2013: The year we abolish the deposit?
A leading North East lettings agent has called upon the industry to make 2013 the year deposits become a thing of the past, calling them “a relic from a bygone age” and comparing them to VHS and Friends Reunited.
Ajay Jagota is Managing Director of KIS Lettings, who manage properties for some 700 landlords across the North East from branches in Sunderland, North Tyneside and South Tyneside.
The firm does not ask new tenants to pay an upfront deposit, instead asking them to nominate a guarantor for their tenancy.
The guarantor – a home-owning friend or family member- signs a legally-binding document stating that should the tenant have rent arrears or cause damage they are jointly liable.
A year after being introduced, the system boasts a 100% success rate.
Ajay said: “Let’s face it - deposits are a relic from a bygone age. They’re VHS. They’re Friends Reunited.
“Think about it: Landlord-tenant relationships are ideally long-term partnerships based on trust. Turning round to someone you’ve just met and asking for money because you don’t trust them not to smash your house up or do a runner is hardly the best start. And the current system of credit checks offers no assurance of future reliability of tenants -especially in today’s climate where jobs can go and people’s ability to pay rent can change in an instant.
“Think about it: Aren’t deposits a hassle you don’t need? Is £500 or first month’s rent going to rectify much in case of serious damage or non-payment of rent? And even then the money is handed over to a third party to determine if the landlord can receive it!
“Think about it: Aren’t you limiting your potential tenants to people who have several hundred pounds lying around? I heard someone on the radio recently who got a payday loan just to afford his deposit – do we really want to be encouraging tenants to take out high interest loans just to rent with us?
“I’m a landlord myself, and I wanted a foolproof way of getting – and keeping - good tenants.
“Despite a 100% success rate we have even improved the system by eradicating the lengthy court processes we used to use to enforce the guarantees, by using an exclusive insurance product offering a nil excess rent guarantee and full legal protection cover
“This means landlords get their money immediately and the insurance company have someone else to pursue besides the tenant, offering them a less riskier proposition. Peace of mind all round!
“In a year – and out of almost 1000 tenancies - we’ve had one dispute with a guarantor. Eventually as he was an investor himself and having experienced firsthand the robustness of our system he decided to hand all his properties over to KIS to manage!
“Happy landlords, happy tenants and heaps less headache. If you aks me, deposits are dead.”
This was posted in Bdaily's Members' News section by Ajay Jagota .
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