Using a vehicle as a ‘deposit’?

I do keep meaning to send a donation...will get to it soon, between Court cases! 😛

Sounds just like my job. Except I don’t do the guarantor thing.

And most of my tenants wouldn't pass any checks.

I've seen some of your videos, Mick -mine are often left in a similar state, have been ever since I started and it happens to all my other landlord friends in the area...it's not me, it's the standard of tenant on offer locally. Occasionally I consider cashing my 100-odd in for half a dozen detached/semi family houses in the Home Counties and rent to a better class of tenant...but then the returns aren't nearly as good...!

Hi Luke

I also let to the same type of tenants as you and Mick, and have similar problems, but I also do a lot of HMOs and these residents don't usually have cars or anything of resale value. If you are going to court and getting CCJs against the tenants, then presumably the bailiffs or HCEOs can seize their cars anyway?

There is a thing called a "Bill of Sale" which is basically like a mortgage on a person's chattels (possessions), i.e. a loan secured against the person's possessions. I looked into this a few years ago and it was all regulated by the Bills of Sale Act 1879? (year may be wrong). However, I know there has been a lot of changes in consumer credit legislation over the past few years so not sure if this area of law (i.e. Bills of Sale) has changed. If this has not changed then it could be a possibility for you, BUT I think it would probably put you into the realms of being a money lender (credit provider) and this may mean that you have to apply for a credit licence from the Office of Fair Trading or Financial Services Authority.

If you find a solution to this problem please post it on here as myself and other landlords that let to these types of tenants would really appreciate an effective enforcement method.

Reply to the comment left by "Robert Mellors" at "24/06/2015 - 14:54":

Bill of Sale Acts 1878 and 1882.

In the very unclicky even that do not already do so, start using landlordreferencing.co.uk if you along with a few other landlords in your area use it, you will at least not be taking each others bad tenants.

Yes, it wears u down eventually doesn’t it.

I’ve bought a few better ones last few years (Mark’s ruddy fault showing me the easy life less time on work, on expensive houses), which have cost me double what I normally pay for same return. I think am I nuts? But then better class of tenant as I get older is something I need.

Ooh Rob & Luke if we all lived locally, we could alternate weeks, where we only work one week out 3 to manage each others, 'cause no one manages them like us when we go away, do they.

As Romain says-

https://www.rla.org.uk/landlord/tenancy_deposits/tds-FAQ.shtml

Q.2b Can I take a deposit in some other form?
No - deposits can only be paid in the form of money. The legislation outlaws other transfers of moveable property attempted to give as security. Thus you could not take the tenant's Rolex watch off him to keep it during the tenancy as security!

What about taking just a small deposit, say £100, and a guarantor?

Or just put your rents up to cover the extra risk.

Reply to the comment left by "Monty Bodkin" at "24/06/2015 - 16:21":

Although you could not take a car (or Rolex watch etc) "as a deposit", taking it a security on a loan via a bill of sale which is then used as a deposit may perhaps be possible, but is fraught with possible complications and regulations. Perhaps the landlord could team up with a local "log book loan" company and see if they would set up some sort of arrangement that will pay out to you if the tenant defaults on their tenancy obligations?

Reply to the comment left by "Monty Bodkin" at "24/06/2015 - 16:21":

Everyone pays an admin fee of £200 and all of my tenants have a guarantor. I can't put rents up too much or take a deposit because along with the first month's rent, it is too much for the local folk to raise.

I have a fantastic success rate in Court, but I handle all the cases myself and it is extremely time consuming dealing with idiotic defences by guarantors, (e.g. "I don't owe the rent because I'm a pensioner and my granddaughter decorated that property -it was nicer when she left than when she went in!")

At least 50% of my time is now taken up with dealing with ongoing cases.

Mick, maybe that's the trade-off...better properties with less return but equally less hassle.

Robert, I'll look into the Bill of Sales but feel you're right about credit and the licences/paperwork that may bring. I wish the Council would follow through with the threat of refusing to assist persons who have made themselves homeless, particularly through non-payment of rent. If they messed up and knew they had nowhere else to turn, they might think twice about causing havoc.