By Martine Harris
Fri 22 Mar 2019
We’re very excited to announce the launch of the Zero Deposit offering at Moginie James!
A Zero Deposit Guarantee can replace a traditional tenancy deposit, giving you the same cover and protection as having a tenancy deposit in the bank, whilst making renting more affordable for tenants.
So, what are the benefits for Landlords?
1. Speeds up the rental process
Zero Deposit helps tenants reduce the upfront cost of renting, which can help speed up the process (by up to 26%!) and reduce void periods.
2. Provides security and protection
A Zero Deposit Guarantee provides the same cover as a six week tenancy deposit and is underwritten by Great Lakes Insurance SE.
3. Helps to attract a wider audience
By giving you the potential to attract a wider audience of tenants, you can increase demand and reduce the time taken to rent.
4. Supports accountable tenants
Tenants remain fully accountable for looking after your property and making rental payments, with Zero Deposit making payment to you in the event of a fair claim at the end of the tenancy. Claim disputes are settled by The Dispute Service (TDS) and paid to you within two working days.
How does it work for Landlords?
1. Your tenants make a payment equivalent to one week's rent for a Zero Deposit Guarantee online and the paperwork is generated with copies sent to all parties
2. At the end of the tenancy the inventory and check-out are completed and if your tenants leave the proeprty in a satisfactory condition with no outstanding rent or bills, the Zero Deposit Guarantee expires with no further action required.
3. In the event of any financial loss or damage due to you, this is settled by the tenant or, if they dispute the claim, the evidence is sent for expert adjudication
4. If found in your favour, we settle the claim with you and recover the costs from the tenant directly, along with any recovery costs. Non-payment may impact on the tenants' credit history.
Zero Deposit does NOT mean zero responsibility. Bad tenants are not let off the hook. We pay approved claims directly to you and pursue the tenant for payment, with financial and credit record penalties if they fail to pay. Less that 1% of tenancies end with a full dispute*, but when they do, we've got your back.
(*source TDS April 2017)
Frequently asked questions
Who pays for the Zero Deposit Guarantee?
The Zero Deposit Guarantee is paid for by the tenant.
What is covered by the Zero Deposit Guarantee?
You are covered for financial loss or damage for which your tenants are liable under your Assured Shorthold Tenancy Agreement, up to the value of 6 weeks' rent.
Are my tenants still liable for any financial loss or damage?
Your tenants remain liable for any financial loss or damage as set out in your Assured Shorthold Tenancy Agreement.
Why should I offer this to my tenants alongside a traditional deposit option?
Moving into rented accommodation can be a costly experience, so by offering a more affordable solution for tenants you can potentially attract a wider audience of tenants which can lead to faster renting and higher rents.
Will a Zero Deposit Guarantee attract a different type of tenant?
The Zero Deposit Guarantee may attract a wider audience of tenants. However, we will still carry out the same checks on tenants to ensure they are suitable and meet the criteria you have agreed with us prior to them being introduced to Zero Deposit.
How do I make a claim?
A claim can be made in two ways:
1. If you believe there is any financial loss or damage suffered by you under your assured shorthold tenancy agreement, and you have failed to reach a settlement directly with your tenant, you can notify us of this and request to make a claim.
2. If at the end of the tenancy we become aware that the tenant has not made payment to you in settlement of any financial loss or damage, we will deem you to have made a claim.
What if a claim is challenged by a tenant?
We always encourage settlement by negotiation. Where the tenant disputes a claim, we will ask you and the tenant to provide evidence and we will pass the claim and the evidence to our expert evaluation partner, The Dispute Service (TDS). TDS will review the claim and determine whether the
tenant is liable for any financial loss or damage and, if so, the amount due to you.
What evidence will I need to provide in the event of a dispute?
We recommend you include the check-in inventory and schedule of condition report and the check-out inventory and schedule of condition report. If you are claiming for rent arrears, you should send a schedule of the rent that has been paid, and the outstanding rent and when it became due. With these documents, you should be able to evidence any property damage or rent arrears for which the tenant is liable. If you would like to submit photos as evidence, they should be dated and of reasonable quality. Our dispute process is the same as with a traditional cash deposit.
If there is a dispute, is an insurance company deciding whether my claim is settled?
No, disputes are assessed by our expert evaluation partner, The Dispute Service, who operate the longest-running tenancy deposit protection scheme in the UK. They review the evidence and provide a fair and impartial decision.
How quickly do I receive a pay-out if my claim is successful?
If TDS finds in your favour, we will pay you within two working days of being informed of TDS's decision.
How much does a Zero Deposit Guarantee cost?
The initial cost of the Zero Deposit Guarantee for the tenant is the equivalent of one week’s rent. The Zero Deposit Guarantee is automatically renewed on an annual basis. On renewal, the tenant also pays an annual administration fee of £26 which covers the cost of managing the Zero Deposit Guarantee. Where there is a change of tenant under an existing Assured Shorthold Tenancy Agreement, the new incoming tenant will need to pay a £40 fee to be added to the Zero Deposit Guarantee.
How do I know I can trust Zero Deposit?
Integrity is one of the core values of our business. Zero Deposit Guarantees are provided by Great Lakes Insurance SE, which is regulated by the German Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and subject to limited regulation by the Financial Conduct Authority and the Prudential Regulation Authority which means there are safeguards in place to help ensure you get a fair and transparent product with no hidden risks.
Will a dispute over a claim be resolved fairly?
We have partnered with The Dispute Service to help ensure fair outcomes for landlords and tenants in the event of a dispute.
Are ‘The Dispute Service’ impartial?
The Dispute Service (TDS) adjudicators work fairly and impartially. All TDS adjudicators belong to the Chartered Institute of Arbitrators and comply with their Adjudicator Code of Conduct, which is available on the TDS website. The adjudicators make decisions based on the issues in dispute and the evidence provided.
Do I still need to collect a deposit?
No, the Zero Deposit Guarantee replaces the need for a tenancy deposit, giving you effectively the same security and protection but without the hassle of collecting a traditional deposit.
How can I offer Zero Deposit on my property?
Just let our team know and they will do the rest!
Get in touch HERE to instruct us to offer a Zero Deposit on your property or to find out more information.
This Guarantee is provided by Great Lakes Insurance SE, UK branch office. Great Lakes Insurance SE is a German insurance company with its headquarters at Königinstraße 107, 80802 Munich. It is registered with the commercial register of the local court of Munich under number: HRB 230378. The UK Branch office is at Plantation Place, 30 Fenchurch Street, London, EC3M 3AJ. Great Lakes Insurance SE UK Branch is authorised by the German Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and subject to limited regulation by the Financial Conduct Authority and the Prudential Regulation Authority.