Zero Deposit – An Alternative Option for Rental Deposits
Tue 23 Oct 2018
Upfront deposits for house rentals are necessary as they protect both tenant and landlord, so long as they are registered and processed correctly. The large upfront deposit cost can be hard to find for many prospective tenants. This prohibitive system has come under scrutiny recently with the government focusing on making renting more affordable. Read more about the pros and cons of deposits here.
Pioneering A New Idea
Robert Oulsnam and Company is delighted to announce that we have partnered with insurance company “Zero Deposit” to offer this new scheme. What’s more, we are the first independent agency in Birmingham to do so, because we passionately believe in making renting more accessible.
What is the Zero Deposit Scheme?
A zero-deposit guarantee is a way for potential renters to significantly reduce initial upfront costs required to rent a property. Essentially, the tenant takes out a non-refundable insurance policy, typically the cost of a week’s rent. They also agree to pay for any damages incurred at the property. If a claim is needed to be made, the insurance company will pay out up to the value of 6-weeks rent.
I’m A Tenant – How Does the Zero Deposit Scheme Benefit Me?
It is quite likely that finding large upfront costs to rent a property is difficult. If you do have the funds, you’d probably rather the money remained in your rainy-day pot. Either way, it can be off-putting, which actually affects both sides of the fence.
The most attractive thing about the zero-deposit scheme is that these costs are immediately and significantly lowered.
With the scheme Robert Oulsnam offers through Zero Deposits, the following will apply:
You pay a non-refundable fee equivalent to one week’s rent. Your landlord gets a guarantee for the same amount as a 6-week tenancy deposit. You remain liable for any damage or financial loss due to them when you decide to move on. Zero Deposits are partnered with the tenancy deposit scheme (TDS) so any dispute is arbitrated with the same level of fairness.
If you leave the property with no damage, outstanding bills or unpaid rent then there’s nothing more to do. If there is any of that, you will need to reimburse the landlord yourself as you would in the traditional deposit system. If you refute the issue, the insurance company steps in, requests evidence from both sides and appoints an independent expert. As with the traditional TDS route, their decision is final.
· Pay Less Upfront;
· More freedom when moving to a new house;
· Majority of schemes also partnered with tenancy deposit scheme;
· Independently arbitrated in case of claim;
· Totally optional, but provides more choice;
· Doesn’t tie up your capital;
· Insurance policy cost is non-refundable.
I’m A Landlord – How Does the Zero Deposit Scheme Benefit Me?
As a property owner, the point of renting is to have tenants in residence at all times. No-one wants void periods and opting in to this scheme could help avoid that. This is a great way to make your property more attractive to potential tenants. The level of protection offered by the guarantee is the equivalent of a 6-week standard security deposit. Tenants remain fully accountable for any damages or unpaid rents.
As tenants remain liable for any damages or unpaid rents, anything due to you is settled by the tenant. If there is a dispute, evidence is sent for expert evaluation. If the expert finds in your favour, Zero Deposits settle the claim with you and recover the costs from the tenants directly.
· Speeds up rental process;
· Avoids void periods;
· Attracts a wider audience of prospective tenants;
· Reduces costs.
Zero Deposit Scheme at Robert Oulsnam Lettings
We have chosen to introduce this Zero Deposit scheme for tenants and landlords as we believe it offers great benefits to both parties. It’s important to note that each individual landlord will need to opt in to the scheme.
Lettings Branch Manager Laura Fiddes-Baron comments “We’ve chosen to use Zero Deposits because they are partnered with the TDS who we currently use with standard deposits. I can’t see a real downside to offering this to prospective tenants, but there are an awful lot of benefits to be gained on both sides.”
If you’d like to find out more or would like to offer this scheme on your property give us a call on 0121 445 7410.