Updating post from Reddit.
Hi all I’m an experienced landlord for many years for context and always used TDS or DPS.
My agent has said the upcoming tenants want to use reposit. Now it’s giving me red flag vibes because I’ve never used it and from what I read the tenants pay a small fee to them and they cover it.
Has anyone used reposit and successfully made claims off it in case tenants have damaged anything?
From what I understand you get a 8 week protection amount as it is not a cash deposit. They take on the risk of recovering any end of tenancy costs from the tenant as they pay out to you like an insurer.
Otherwise it seems exactly the same as the TDS and DPS. You file a claim with evidence and they decide if it’s reasonable. If it is, they collect from the tenant and if the tenant dodges they pay out from their insurance and bill the tenant and chase the debt.
Not really seeing a downside
What does your agent advise regarding their experience of using Reposit ?
It is similar to zero deposit scheme , where the tenant pays a non refundable fee equivalent to 1 week's rent (basically paying insurance fee) instead of depositing a lump sump cash which would be returned upon the end of the tenancy.
Landlord wise, the benefit would be an additional 3 weeks of rent cover vs the legal max of 5 weeks rent. However, should you need to claim anything, you need to submit through reposit. Assuming the adjudication process is similar to the traditional government deposit schemes, then it appears that the landlord benefits from the additional cover but the tenants lose out on the fee if they vacate with no damage and paid rent in full so would have lost 1 week rent compared to getting the full cash deposit back via traditional deposit scheme.
Unless the tenants don't have 5 weeks of rent available, it doesn't make sense why a tenant would want to incur a non refundable fee of 1 week rent ? Not only that, if tenant doesn't have savings of more than 5 weeks rent, that in itself is a red flag regarding financial affordability / stability.
Tenants are students as yes they want to do it because they don’t have 5 weeks deposit to pay. Normally it would concern me if they can’t afford 5 weeks and tbh student tend to pay the traditional cash deposit for TDS or DPS. So it’s a slight red flag for me. Agent says they’ve had good experience but most agents speak out of their arse so not 100% relying on their response.