One of the conversations I often have with landlords is about their frustration in a ‘five week’ capped deposit. If rent is not paid for the final month of a tenancy and there are damages, the landlord maybe be out of pocket in order to maintain the condition of the property.
This is a ‘worst case scenario’ but of course, it is our job to prepare for the worst case, so our landlords are fully supported. Therefore, in 2019, we started offering ‘Reposit’. We were one of the first Letting Agents outside of London to trial this alternative to a deposit.
The idea came from London based Letting Agents and Landlords, where a deposit for tenants in London are a lot higher and can be a barrier to becoming a tenant. It offers an alternative to the usual five weeks equivalent of rent deposit, benefitting both, the landlord and tenant.
Reposit is essentially an insurance scheme, which is FCA regulated, and offers landlords up to eight weeks equivalent in rent as a ‘deposit’, on behalf of the prospective tenant. A full three weeks higher than the traditional ‘five week’ capped deposit.
The criteria for a tenant to qualify for Reposit is strict and is subject to their terms and conditions – but takes the hassle away from landlords.
The advantages to the landlord are a larger deposit and Reposit will pay the amount claimed out to the landlord (subject to arbitration if disputed by tenant), in the same way as a Deposit Scheme. The value to the tenant is that Reposit pay the deposit initially, meaning they don’t have to stump up the large sum in one go. The landlord gets the assurance of a bigger deposit, quickly and without any hassle. So, it’s worthwhile for both parties.
Once paid out to the agent or landlord, Reposit will then chase the tenant for the funds to be repaid, and if necessary, can take legal action against the tenant if not paid. This solution takes the landlord out of the equation.
The tenant would go into an agreement with Reposit paying the equivalent to 1 weeks rent to set up the account. In addition, the Tenant would pay £30.00 a year renewal fees to Reposit. We are finding the scheme to be very popular, and more and more Landlords are now offering this as an option to their Tenants.
The scheme is a lot stricter than a traditional deposit scheme as usually it would be up to the landlord to deal with any legal action with a deposit after the five week deposit has been arbitrated by the dispute service. The most popular advantage we find with Reposit is the speed to arbitrate and pay the funds. Generally, they would allow 24 days after checkout for the amount of dilapidation to be raised (with evidence and contractor quotes) and we find from beginning to end it can be resolved in around a month.
No costs to landlords
There are no costs to the Landlord with Reposit and all you would have to do is set up an account with them just as you would with a Deposit Service. The results have so far been faster and the amount of deposit is much higher for the landlord.
To find out more about how the Reposit scheme can benefit you as a landlord, speak to our lettings team.