Deposit paying delay query

Signed the contract but tenant is having some issues getting their deposit back as it won’t be until after they move in to the new place.

Paying the 1st month of Rent is fine.

Paying the deposit we have agreed to delay for a few weeks, and would initiate a contract change we will agree to. Then I would update the contract and we resign (I guess).

Should I the deposit to zero in the new contract as otherwise Openrent would then still be expecting the deposit? Then the tenant has suggested sending it to me directly, and I would then insure with DPS (used them before as is the government recommended scheme), and give them the details of the holding.

otherwise suggestions on how to do this using open rent?

Hi @Andrew75 -

You can set the deposit amount to 0 (in other words removing any deposit). This is essentially what you are doing by telling the tenant they can move in without paying the deposit yet. However, we wouldn’t advise this, and it’s clearly a risk that you’ll never receive a deposit from the tenants. The system does support it if you want to take this risk though.

If you try to accept a deposit later into the tenancy, and register it separately without changing the tenancy agreement, you will likely run into legal issues around the validity of the deposit. But you could sign a new tenancy (renewal) with the new non-zero deposit amount. Clearly there would be no obligation for the tenant to sign this renewal.

If you’re planning to do either of the above, then we’d suggest seeking advice and ensuring you are comfortable with the risks of having no deposit.

Alternatively, your tenant could use a “zero deposit” scheme, which doesn’t require the tenant to have the full deposit amount in cash at the start of the tenancy:

This is a much safer option for you compared to proceeding without a deposit at all and trying to workaround it later.

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I would not recommend delaying the deposit as the tenant has little incentive to pay once theyre in. Its even worse if the deposit is recorded as paid but is never received. As suggested above, you could offer the tenant the alternative of a zero deposit scheme.

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Hi both, thank you for your responses. I have added a few custom clauses in which allows a short time to pay the deposit, would use whichever gov approved deposit service, and once paid we would, as you say adjust the contract as a renewal, or alternatively I stated in the clauses as a back up that once paid the clause overides the page 3 statement of deposit and sets the deposit and all references and mentions therein to that amount. So if it doesn’t get paid it’s akin to not paying the rent and means arrears. Tenant has agreed this process.

Moving from one place to another is already a struggle, ideally we need some sort of interim loan facility for this cash flow issue, government or DPS or MyDeposits backed, that pays the deposit whilst you wait for the previous one, for some small fee, and not a ridiculous loan shark fee. I dont think zero deposits are the way to go as the money needs to exist somewhere in order for both parties to be assured.

Hi @Andrew75 - I can’t comment on your specific custom clauses, but if you plan to rely on them, I’d definitely seek legal advice before proceeding. It doesn’t sound ideal to me. Maybe that’s a risk you’re willing to take, and of course ultimately the decision is up to you.

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Unless youre a lawyer dont tinker with a legal document. It can have unintended consequences. One possibility is that the tenant never pays the deposit but tells a judge that they did and uses your clause as evidence. The judge then awards a 3x deposit penalty for non-protection.

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