Somerset West Landlord & Tenant Services (SWeLT)- Deposit Guarantee Scheme Policy Document 1. Introduction 1.1 Anyone looking to rent a property from a private landlord, may be required to provide a cash deposit to cover any damages/rent arrears that can occur during the tenancy. It is often difficult for prospective tenants to raise the cash for a deposit, particularly if they are on state benefits or a low income. 1.2 Suitable, affordable accommodation is in short supply. Sedgemoor, Taunton Deane and West Somerset Authorities, in conjunction with Taunton Association for the Homeless (TAH), are working together to assist tenants and landlords where a written guarantee can be used in place of a cash deposit. It is called the Deposit Guarantee/Smartmove Scheme (sometimes referred to as the Bond). Please note: This policy applies to Deposit Guarantees administered by Taunton Deane Borough Council and Sedgemoor District Council. For information on the schemes operated by TAH and West Somerset Council please refer to the following links (http://www.tah.org.uk/smartmove.php) and (http://www.westsomersetonline.gov.uk/housing/advice-for-tenants/deposit-scheme) 2. What is the Deposit Guarantee Scheme? 2.1 The guarantee scheme is a written guarantee provided by your local Council in place of a cash deposit, which will indemnify against any damage to the property or rent arrears by the tenant, up to the value of the deposit guarantee. Each Council provides the scheme for accepted homeless households and those threatened with homelessness, under section 193 of the Housing Act 1996 as amended by the Homelessness Act 2002. 2.2 For households who the Council does not have an accepted duty to rehouse (as defined above) the Council may make a referral to the Smartmove Scheme administered by TAH. Please speak to your local Council for more information or refer to the TAH link listed above. 2.3 The Deposit Guarantee covers the first 12 months of the tenancy giving the tenant a chance to save a cash deposit to give to the landlord if they remain in the property after 12 months. Refer to Section 10 of the Policy for options to extend the bond. 2.4 Claims against the scheme cannot exceed the value of the agreed Guarantee. All paid claims will be recovered from the tenant. 3. Who is eligible for the Deposit Guarantee scheme? You must be homeless or threatened with homelessness You must not be able to raise a deposit by any other means You must have a priority need for housing (a member of the Housing Advice Team will determine your priority) 1
You must be over 16 years of age You must have a local connection to the area in which you require assistance i.e. Sedgemoor, Taunton Deane or West Somerset. If you cannot say yes to any of the points listed below then you do not have a local connection: Eligibility Yes No You have lived in the local authority area you are applying to for 6 months in the last 12? You have lived in the local authority area you are applying to for 3 out of the last 5 years? Have full time employment in the local authority area you are applying to, or either be self employed or be in permanent paid employment and be contracted to work a minimum average of 16 hours a week. Have a strong family connection (e.g. Parents, brother, sister etc. The family member should have lived in the local authority area you are applying to for at least 5 years) 4. What does the Deposit Guarantee cover? The accommodation for which the tenant has exclusive occupation, where there is:- Damage to the property Theft of the Landlords effects Unpaid rent 5. What the Deposit Guarantee does not cover? Charges and services e.g. Fuels, bills Administration costs Communal parts of the property 6. What type of accommodation does the Scheme cover? 6.1 The Deposit Guarantee covers all types of private rented accommodation including flats and houses. 7. What is the financial maximum covered by Deposit Guarantee? 7.1 The Deposit guarantee agreement will set out the maximum covered. 8. Is the Deposit Guarantee exempt from the Tenancy Deposit Protection Scheme? 8.1 Yes. The Deposit Guarantee does not have to be protected by the Tenancy Deposit Protection Scheme as it is a written guarantee provided by the Council. 2
9. How does the scheme work? A prospective tenant must approach the relevant Council to see if he/she is eligible for the scheme before an application will be considered. After this he/she may approach a landlord/letting agency that has a property to let. If the landlord/letting agent is happy to accept a written guarantee from the Council in place of a cash deposit then the tenant will complete a deposit guarantee application form, which needs to be signed by the landlord/letting agency. The tenant will then hand the application to the Council and it will be checked against the current Local Housing Allowance. The Council will check the affordability and make a decision if the deposit application will be accepted or rejected. The rent must be set at an acceptable level for the type and size of property as defined in the Local Housing Allowance rates which are set out on a yearly basis. Any shortfall in rent between the Local Housing Allowance awarded and the actual rent charged will only be allowed at the discretion of The Housing Options Manager/Senior Officer If accepted the landlord/letting agent will be contacted by the Council and an inventory date arranged. At the inventory the deposit guarantee contract will be required to be signed by both the tenant and landlord. Once the inventory has been completed and the deposit guarantee contract signed by all parties the tenant is free to move into the property with consent from the landlord/letting agent. The process will normally take 5-8 working days. PLEASE NOTE: The tenant must not move into the property before the inventory and contract guarantee have been completed and signed or the deposit guarantee will be withdrawn. 10. Option to Extend the term of the Bond In some cases there will be an option to review and extend the bond guarantee for a further 12 months. The option to review will be carried out at the Council s discretion where the circumstances of each household will be considered on merit at the time of the review. The option to review a bond can be offered at the end of the first 12 months. A further 12 months bond can be guaranteed provided a new 6 month AST is signed. There may be circumstances where the Council will not agree to renew the bond these may include (and not exclusively) incidents of anti social behaviour, misconduct in the tenancy, non repayment of rent in advance, rent arrears, the length of time the tenancy has been held and complaints against the landlord. In any event the Council will not offer a bond guarantee for the lifetime of a tenancy and will not agree to automatically renew a bond every 12 months. 11. Exclusions from the Scheme 11.1 Applicants will not be accepted onto the scheme where there is evidence of problems related to misconduct in a previous tenancy guaranteed under this or any previous deposit and rent in advance schemes administered by the participating Councils. In addition applicants will not be accepted onto the scheme where they owe the Council 3
money for damages and/or rent arrears paid under this or any previous deposit and rent in advance schemes administered by the Council. In the event of outstanding debt owed to the Council consideration may be given to a further application where the person has maintained a repayment plan for at least three months prior to a new application being made. In these cases the approval of the Housing Options Manager /Senior Officer must be obtained before the applicant can be accepted on to the scheme. 11.2 The property must be in acceptable condition and meet current fire, furnishings, gas, oil and electrical safety standards. It is the landlord s responsibility to ensure that the property is maintained to a decent lettable standard and all the above safety checks have been carried out and are current and up to date. This includes gas and oil safety checks for boilers and fires where a current landlord s gas or oil safety certificate must be held for all appliances. The landlord should provide working smoke alarms in hallways and landings. The landlord must issue a proper assured shorthold tenancy agreement and comply with all relevant Landlord and Tenant regulations, Health and Safety Regulations and Housing Acts, have current building insurance and be responsible for daily management of the tenant and property. 12. What happens if there is a claim on the deposit guarantee? 12.1 In the unfortunate event a claim needs to be made at the end of the tenancy within the initial 12 month period, a claim form can be obtained from the Council who provided the guarantee :- 12.2 Somerset West Landlord & Tenant Officers:- Taunton Deane Borough Council Pippa Hughes Tel: 01823 356325 Sedgemoor District Council Kirsty Coles Tel: 01278 435342 Smartmove Scheme Yvonne Hiscock Tel: 01823 271326 12.3 No payments will be made under the deposit guarantee scheme if: The tenancy is still running The Landlord has not notified the Council within 7 days of knowing the tenant had vacated the property The Landlord does not make a claim within 8 weeks of knowing the tenant has vacated the property If the Landlord is in breach of any of the terms in the Deposit Guarantee contract Damage that is attributable to fair wear and tear will not be covered Please note: The Tenant will be legally obliged to repay any money to the Council if a claim is made on the Deposit Scheme. For more information on the Bond Guarantee Schemes please contact the Officers on the numbers above. 13. Landlord Accreditation 13.1 Sedgemoor, Taunton Deane and West Somerset Authorities also provided a Free Landlord Accreditation Scheme to assist local landlords. 4
13.2 Membership is free whatever the size of portfolio, below are a list of incentives available to those landlords wishing to join:- Grants up to 3,000 Low interest 4% Loans from 1,000-15,000 Dedicated phone line to Housing Benefit and Housing Advice Free advertising on Homefinder Somerset Membership card and certificate Energy Performance certificates at a discounted rate A regular e- newsletter keeping you updated on new legislation Free copies of Assured Shorthold Tenancy and Section 21 Notices For more information on the scheme, please visit the Accreditation webpage http://www.sedgemoor.gov.uk/index.aspx?articleid=6404 Or contact the Accreditation Officer (Esther Carter) email: Privatesector.housing@sedgemoor.gov.uk 14. Diversity and Equal Opportunities 14.1 The Councils and partner housing providers are committed to reflecting the full diversity of the community it serves and to promoting equality of opportunity for everyone. 14.2 The Councils and housing providers operating the scheme will not conduct business with landlords or letting agents who are unprepared to conform to these standards. 14.3 This policy and all associated documentation and leaflets can be made available in large print, Braille, tape format or in any other languages, on request. 15. Monitoring and Review 15.1 This policy will be monitored regularly and reviewed annually by the Somerset West Landlord and Tenant Services Board and is operated at the discretion of Sedgemoor District Council and Taunton Deane Borough Council, who reserve the right to alter or amend the scheme without consultation. There is no legal obligation for the Council s to run the scheme and it is the landlord s responsibility to manage the tenant and property which includes collection of rent, repossession of property, full legal compliance in relation to the maintenance of equipment and property and that tenancy conditions are being adhered to. The scheme operates subject to sufficient financing being available and can be withdrawn either in part or whole where insufficient resources exist. 5