You may have seen reports in the media around ‘No deposit’ schemes, with concerns raised that some agents are promoting these options for commission, with tenants not fully understanding the implications of the product.
NALS CEO, Isobel Thomson, offers some advice:
“Ultimately, tenants need to be aware of their responsibilities. If they are offered a no deposit product by agents, made aware of the conditions of purchasing that product, have signed to accept its terms and conditions then they must accept that should something go awry at the end of a tenancy the terms and conditions of the product will be applied.
“They should also do the maths at the outset in relation to what they might pay per month for a “nil deposit” option and whether it stacks up against a traditional deposit, protected by a statutory deposit scheme with a right to adjudication.
“Equally agents must be rigorous in ensuring that all parties are aware of the commission they may receive as a result of the sale of that product and that the terms and conditions of the product are read, understood and acknowledged in writing by the tenant.
“There is nothing wrong or illegal in receiving a commission and it is the norm in other industries like mortgage broking, but there is a need to ensure complete transparency and understanding by all parties.
“It is important that as an industry we don’t let what could potentially be a good option for many tenants turn into yet another opportunity to scapegoat agents.”