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Tenant Deposit Schemes
 
 
Tenants:
From 6th April 2007, the Government is changing legislation to ensure tenants deposits are protected, so that:-
 
  1. The Tenants get all or part of their deposit back, when they are entitled to it
  2. Any disputes between tenants and landlords or agents will be easier to resolve.
  3. Tenants are encouraged to look after the property they are renting.

 The Landlord has the final choice on how they want the deposit to be held or have a suitable alternative to holding a deposit, as follows:-

PAYING A DEPOSIT

 

Custodial scheme – Citylets collects a deposit and then forwards the money to a government backed scheme. In the event of a disputed sum the Dispute Resolution Service will settle the matter and they have the power to delegate costs as they deem fit. Citylets will have to charge a small administration fee for processing deposit transfers.

 

Insurance backed scheme – Citylets retain the deposit.  . In the event of a disputed sum the Dispute Resolution Service will settle the matter and they have the power to delegate costs as they deem fit. Citylets will charge a small administration fee for this service but is expected to be less than the custodial scheme as interest on deposits will off set costs.

Alternative to paying a deposit 

PAY NO DEPOSIT OPT 1.

A guarantor can sign an addendum to your lease agreement. This clause guarantees the Landlord that any loss of rent or dilapidations (damage beyond wear and tear), to the property will be paid by the guarantor on behalf of the tenant. There is one off fee for this service.

 

PAY NO DEPOSIT OPT 2.

A guarantor can not be found. You agree to pay an advance rent of one month and one sixth of a months rent each month. Such that a rent of £500 PCM will be paid at £583.33 PCM and no rent will be collected in the seventh month and for the following months you will continue to pay £583.33PCM. There will be an administration charge for this service of 8.5% PCM meaning a total monthly payment of £590.41. The tenant will still need to complete a credit check and there remains a small fee for this service

Landlords

Under the new legislation, the landlord will ultimately have the choice to decide where the deposit is held or by choosing a suitable alternative to holding a deposit, as follows:-
 

USING THE CUSTODIAL SCHEME OR AN INSURANCE BACKED SCHEME?

 

You retain the right to issue all section notices as you would do normally.

 

The issue here is what may happen if any action is brought to the attention of the Dispute Resolution Service. We are led to believe that the Inventory will be greatly weighted such that the one produced without photographic evidence may not carry much weight.

 

In order to remedy this we have decided to create a new post of Inventory Clerk that will specialise in the photographic production of inventories.

 

If you require this service please ask to see our price list.

 

Alternatives as follows:-

 

PAY NO DEPOSIT OPT 1 & 2.

 

You retain the right to issue all section notices as you would do normally.

 

OPT 1 – You can seek satisfaction through the courts if necessary by pursuing a guarantor. You would have to pay for this yourself as we have no deposit to use to commence proceedings.

 

OPT 2 – We have no legal right to use an advance payment of rent to make good dilapidations. Though the money remains a bargaining tool and each party has the right to seek satisfaction via the courts. Citylets will likely require a letter of guarantee from the landlord to cover any legal costs associated with withholding an advance.

 

for further details please visit the following websites:-

 

The Deposit Protection Service 

www.depositprotection.com

Tenancy Deposit Solutions Ltd  

www.mydeposits.co.uk   

 

The Tenancy Deposit Scheme

www.tds.gb.com

 

Due to the new legislation regarding tenants deposits, if a dispute arises which cannot be resolved then the Deposit Resolution Service will intervene. The main document which they will look at will be the inventory/schedule of condition, which the tenant signed when they moved into the property. CityLets offer a standard inventory as part of the service, but we now offer a more detailed inventory for £30, which includes a breakdown of every single item in the property from doors to light switches. In addition, the detailed inventory will be supported by photographs. Please phone our office for further details.