We'd recommend that you speak to your tenants about whether they would like to use our deposit replacement service or have a traditional deposit. Some tenants prefer to use a deposit replacement scheme because it means a lower up front payment. However, it is important that tenants are given free choice about which option they prefer.
Who can join our deposit replacement scheme?
In order to join the deposit replacement scheme the prospective tenant (or their UK-based guarantor) will need to pass our comprehensive reference check. If the landlord decides to provide the option for the prospective tenant to join the deposit replacement scheme when issuing the contract, the tenant will then be able to choose the deposit option they prefer between the standard safety deposit and the deposit replacement scheme.
What's the difference between the safety deposit and the deposit replacement scheme?
With our standard safety deposit the landlord can ask up to 5 weeks worth of rent upfront, the deposit will then be safely stored in our government-approved safety deposit scheme. At the end of the tenancy the landlord can claim none, some or all the deposit to cover the possible cost of repair, damages or unpaid bills. With our new deposit replacement scheme the tenant will only be asked to pay a week's worth of rent, afterwards the tenant will only need to pay an annual renewal fee of £30. The money paid by the tenant could therefore be considerably less at the start of the tenancy and the deposit will subsequently be insured. At the end of the tenancy the landlord will be able to claim up to 8 weeks of rent to cover the possible costs of repair, damages, or unpaid bills.
Deposit Replacement scheme
- One off payment of a week's rent made by the tenant(s) to the scheme provider, Reposit, at the start of the tenancy and then an annual renewal fee of £30.00.
- At the end of the tenancy the landlord can claim up to eight weeks' rent to cover the costs of any damages or unpaid bills during the tenancy.
- The insurance company would cover the initial pay out to the landlord and recover their costs from the tenant(s).
- The landlord and tenant(s) have access to the insurance company's free arbitration service in the event of a dispute.
- There is no cost to the landlord.
- A one off payment of up to five weeks' rent made by the tenant(s) before the tenancy starts
- Is protected by one of three government-approved deposit schemes. If you are using our Rent Now tenancy creation service we'll protect the deposit with mydeposits custodial scheme which is free for landlords.
- At the end of the tenancy the deposit is repaid to the tenant(s).
- The landlord can claim some, or all, of the deposit to cover the cost of damage caused by the tenants during the tenancy or unpaid bills.
- In the event of a dispute over the deposit the landlord can use the deposit scheme's free arbitration service to reach a resolution with the tenants.
The tenant can freely choose whichever service suits their needs best. The attractiveness of the deposit replacement scheme is that it can reduce the up-front cost to the tenant by up to 80% compared with a cash deposit. This makes the cost of moving into a new property more affordable.