Revenue and commission. Is it really secondary to the tenants needs?

Ethan Sykes 201047 Unsplash

Tenancy deposit alternatives vary in the market from insurance-based products to technology, with creating an affordable option for tenants being the purported main focus. However, recent scrutiny of revenue and commissions within the deposit alternative market have raised questions.

Fears are emerging that letting agents are chasing the high commissions offered by deposit-free schemes as opposed to partnering with companies that offer clear benefits to the tenant. This worrying trend casts a negative light over companies whose business model focuses on improving the renting experience for all parties involved.

flatfair’s, founder Franz Doerr, states, “We offer competitive commission rates to agents however, this should not be the primary motivation for using flatfair. Our core value is to redefine the relationship between the managing agent, landlord and tenant by creating openness and transparency. This ultimately leads to happier tenants and landlords.”

The flatfair platform integrates technology with clarity built into its core, making it a unique player in the market. Although commission will always be a factor, it plays a small role in the justification of establishing products such as these. Situations have been reported where agents have snubbed a deposit replacement scheme because a rival has paid higher referral fees, and tenants have already started claiming they were mis-sold the product.

Thereby, this presents a risk that agents choose the deposit replacement scheme that pays the highest commissions rather than checking its suitability. “This is a concern to us,” weighs in Franz. “Some operators charge recurring fees however at flatfair we have worked hard to ensure that we have a clear fee structure. We believe that the cost to the tenant should be proportionate to the benefit. Other operators within the market charge extortionate rates and renewal fees.”

The spectrum of tenant deposit alternative schemes may present a variety of choice for both tenants and landlords but as the only provider that offers up to 12-weeks protection, a single one-off charge for tenants and no renewal fees, the benefits of flatfair outweigh those of its contenders.