Recent data released by the Tenancy Deposit Service, one of the approved deposit schemes, show that the number of deposits they held during 2020 rose to 4.1 million. During the same time the number of deposit disputes they helped mediate reduced by over a thousand during the same year on year period in 2019 -2020.
Some of this reduction may have resulted from the introduction of the Tenant Fees Act in the summer of 2019, which helped to provide clarity over the charges a landlord could make.
Deductions from deposits at the end of a tenancy are always an area for debate. Both the landlord and the tenant will feel justified in their claims and, on occasions, it can prove difficult to reach an agreement. Essentially it boils down to the condition of the property at the start and end of the tenancy. Here are some pointers to help when it comes to a discussion over the deposit.
* Ensure you have a thorough, up to date, inventory and schedule of condition at the start of the tenancy.
Over the years we have seen an interesting collections of inventories. From those that resemble a small novel to those written on the back of a shopping receipt. An Inventory should not just be a list of items in the property. It is vitally important that the condition of the property at the start is factual and this should be clearly recorded in writing and using photographs. It is a requirement on the tenant to return the property in the same condition as it was given to them. So, as an example, if the landlord has had a professional clean carried out, this can be recorded on the Inventory, and whilst you can not require the tenant in the tenancy agreement to have a professional clean at the end, they must at least return it with the same standard of cleanliness.
The tenant should be given a copy at the start of the tenancy and given the opportunity to review, make any comments and sign.
* Meet your tenants at the start of the tenancy
This is a great time to review the property together using the Inventory and Schedule of Condition. It also gives both parties the chance to discuss any repair issues, for the tenant to understand how to use the appliances and any other useful information.
It is also helpful to have a check in report carried out to compliment the Inventory.
* Keep a record of receipts and documents
Keeping a clear record of receipts for cleaning or items of furniture will provide a reference point for costs. This protects both the landlord and the tenant.
* Keep a record of communications
Unfortunately things do get lost in translation over time. Keeping a record of conversations, emails and texts will help in the event of any misundertandings at the end of the tenancy.
* Carry out property inspections during the tenancy
Checking the property during the tenancy will help you keep an eye on any maintenance issues, and provide an opportunity to discuss any issues regarding the use of the property.
* At the end of the tenancy
A few weeks before the end of the tenancy it is helpful to provide the tenants with another copy of the Inventory and Schedule of Condition. Our experience shows that this gives the tenants the opportunity to ensure the property is returned to the same standard. It is sometimes useful to arrange a visit so that you can point out any areas that the tenants may need to consider before the end.
Once the tenancy ends invite your tenants to a check out appointment. It is much easier to discuss potential deposit claims face to face, not least because you can normally come to an agreement. This reduces the chances of needing to use the mediation process, and more importantly means the deposit monies can be returned to the tenant quickly.
* The deposit belongs to the tenant
Before the deposit legislation was introduced in 2007, there were plenty of tales of landlords enjoying a holiday having kept hold of a tenants deposit without reason. The legislation prevented this from happening and reminded landlords that the starting point is that the deposit belongs to the tenant. It is important to keep this in mind and deductions from a deposit should only be made where it is reasonable to do so.
*Fair wear and tear
A landlord should consider how long the tenants have occupied the property as this will give you a sense of what is a fair amount to deduct. A long term tenancy is bound to produce more wear and tear to the property, where as a shorter tenancy will not. The same applies to the life span of items. For example it would not be fair to charge a tenant for a brand new carpet because they spilt a glass of red wine on a small area of your twenty year old medium quality carpet. In this case you would look to apply a compensatory amount or for a clean of the affected area.
* Return undisputed amounts
It is rare to need to retain the whole deposit, so once you have established the amount you may need to charge the tenant, return the undisputed amount. The tenant may be reliant on this money to help them with their next tenancy.
The vast majorty of tenancies end amicably and deposits returned with both parties satisfied. However, on the occasions where this doesn’t happen providing clear evidence is the key to mediating a happy outcome.
If you are a landlord facing issues regarding what you should or shouldn’t claim for on a deposit, we’d be happy to give you the benefit of our experience. Please do get in touch.
Please note the date this article was published as the law may have changed since it was posted. You should always seek independent legal advice if you are intending to rely on any of the contents.All resources & news