Landlords worried about the high cost and bureaucratic burden of complying with new tenancy deposit protection rules are being offered a revolutionary solution.

Residential Landlord has teamed up with Letcare to offer the Tenant Guarantee Scheme www.iguarantee.co.uk.

From April landlords who take deposits will have to put the money into a custodial tenancy deposit protection scheme or pay a premium for an insured scheme – up to £95 for a single property. But landlords who do not take deposits will not have to join.

The Tenant Guarantee Scheme avoids the costs and bureaucracy involved in tenant deposit protection and allows landlords to let their properties in confidence, without taking deposits, while having better security. This is because tenant members will be insured, with the benefit assigned to the landlord, for more than a the deposit would have been

The scheme has other advantages. As members are pre-screened, landlords will not have to undertake credit checks. They will be able to check the good standing of tenants immediately by checking our database. And because tenants will be attracted by the ‘no deposit’ approach they are likely to have a larger number of potential tenants to choose from.

For tenants, who will pay for the screening and insurance cover before joining the scheme, there will be the advantage of not having to pay substantial deposits – but the constraint that should they prove bad tenants they will be expelled from the scheme.

‘We believe landlords will want to recommend that their tenants joint the scheme. Some may even insist on it or pay the joining fee for the tenant said Tenant Guarantee Scheme director Karl Hopkins.

‘The combination of what will amount to a “good tenant” database that can be checked instantly, better financial protection than can be provided by a deposit, and the lack of hassle that will inevitably be involved in any of the three tenant deposit protection schemes – not to mention the cost saving – will be a big bonus for landlords. Tenants will gain too because they will be able to rent better properties that might otherwise have been out of their reach for lack only of a sufficiently large deposit.

‘The revolutionary part of the scheme is twofold, first that it is the tenant who will insure him or herself and have a vested interest in remaining a member of the scheme because of the benefits it will offer; and secondly that we will have a database of tenants who can demonstrate an exemplary record. Added to that there will be very little paperwork involved’.

• The Residential Landlords Association has warned landlords against more exotic ways of avoiding the tenancy deposit protection rules by, for example, charging higher rents with a cash back promise if the property is left in good condition, or by taking post-dated cheques. Either approach would invoke the deposit protection rules, said the RLA. But it agreed ‘rent Insurance is an option but someone has to pay the premium’.

• Meanwhile local councils have been gearing up for the deposit protection scheme. Hounslow Council said it ‘has been working hard to inform landlords about this new duty. On February 23, the local authority held an event in Brentford for landlords to hear about the scheme and how it will work. More than 100 landlords took that opportunity.

‘We were very pleased with the attendance for this year's landlords fair. It shows the vast majority of landlords in this borough take their responsibilities very seriously, and that is good news for tenants’, said Councillor Mark Bowen, who is deputy leader of Hounslow Council and has responsibility for strategic housing.