Deposits to be capped
Published on Sat, 24th Jun 2017 10:00
In the Queens Speech on Wednesday (21/6/17) there was a small mention of tenant’s fees:-
'Proposals will be brought forward to ban unfair tenant fees, promote fairness and transparency in the housing market, and help ensure more homes are built' is what the Queen actually read out.
However, buried in the small print were the details and they are:-
as expected a re-affirmation of the commitment to ban letting agent, and landlord fees to tenants. This will be in the Draft Tenants' Fees Bill;
but not expected was the proposal to cap security deposits at no more than one month’s rent, and;
any holding deposits will also be capped, this time to not exceed one week’s rent.
It is absolutely correct that the deposit needs to be protected, as it is the tenant’s money being held by the landlord as security against problems. But the Southern Landlords Association has always been critical of tenancy deposit laws, which have had to be re-written several times. They are unnecessarily complicated, and very easy to fall foul of, leading to a potential ‘fine’ of 1 to 3 times the deposit amount – being paid direct to the tenant.
For some time we have advocated not taking a deposit but investigating alternatives. Two alternatives offered through the SLA are:-
rent protection insurance through Boswells Insurance Brokers – tel 01732 56 56 04;
or a novel scheme run by one of our corporate members Reposit. Here the the company Reposit charge the tenant 1 weeks rent, for which they cover the property for up to the value of 6 weeks rent. See their web site for more information.
Please note that the idea of taking two months’ rent, the first and the final rent has never been tested in court. Some barristers are convinced it is acceptable, others take a contrary view.