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Canopy urges landlords to ‘hand back deposits to renters in dire need’

More needs to be done to help support tenants, especially those facing financial hardship as a consequence of the Covid-19 pandemic, according to Canopy. 

The firm is concerned that many tenants will potentially face homelessness from 20 September 2020, when private landlords will be able to go to the courts to start eviction procedures. 

Though the government has said it wants the courts to be a last resort and landlords to ‘exhaust all possible options’ before considering eviction, including flexible rent payment plans, those tenants who have fallen behind on their bills may be in danger of losing their homes.


Canopy is urging landlords to release the cash in deposits and replace them with a deposit replacement insurance policy, so that tenants can pay their rent. 

However, it is worth pointing out that Canopy has a vested interest in trying to encourage more people to sign up to a deposit replacement insurance policy. 

Canopy’s own deposit free insurance provides landlords with eight weeks protection as opposed to five weeks with cash deposits. The policy is purchased by the tenant, is a one-off policy premium, and covers both parties for the length of the tenancy contract. Similar to a traditional cash deposit, Canopy protects the landlords against damages and unpaid rent.

The tenants remain responsible for settling any financial loss or damage suffered by the landlord under the assured short hold tenancy agreement. If the tenant does not settle the claim with the landlord within ten working days, then the insurer would pay the landlord and recover the amount from the tenant. If, however, the tenant has suffered a major life event (e.g. job loss, critical illness), in that exceptional scenario, Canopy would settle the claim with the landlord and not seek recovery from the tenant. Claims are capped at the coverage limit being eight weeks deposit cover. 

Tahir Farooqui, founder and CEO of Canopy, said: “Whilst the UK government has taken a number of steps to help families tackle the potential economic damage caused by the pandemic, including mortgage holidays, millions of renters in the UK are finding it incredibly hard to manage basic financial obligations, such as paying rent or bills.  

“We are urging landlords to hand back cash deposits to renters in dire need and replace them with our low-cost, deposit insurance policy. It’s a one-off premium, paid by the tenant and the only product in the UK market which in addition to covering the landlords’ deposit, also protects tenants in the event of major life events e.g. critical illness or job loss. 

“COVID-19 is having an enormous impact on the livelihood of renters and we feel that now, more than ever, is the time for the industry to come together to bring hope and support to the millions of renters and create a true sense of solidarity and community.” 

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Poll: Are you a fan of nil deposit schemes as an alternative to a traditional deposit?


  • icon

    I wouldn't trust them, we all know what these tin pot insurances companies are like when it comes to paying out on a claim

  • Kristjan Byfield

    With the backlog in the courts would this really be a wise move? I think not.

    Ruan Gildchirst

    This means the tenant will not only be living rent free for the next two years but even gets their deposit back

  • Matthew Payne

    The only winner from such benevolence would appear to be canopy. The Landlord would be more exposed and the tenant's cash flow even worse off as a result of the fee due. I wonder how many other businesses have considered how they can profit from the rent arrears crisis at the expense of those already involved suffering from huge financial difficulty?


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