UK Landlord Forum / Life

This is the first time I've taken on a tenant myself without an agency so I was wondering what is and isn't the 'norm'.  I have told the tenants I need a £100 holding deposit which I will use to pay for referencing & to put towards the deposit protection scheme cost.  Is this ok?  Is there a form I can use to give them as a receipt & also with a disclaimer saying it's non-refundable if their references are rejected for any reason?

Other than that I've said the deposit will be 1.5 months rent and also a month's rent to be paid in advance.

Any advice/tips would be much appreciated.

Hi there,

I think it is perfectly acceptable to charge a tenant for a reference. If you pay for it, and the reference is bad then a) you will not let them rent your property, and b) you will be out of pocket. Imagine having 4/5 couples viewing and expressing interest in your property - if you pay for all the credit references it is going to cost a lot!!!

But, having said all this I think £100 is way over the odds and you might be scaring tenants away..... credit references can be done online, get quick replies and cost up to £25 - see this link http://lovemypad.com/partners/    (Endsleigh are an established company and their credit referencing is powered by Experian)

In terms of deposit protection, this can be done completely free of charge - the Deposit Protection Service is what I use. It's very user friendly. Word of warning ( and you possible already know this) the deposit must be protected within 14 days of receipt and you have to tell your tenants where it is protected in writing!!

So, to summarise I think it's fair to charge for the credit reference, think you are being a bit pricey, and feel you should protect the deposit free of charge. It can only be good for your relationship with your tenant if you are completely upfront and realistic with fees.

Good luck!

Hi thanks for the feedback.  The reason it's £100 is that there are two tenants & one guarantor and I've been quoted £32 for each reference. 

PS!  I was under the impression the deposit protection cost £50 - the letting agents I used for the last tenants told me this to justify some of their fees!

The reason it cost you £50 to protect deposit last time is because you used a letting agent!! They get some sort of commission etc for putting the money into these schemes. Seriously, try the Deposit Protection Service - it is so easy, and free to use.

£50 to letting agency for doing naff all?? no thanks!

hi everyone,
i am a new londlord lady, i rented my property to 4 student, i asked for only one week deposit in total i have £490 since 30/09/20011, i just heard that i need to secure the deposit, i contacted "my deposit "and it will cost me the same or more money to secure can i leave the money with a friend who can write a letter certifying that she is holding the deposit secure for the tenant in her account to intil they leave and give them back teir money back.  bear in mind that i was wrong to ask for a week deposit but it is too late.

Hello Madina,

No.  Absolutely not.  You must get the moneyprotected by a government regognised scheme.  I use The Deposit Protection Service (http://www.depositprotection.com/).  Their service was free the last time I used it (this was a while ago).  But they keep any interest they get from investing the deposit.  But bearing in mind the paltry interest you'd earn right now, I think that's no bad deal.  Other schemes exist.

I hope you don't mind me telling you I think your question is very naive.  It makes me think you've not done much research into being a landlord.  Are you aware of your legal obligations under H&S type legislation?: Specifically surrounding Gas and Electric installation and appliances?  Your council could define this as an HMO (House of Multiple Occupation) and demand safety checks / improvements and licencing.  Or they might not.  I don't do HMOs.  But people who I know who do tell it me it can be a real pain if you don't ge the admin correct, up front.

Good luck...

You can use Rentoo (www.rentoo.co.uk) to conduct a free referencing check. Have a look.