With Ome’s Deposit Replacement Membership, the tenant pays a small monthly fee instead of a traditional upfront cash deposit to protect the landlord against breaches to the tenancy agreement, such as damage or unpaid rent or bills.
As long as the tenant has paid one month of their membership the landlord is fully protected for the duration of the tenancy, even if the tenant stops paying mid-tenancy. Here, we explain how.
Deposit replacement schemes are relatively new to the private rented sector, especially when you consider landlords have been taking deposits for over 300 years.
As the cost of living and renting rises, deposit replacement schemes have been introduced to help with renters cashflow.
They provide an alternative to renters having to find around £1,000 for a traditional deposit every time they move into a new property, avoiding the ‘double bubble’ effect – the need to find a second deposit while the first is tied up in the existing tenancy.
With Ome’s Deposit Replacement Membership, the tenant pays a small monthly fee of around £10 or less on average, that protects the landlord for the equivalent of five weeks’ rent – the same as a traditional deposit, but in a way which is much more manageable for the tenant.
Subscription models, such as Netflix, gym memberships and Hello Fresh, are becoming more popular as they help spread the costs of otherwise expensive purchases and upfront payments. They also let the subscriber turn off their membership when it no longer benefits them, rather than paying for a long-term contract that may not be suitable for them anymore.
We think the same model can apply to tenants providing landlords with security. Our Deposit Replacement Membership helps tenants reduce the initial upfront fee whilst allowing a tenant pay for a membership for the duration of their tenancy, rather than a single product that spans a year or two.
With our Deposit Replacement Membership, as long as the tenant has paid for one month of their membership then the landlord is protected for the full five weeks’ rent for the entire length of the tenancy.
The issue of the tenant not paying is our responsibility, not the agent’s or landlord’s, so in the event that this happens, we will resolve this with them.
There is no need to worry as we will honour our protection with the landlord and ensure they have the same protection as they would with a traditional cash deposit.
The tenant must provide their payment details when they sign up to our Deposit Replacement Membership and we would notify the agent or landlord when this has been done.
If they have not supplied payment details their membership will be incomplete; the tenancy would be unable to start until payment information has been uploaded and confirmed. This is no different to a traditional cash deposit, as the tenancy would not start before receipt of the deposit.
More and more agents and landlords are opting to offer tenants the choice of using a deposit replacement scheme alongside traditional deposits.
By providing tenants with the choice of not having to pay an upfront deposit and offering financial flexibility, renting becomes more desirable.
There are also many benefits to agents and landlords, such as faster payments following a dispute.
We’ve previously explained what happens if the tenant refuses to pay after a dispute and have put together a comprehensive guide to everything you need to know about deposit replacement schemes. But if you want to know more you can talk to one of our team via hello@omehq.com, live chat or call us on 0345 634 5402.
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