S21 and zero deposit scheme

Grateful To just check on this as it’s kinda still new when the AST clearly mentions the tenant have a choice of either a traditional deposit that is protected etc or going down the zero deposit route which is cheaper etc but the money paid is non refundable etc and the tenant opts for a zero deposit route as it’s cheaper etc does this contravene the tenant fees act as an illegal fee ?


As per nrla above it does not become classed as an illegal fee as long as tenant has the choice.

So my question is going forward is when you serve a s21 down the line how do you show the deposit is protected when they didn’t pay one in the first place?

I believe that one errant judge did rule that it was an illegal fee, but the judgement wasnt binding on future cases and I wouldnt expect another court case to go the same way. You would cite TFA2019 S1(7) as the defence.

There is no deposit paid to you so the question doesnt arise for s21 purposes.

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7)For the purposes of this section, a landlord does not require a relevant person to make a payment, enter into a contract or make a loan if the landlord gives the person the option of doing any of those things as an alternative to complying with another requirement imposed by the landlord or a letting agent.

Do you mean this? Sorry am not good with legal speak if could explain what it is to me please?

Yes. It means that if you give the tenant the option of either a traditional deposit or the zero deposit scheme it should not breach the TFA. However, you cant completely rule out rogue judges.

How can you deal with that then? Make sure you got good solicitor to argue the point that it is valid?

Whichfver you can afford. Do you anticipate an issue?

i dont think so just trying to argue and cover all possible bases i realise this is a mute point which rarely arises

zero deposit has become a lot more popular so i feel a reasonably experienced judge should either know about it or be able to understand it as it clearly stated in the AST its an alternative to a deposit