie5740 wrote: »

:rotfl::rotfl::rotfl:

I'm not the eejit who signed a contract allowing the letting agent to deduct £50 a month from the rent that I'll never see again.

You seem like the kind of guy that hangs around threads all day long trying to get their post count up. You haven't got any experience so goodbye and thanks for coming

Rosemary7391

scubascuba3 wrote: »

You don't seem to have much experience, I'll wait in hope that someone does

You'll be waiting a long time!

scubascuba3

Rosemary7391 wrote: »

You'll be waiting a long time!

Yes you are probably right, usually you just get pixi types who just ask questions and have nothing to add. No big deal i know what to do, i was just posting in case it was more widespread

need_an_answer

scubascuba3 wrote: »

Should be the next PPI landlord scandal

When was the last PPI landlord scandal?

scubascuba3

need_an_answer wrote: »

When was the last PPI landlord scandal?

See post #9, maybe you can go elsewhere and chat with pixi