Zero Deposit Guarantee Option
Protection and Peace of Mind for Landlords, Affordability and Convenience for Tenants
A Zero Deposit Guarantee can replace a traditional tenancy deposit, giving landlords the same cover and protection as having a tenancy deposit in the bank, whilst making renting more affordable for tenants.
Tenants pay the equivalent of one week’s rent for a Zero Deposit policy, which is non-refundable and gives you effectively the same cover as a 6-week tenancy deposit. Tenants remain fully accountable for any damages or unpaid rents.
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 evaluation. If found in your favour, we settle the claim with you and recover the costs from the tenants directly, along with any recovery costs. Non-payment by the tenant at this stage may impact on the tenants credit history.
Why Would Landlords Choose Zero Deposit?
It speeds up the rental process: Zero Deposit helps tenants reduce the upfront cost of renting, which can help speed up the process and reduce void periods.
It provides security and protection: Since you are not taking a deposit you cannot fall foul of deposit protection regulations and be made to pay the tenant 3 times the deposit amount for doing so. A Zero Deposit Guarantee provides effectively the same cover as a 6-week tenancy deposit and thus means it offers more cover than a traditional deposit from June 1st 2019, because from that date a traditional deposit is legally capped to 5 weeks. The Guarantee is underwritten by Great Lakes Insurance SE, part of the Munich Re Group. Munich Re is one of the world’s largest re-insurance companies.
It helps to attract a wider tenant audience: Many good tenants have their deposit locked up in their current property. Offering a Zero Deposit Guarantee facilitates a quicker move and gives your property an edge of your competitors.
It supports accountable tenants: Tenants remain fully accountable for looking after your property and making rental payments, with us only 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 we will pay you within two working days, which is significantly faster than you will get paid out for a traditional deposit claim.
Reduces paperwork and hassle: A Zero Deposit policy is not a traditional deposit, so it doesn’t need to be registered with one of the deposit protection schemes, which can save landlords time and money.
You can download a PDF leaflet that gives you more details about the service for landlords here.
Common landlord questions about Zero Deposit.
There is an initial fee equivalant to 1 week's rent and an annual fee of £26. Full, up to date details are on the Zero Deposit website.
At the same time they would have paid for a normal tenancy deposit.
Yes, within 14 days, but only if they have paid you a traditional tenancy deposit. They will not be able to cancel otherwise.
Yes, just the same as they would be with a conventional deposit.
It might well attract more applicants but there is no reason to think they will be of a lower calibre. All tenants should be properly referenced to weed out any bad apples, whether they are interested in a Zero Deposit Option or not.
A claim can be made in two ways: 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 Zero Deposit of this and request to make a claim. 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.
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.
No, disputes are assessed by The Dispute Service (TDS), who operate the longest-running tenancy deposit protection scheme in the UK. They review the evidence and provide a fair and impartial decision.
If TDS finds in your favour, we will pay you within two working days of being informed of TDS’s decision.
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.
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.
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.
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.
Yes - it's a condition of taking a Zero Deposit Guarantee that the tenants are referenced by a recognised referencing company and that the right wording is inserted into your AST. The easiest way is to let us reference the tenant for you and to use our free AST creator, but if you wish to make your own arrangements then you can. However if you get something wrong your Zero Deposit Guarantee will be invalid.