Spicerhaart has agreed to offer deposit replacement scheme flatfair through its 100 lettings branches.
The independent agent will offer the product alongside traditional deposit services to its 15,000 landlords.
Under the proposition, tenants pay towards a ‘flatbond’ – a week’s worth of rent – before the tenancy starts. In return for this, landlords are covered for 12, rather than the usual six, weeks of rent.
Everything is managed on flatfair’s online portal, and as with a normal deposit, the tenant remains liable to pay for any damages costing up to the equivalent of six weeks of rent. The idea is that they are thus incentivised to behave responsibly.
Flatfair offers independent resolution by HF Resolution, which runs the MyDeposits scheme. If a tenant is found to owe money and fails to pay, landlords also get an option for flatfair to buy the debt from them so they are not out of pocket and the scheme then pursues the money itself.
Spicerhaart agents will work exclusively with flatfair so won’t offer other deposit replacement schemes but will still provide the traditional routes. Agents will also receive a referral fee for introductions to flatfair.
Chris Phillips, chairman of flatfair, said: “We’re thrilled to have partnered with such a well-established and progressive estate agency group that supports deposit-free renting.
“Deposit replacement schemes have proved hugely popular in Germany and Switzerland, and our simple, safe and customer-friendly alternative to deposits comes without the burdens and caveats of an insurance product. Our mission is to improve financial freedom in the residential property market through the use of technology.
“Not only do tenants benefit from no longer having to tie up money in deposits, but landlords and agents achieve higher earnings, fewer voids, a reduction in tenancy disputes and greater recovery of residual losses. This yields better overall investment return and improved customer satisfaction.
“Flatfair builds on the strengths of the Government’s deposit protection scheme whilst improving the way payments and protection work. This creates faster, more secure and fairer transactions, promoting better relationships between landlords and tenants within the private rented sector.”
Paul Sloan, lettings development director at Spicerhaart, said: “Many landlords are concerned that their property is not sufficiently protected by a tenancy deposit, particularly true in the light of the upcoming deposit-cap, and that lengthy void periods and penalties eat away at their rental yield. When a tenant doesn’t respond to claims, the deposit is frozen and landlords are left out of pocket.
“We were highly impressed with flatfair’s innovative technology and how easy the platform was to use. We’re confident it’ll mean not only lower up-front costs for tenants but also help make our landlords’ properties more appealing.
“In addition, faster payouts from the platform will help our landlords to re-let their properties more quickly.”