UK Landlord Forum / Life

Hi all,

Just wondering about the below.

I am thinking of potentially taking on the full management of my property from the letting agent.

The letting agent will charge me to do this, and within the transfer I believe I get all paperwork etc involved with regards tenants.

But i'm unsure what would happen to the tenant's deposit.

Reason I'm thinking this is, the letting agent does a 'find a tenant' service, where they get you a tenant, they don't deal with management but they hold the deposit.

So this brings me to a few thoughts.

If I transferred management to myself and also wanted the deposit transferred, how/what is the process or steps I need to take to do this with a tenancy deposit scheme from agent to myself?

If I go down the requesting deposit route, which tenancy deposit scheme provider is best and which type (insured or custodial) would you advise to use?

Is there any advantage for keeping the deposit with the letting agent? Unsure why the agent would hold the deposit if (I presume) they don't deal with the check out process with tenants.

Many thanks
Betty

Quote from: Betty on January 07, 2023, 07:09:24 AMIs there any advantage for keeping the deposit with the letting agent?

None at all.

If you are paying the Agent for transferring the 'tenancy' effectively to you to handle in all regards, this should be part of it. It's perfectly possible for a Deposit to be transferred between Landlords. You just need to register an account with one of the schemes. If the Deposit is currently custodial then you don't need to worry about what you choose. If the Agent is holding it, via an Insured scheme, then you'd imagine it's a transfer of funds to you... and you should ensure you're ready to accept and protect immediately... I don't think anyone will worry about a few hours of an unprotected Deposit - but do not quote me on that.

You say the Agent holds the Deposit, but "managing" the Deposit and "holding" it are subtly different. And your question is about "keeping". They can answer you as to what they've actually done.

Don't fret, it's not difficult... but try to keep any non-protection period to an absolute minimum if it can't be avoided.

Quote from: Hippogriff on January 07, 2023, 10:52:20 AM

Quote from: Betty on January 07, 2023, 07:09:24 AMIs there any advantage for keeping the deposit with the letting agent?

None at all.

If you are paying the Agent for transferring the 'tenancy' effectively to you to handle in all regards, this should be part of it. It's perfectly possible for a Deposit to be transferred between Landlords. You just need to register an account with one of the schemes. If the Deposit is currently custodial then you don't need to worry about what you choose. If the Agent is holding it, via an Insured scheme, then you'd imagine it's a transfer of funds to you... and you should ensure you're ready to accept and protect immediately... I don't think anyone will worry about a few hours of an unprotected Deposit - but do not quote me on that.

You say the Agent holds the Deposit, but "managing" the Deposit and "holding" it are subtly different. And your question is about "keeping". They can answer you as to what they've actually done.

Don't fret, it's not difficult... but try to keep any non-protection period to an absolute minimum if it can't be avoided.

Thanks Hippogriff.

So the agent is holding the deposit on an insured basis.

If I wanted to do Custodial, am I able to transfer it to this deposit type?

Thanks.

In an insured scheme, the agent holds the deposit in their bank account for the duration of the tenancy, accruing the interest but paying a small fee to the deposit protection company to protect this deposit and provide a dispute resolution service. When the tenancy comes to an end, the agent returns the deposit to the tenant.

In a custodial scheme, the deposit protection company holds the deposit for the duration of the tenancy, and administers the agreed repayment at the end of the tenancy. They provide a dispute resolution service.

QuoteThe agent is holding the deposit on an insured basis.

If I wanted to do Custodial, am I able to transfer it to this deposit type?

It will be easier to transfer if you use the same company, i.e. Deposit Protection Service (DPS), MyDeposits, or Tenancy Deposit Scheme (TDS), as the agent.

You will need to phone the scheme's customer services to make the transfer, which will involve the agent paying the deposit they are holding into the custodial scheme in your name.

When I got rid of an agent for poor performance and took over tenancy management myself, I wanted to use a different deposit company. In this case it was easier to get the agent to return the deposit to the tenant and then have the tenant pay it over to me for protection in the new scheme.

However you do it, don't forget to issue the new Prescribed information to the tenant.