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tenant requesting not to protect deposit

Started by landlord78, March 12, 2015, 10:33:13 AM

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landlord78

Hi,

I have HMO licence and have let one room to a couple two days ago for 3 and half month. The guy is working as IT professional and is on 3 month assignment. He is not sure when he will be finishing his existing contract but will only know 2-3 days in advance. Once his contract finishes he would be in a rush to buy his tickets, close his bank account and leave the country. As it takes few days to get deposit back from DPS, he has requested me not to put the deposit in DPS. Due to his circumstances, he has paid me rent and deposit in cash. He looks a decent guy. He has signed AST where I have not mentioned anything regarding deposit.

What shall I do? shall I still go ahead and protect the deposit? or get in writing from him that he does not wish to protect the deposit due to his circumstances? I do not wish to get in any trouble with authorities. His visa is finishes on 22/6/15 so he will not be there to sue me.

Riptide

Quote from: landlord78 on March 12, 2015, 10:33:13 AM
What shall I do?

Don't take a deposit from him or if you do protect it. 

DO NOT TAKE A DEPOSIT AND NOT PROTECT IT UNDER ANY CIRCUMSTANCES.

If you want access to cash straight away then use the insured scheme where you hold onto the money.  Once the tenancy finishes, you're happy with the property and you both release it online from the DPS you can give him his deposit, in cash, that same day.


Riptide

His visa is finishes on 22/6/15 so he will not be there to sue me. - He has 6 years to sue you.  All he has to do is come back for a holiday, see his claim through and gets free money.  There are companies doing this on a no win no fee basis.  I'm sure they'd still take the case up on his behalf. 

Don't be so naive not to follow the law and don't let a T advocate that you break the law.  All up sides for them, all down sides for you.

propertyfag

#3
Listen to the boy Riptide!

Do NOT take a deposit and not protect it. You could be being setup here! This is how professional bad tenants operate (I'm not saying your tenant is one).

Also, if you do take a deposit and protect it, do NOT pay out of your own pocket to repay the deposit to speed things up- wait until the DPS returns the monies!

Hippogriff

Quote from: landlord78 on March 12, 2015, 10:33:13 AMAs it takes few days to get deposit back from DPS, he has requested me not to put the deposit in DPS.

Tell him you have no choice. He has paid you a deposit and, by law, you must protect it. It doesn't matter what you, or he, wants. There's no room for gentleman's agreements with this stuff... if it was optional, then do you think anyone would be doing it? Unlikely in my opinion. That is why it isn't optional.

Cash flows easily around the world these days... from account to account. If he paid a deposit to you and you put it into the DPS, for example, then the DPS can pay it back to an account nominated by the Tenant. What is the problem for the Tenant? Are they insisting on cold hard cash? Everything should be done by electronic means these days, I'm a big fan of it.

Whatever you do, do not fail to protect any deposit taken. I think we have consensus on this forum on that aspect at least.

boboff

There consider your self told....


Have you thought of a different approach?

Don't take a deposit. BUT take two months rent in advance ( or week or whatever) then after the first period they pay again, so you always have two periods in hand at the beginning of the period. Then when they leave, at short notice, you refund an agreed amount which is agreed in advance, depending on how much notice you feel you need???? When this happens get a surrender of tenancy dated at the end of the notice. As this will be shorter than the 6 months in all probability this should cover you?

You could also consider a lodger agreement if you live there?

Good luck, I know that decent contractors in HMO's are the nuts!

RickC

If the word deposit has been used in any paperwork, then protect it!

Read the first two clauses of S213

(1) Any tenancy deposit paid to a person in connection with a shorthold tenancy must, as from the time when it is received, be dealt with in accordance with an authorised scheme.

(2) No person may require the payment of a tenancy deposit in connection with a shorthold tenancy which is NOT to be subject to the requirement in subsection (1).