Reasons for a Deposit Dispute

In a recent survey by the TDS, the following were highlighted as being the main reasons for an end of tenancy dispute:

• Cleaning
• Damage
• Redecoration
• Rent arrears
• Gardening

It is interesting to note that rent arrears is not in the top three! Cleaning and damage are by far the most important and with good reason; both can be costly and if properly noted at the start, both can be easily shown to be the fault of the tenant. A property can be clean but tired, whereas dirt is just dirt and any property could need cleaning if not properly looked after during the tenancy. Damage is not wear and tear and there is a distinction as the former constitutes excessive lack of care – or worse, negligence. The latter is what would be considered reasonable in any property, allowing for the number and make up of the occupants and where particularly the issue has been noted in the property. Hallways, lounges and kitchens will always experience more use than bedrooms therefore greater wear and tear can be expected.

Hence, it is imperative that as well as a proper inventory being taken, the tenancy agreement (AST) clearly sets out the tenants` obligations, which will be specific to each type of property – the wording MUST be fit for purpose!

Deposit registration

Just a quick reminder that any deposit must be registered within 30 days of receipt; even if the tenancy starts after that period. The Prescribed Information must also be issued within 30 days of the deposit receipt. In order to be legally compliant, it is often safer to issue this information before the tenancy agreement (AST) is signed and again after registration. In these days of litigious complexity, it is better to be safe with possible duplication of paperwork, rather than have nothing at all.

Deposit Pitfalls!

These are just some general guidelines for ensuring there is less of a problem with any deposit disputes at the tenancy end.

As a general rule, when renting out a property you should keep the receipts and invoices given as they are non-negotiable proof of any work done and the costs involved. Make sure any changes to the agreement are documented so again there is no argument over what was agreed.

If there is a possible problem, it can sometimes be advisable to do a brief “Pre Check Out” visit to pre-empt later problems by discussing any issues and giving the tenant a chance to rectify the situation. If work is required, the tenant needs to be aware that the Landlord award is compensatory and does not necessarily have to be spent on the repair at that exact moment in time; in reality, it can be spent how the landlord likes.

In some cases a claim can be made on the insurance and the excess can be deducted from the deposit, sometimes saving the tenant`s deposit as well.

Landlords need to manage tenant`s expectations as there is a difference between “Use” & “Abuse”! Use can result in wear and tear whereas abuse can lead to damage or claims of negligence. All actions (or lack of) have a direct consequence, which in the case of a property can be damage, resulting in the need to use part of the deposit.

Words as a descriptive tool are invaluable and a landlord should never just rely on photographs nor a brief description; words can paint a picture and describe smells, both evoking a mental picture, which can be very vivid!!

Do note there is also a vast difference between “Professionally cleaned” and “cleaned to a Professional standard”; as the former should carry a certified invoice and the latter could just be a good cleaner. Lastly, it is important to make sure all items are noted at the start, so a comparison between the tenancy start and end can easily be seen and any differences noted.

If you have any queries on this seemingly simple yet technically complicated matter please do not hesitate to contact me at phil@sunshinerl.co.uk.