B is for Bond

Not James Bond (sorry).  The tenancy deposit type of bond.

This is security for the landlord to cover any expenses he has at the end of the tenancy for breach of the terms of the tenancy and/or damage to the property or breakages.

There are two types of bond.

• One is where the tenant makes a payment – a deposit.
• The other is where an organisation, for example a local authority, will provide a guarantee.

Payments

As I hope you are all aware, this now needs to be protected with a government authorised tenancy deposit scheme within 30 days or penalties apply.

Unfortunately not knowing about the regulations or forgetting to register the deposit are not valid excuses (as the optimistic landlords who write to me about this, seem to think).

So it is REALLY important that landlords get to grips with this and make sure that the payments get protected.  Otherwise you are at risk for being sued for between one to three times the tenancy deposit amount for the next six years – with no defence (see the post from yesterday for more information on this).

Guarantees

There are many schemes around to help people get accommodation where a guarantee is provided by an organisation in lieu of an actual payment.

These are often very good – so long as the organisation is reliable you should get paid your (reasonable) claim if the tenants leave a trail of breakages behind them.  AND they don’t need to be protected in a scheme!  (Because you don’t actually get given the money).

The bad news is that they don’t usually cover rent arrears (as ordinary deposits do), just damage and breakages.

Note that if a guarantee is offered by an individual, rather than by a local authority or similar organisation – this is not as reliable.  You need to be very sure that this person is actually going to pay up if called upon.

You can of course go to court and get a CCJ if necessary, but an unpaid CCJ is nowhere near as good as an actual deposit protected with a scheme.  Even with all the scheme paperwork.

Next week, C.