Understanding Zero Deposit
Frequently Asked Questions Zero Deposit
Moving homes can mean hefty costs for things such as removals, administrative fees and expensive deposits. If you’re looking for ways to cut costs to help you to move quicker, then why not consider a deposit rental scheme from Zero Deposit?
Find out all you need to know about deposit schemes, including how they work and how much they cost, as well as some of your other frequently asked questions.
What is Zero Deposit?
A Zero Deposit Guarantee with Zero Deposit is a deposit scheme which replaces the traditional cash deposit typically required in tenancy leases. No deposit rental options offer renters the freedom to move properties without having to save the money for an expensive tenancy deposit.
How does the Zero Deposit Scheme work?
Zero Deposit's Zero Deposit scheme offers a cheaper alternative to expensive cash deposits, which can discourage new tenants from renting properties. Instead, the tenant will be able to pay a fee equivalent to one week's rents. Allowing the renter's money to be freed up to spend on furniture, bills or other necessities.
A Zero Deposit guarantee works by;
- Purchasing a zero deposit guarantee: The tenant purchases the non-refundable guarantee instead of paying a security deposit. Existing tenants will need to speak to their agent about releasing their deposit to get a guarantee.
- At the end of your tenancy: If all rent and bills have been paid and there are no damages in the property when your lease comes to an end, you can leave without having to pay any bills or fees.
How much will it cost at the end of my tenancy?
As your Zero Deposit Guarantee fee is not returned to you at the end of your tenancy, unlike traditional security deposits, no more action will be required when your tenancy agreement comes to an end.
Instead, if there are any damages or overdue rent payments, then tenants are still liable to pay for them. However, tenants are free to dispute these claims with their landlord. Should these claims not be resolved, they will be referred to the Tenancy Deposit Scheme (TDS) for adjudication of your dispute.
Therefore, the tenant remains wholly responsible for damage to the property, and tenants pay these costs.
What are the benefits of Zero Deposit?
There are many benefits associated with this type of deposit replacement scheme, they include;
- Renting is cheaper: No deposit schemes are a less expensive alternative to a cash deposit.
- Free up your money: Zero deposit schemes can help existing tenants to free up their security deposit taken when they moved into the property.
- Speed up the rental process: Making it easier to move in or out of properties without having to wait for your deposit.
What are the benefits for the landlord?
For landlords, the benefits of a no deposit guarantee mean that they receive protection which is equal to a six-month deposit, as an alternative to a deposit protection scheme. Deposit free renting helps to speed up the renting process for landlords who are looking for tenants to rent their property.
What are the benefits for estate agents?
For estate agents, the benefits are that properties are a lot more appealing to prospective lenders and makes renting more affordable. Meaning a no deposit schemes could help agents to find more interested renters.
How does Zero Deposit work if there are multiple tenants?
If there are multiple tenants occupying the property, the Zero Deposit Guarantee fees will be shared equally the tenants. Once all the tenants in the property have signed the agreement, they are then liable for any damages to the property or financial losses to the landlord.
Is Zero Deposit safe?
Zero Deposit is regulated by both the Financial Conduct Authority and the Prudential Regulation Authority.
You can find details and FCA regulations at register.fca.org.uk by searching for the company name or reference number.
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