The Deposit Replacement Scheme is a product purchased by a tenant, as an alternative to the more traditional deposit approach, which allows the tenant to defer payment of any agreed default charges (that would ordinarily be deducted from a standard monetary deposit) until the end of the tenancy.
In order to fully replicate the security of a standard monetary deposit, the deposit replacement scheme will enter into a separate agreement with Shaws Kensington for the lifetime of the tenancy to pay, at their discretion, any agreed default charges should the tenant not make payment at the end of the tenancy. This ensures that the landlord has the necessary security in place irrelevant of the actions of the tenant.
Requirements for qualifying for the Blinc DRS
In order for you to enter into the deposit replacement scheme DRS Agreement the following requirements will need to be in place:
- ALL tenants that appear on the tenancy agreement must have successfully passed referencing with us or have passed the equivalent checks with another referencing provider and will need to have signed and agreed to our Tenant Terms and Conditions;
- If a guarantor is required, they will also need to have passed the referencing checks and signed a copy of the Tenant Terms and Conditions and must have signed the tenancy agreement or a legally enforceable addendum to the tenancy agreement;
- The deposit replacement scheme must have received full payment from the tenant for their services prior to the commencement of the tenancy agreement;
- Shaws Kensington have read and accepted the terms and conditions of the service.
The agreement between The Deposit Replacement Scheme and Shaws Kensington
Where both the tenant, Shaws Kensington and Landlord have agreed to enter into the deposit replacement scheme DRS Agreement and the amount due has been paid to Shaws Kensington by the tenant, The deposit replacement scheme will provide the following service:
They will make contact with ourselves and arrange payment, at The deposit replacement scheme’s discretion, of any agreed default charges that would have otherwise been deductible from the standard monetary deposit up to the maximum value stated on the deposit replacement scheme DRS Confirmation document to include:
- Cleaning costs;
- Damages to the landlord’s property and/or belongings in excess of fair wear and tear;
- Any unpaid rent that remains due after vacant possession up to a maximum of 8 weeks rent (with a maximum guarantee of 8 weeks rent in total, unless otherwise agreed within the deposit replacement scheme DRS Confirmation document);
- Any other reasonable costs/charges set out in the tenancy agreement (provided legally enforceable) at their discretion;
- The deposit replacement scheme DRS Agreement will be for the lifetime of the tenancy, with ‘lifetime’ meaning the continual occupation of the property by the same tenant(s) with no breaks;
- They will charge the tenant an annual administration fee, although any non or late payment of this charge will not affect the position of the landlord’s agreement with Shaws Kensington.
End of Tenancy Process
Shaws Kensington or the landlord will carry out the normal end of tenancy checks and notify both the deposit replacement scheme and the tenant of any default charges they wish to make.
They will then contact the tenant to gain approval to the default charges and raise an invoice for the amount due, which upon receipt of payment, the deposit replacement scheme will pass to Shaws Kensington.
Alternatively, the tenant will be able to settle the default charge directly with Shaws Kensington or the landlord, from whom the deposit replacement scheme will receive confirmation that the payment has been made.
If the tenant disputes deductions
If the tenant disputes any default charge, the deposit replacement scheme will request evidence of the charges from the letting agent/landlord and then act as a first stage intermediary to resolve the dispute and attempt to negotiate an agreement with both parties.
If successful, the deposit replacement scheme will then collect the payment from the tenant and pass to Shaws Kensington/landlord. This means they will attempt to agree a settlement figure with Shaws Kensington/landlord to avoid the case being passed to the TDS third-party adjudicator.
If the dispute cannot be resolved by us and the relevant parties
They will make contact with the third-party dispute adjudication service provider (TDS) for an unbiased decision on the default charges, whose decision would be final.
Once a final default charge amount has been decided by the adjudicator, the deposit replacement scheme will raise an invoice to the tenant for the amount due, which upon receipt of payment, we will pass to Shaws Kensington/landlord.
If the final default charge amount is not settled by the tenant within 5 working days of a final decision (or agreement to the initial default charges), then they will pay, at their discretion, Shaws Kensington/landlord the same amount within 20 working days (subject to receipt of the supporting evidence) or 10 working days from the final decision of an adjudicator being made.
The deposit replacement scheme DRS Agreement will be for the lifetime of the tenancy.
The agreement will run for an initial 12-month period and Shaws Kensington will then be required to extend the agreement on an annual basis until the end of the tenancy.
They will alert Shaws Kensington/landlord before the expiry of the initial and subsequent periods of the deposit replacement scheme DRS Agreement and an online extension process will be available.
There would be no charge to the Shaws Kensington/landlord for any extension, however failure to advise them of a required extension will result in their services ceasing.
They will charge an annual administration fee directly to the tenant if the deposit replacement scheme DRS Agreement is extended. Whilst non- payment of this charge will result in the tenant being in default to them, it will not affect the agreement between them and Shaws Kensington/landlord.