The Government have legislated that deposits will be limited to 5 weeks rent as a maximum amount for tenancies where the annual rent is below £50,000. (Deposits for tenancies where the annual rent is £50,000 or more are limited to the equivalent of 6 weeks rent). Historically, letting agents and landlords would typically take 6-8 weeks rent equivalent as a deposit and possibly a surplus if the landlord permitted a pet to reside in the property. This was to protect the landlord from any additional damage that may pet related.
The new rules mean that regardless of whether a tenant has a pet or not, the maximum deposit that can taken is 5 weeks rent equivalent. So why would landlords rent to tenants with pets? There is a work around which is legal provided it is transparent and clear from the adverts. Landlords can charge a higher rent amount to tenants with pets and as long as this is stated clearly on the advert, then this is deemed to be legal.
For example: A property may be £600 per calendar month but if the landlord will consider a pet, they may want to charge +£35 per calendar month for tenants with a pet (subject to landlord approval). This then compensates landlords for potential additional wear from letting with pets.
The odd thing is, the legislation is designed to make costs fairer and lower for tenants. When landlords charged a higher deposits for allowing pets, the deposit was refundable whereas a surplus rent will not be. One may argue, the new legislation is flawed, but our job as letting agents and landlords is to follow the new legislation but also ensure we are adequately protected. Therefore, whilst deposits may be capped at 5 weeks rent equivalent, we can charge more for allowing pets and as long as we agree with our landlords what this looks like and is advertised clearly, there will be no problems in letting with pets and charging a surplus rent.
For further information on this policy, please speak to James Powdrill, Associate Director on 0116 326 6464 or email firstname.lastname@example.org