Can I charge the tenant a higher rent, take no deposit, but offer to refund some of the rent at the end of the tenancy if he leaves the property in good order?

November 3, 2014

Can I charge the tenant a higher rent, take no deposit, but offer to refund some of the rent at the end of the tenancy if he leaves the property in good order?

As in practice this has the same effect on the tenant as taking a deposit, the Courts might well view it as a sham, with no purpose other than to avoid the regulations. Consequently you risk the penalties for non-compliance. In addition, bear in mind that an AST tenant can, within the first six months of his tenancy, refer the rent to the Rent Assessment Committee, who may order it to be reduced if it is higher than the rents paid for similar properties in the area that are also let on ASTs. This could put you in the position of having to reduce the rent and still being obliged to refund part of it if the property is left in good condition!

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