Deposit alternative operator wades into spat over agency scheme

A dispute concerning a ‘no deposit option’ put forward by a letting agency has reached the Daily Mail.

The newspaper’s online service this week ran a story about a dispute between Leaders Romans Group and a tenant.

The core of the dispute is that the tenant, a single-parent mother, claims that it was not made clear by the agency that the no deposit option meant she would be liable for damages at the end of her tenancy; Leaders Romans Group disputes this.

The issue was heightened further by the tenant’s claims about the poor condition of the property, which she said obliged her to end the tenancy early - prompting a request for her to pay £1,318 to the landlord for alleged damage. The tenant claims most of the payment is unreasonable.

One by-product of this has been for the spotlight to be shone on the wide range of deposit alternative schemes now existing.

Hannah Slater of campaign group Generation Rent says in the Mail: “Deposit alternatives are tempting because they reduce the upfront cost of moving ... some products are better than others but those which charge a monthly fee rather than a one-off or annual fee quickly end up being very expensive.”

Now a statement from one provider - flatfair - says its scheme is not likely to disproportionately penalise tenants in the way highlighted by the newspaper case. 

Daniel Jeczmien, flatfair’s co-founder, says: "We have always been concerned about some operators in the market who are structuring the cost to tenants in a disproportionate way, or forcing tenants to take on additional insurances as a prerequisite. 

“We believe the costs to the tenant should be proportionate to the benefit, and there needs to be a clear differentiation between insurance-based companies who are charging tenants excessive or recurring fees, and technology firms, like ourselves, where tenants are charged a one-off transparent fee without any hidden costs”.

On a recent Radio 4 programme Hannah Slater said: “Clearly there’s a niche in the market for products like flatfair, which shows what a challenge it is for tenants to come up with hundreds or even thousands of pounds at the beginning of a tenancy ... There’s a real spectrum of products out there and flatfair is on the better end.”