Why do I need a deposit clause in my Agreement?
The simple answer is that everything these days has to be clearly stated and understood. As the Assured Shorthold Tenancy (AST) Agreement is the rock around which the landlord and the tenant`s legal rights and responsibilities are established, it is fundamentally important that from the start the tenant understands what the deposit may be held against.
The areas where a claim could be made from the deposit, need to be clearly stated and these should cover costs incurred through damage, uncleanliness or redecoration of the property as a result of the tenant`s action/inaction.
Failure to embed this into the AST could cost the landlord dearly when the tenancy ends, if the property is not returned in reasonable order or in a sub standard condition allowing for the duration the tenancy.
Five top tips to be included in the Deposit Clause which will provide future protection for the landlord and enable a claim to proceed without too many questions and delays:
- Outline what the deposit can be used for.
- Put a clause in the tenancy agreement obtaining consent to adjudication by all joint tenants for new tenancies.
- Include unpaid utilities under what the deposit covers – this also covers council tax and water rates.
- The clause needs to make clear whether the tenants` deposits are jointly or severally liable – thus avoiding individual arguments over responsibility between the tenants relating to a claim.
- Check the wording is clear and in plain English, with no ambiguity so that both the tenants and adjudicators will understand and can clearly see what was intended. Do not use jargon!
A deposit dispute will normally arise from either a good or poor inventory, leading to both sides believing the other to be in the wrong. A good one is an accurate snapshot of the contents, condition and cleanliness before a tenancy starts – it needs to be accurate and objective to what is visible.
Here are 5 tips for making an inventory a vital and dependable document that can be relied on by both parties at the tenancy end:
- Avoid jargon, technical terms and abbreviations, but if used provide an explanatory glossary within the inventory.
- Dated photos add excellent supplementary evidence but DO NOT replace a written inventory.
- Make sure both the tenant and landlord sign the original document to give written evidence of acceptance at the tenancy start.
- NEVER use an old inventory for a new tenancy, make sure it is an accurate and up to date document.
- Attention to Detail is paramount as any adjudicator can only work on the evidence submitted – it is in both party`s interest to make it a fair and accurate record of the property as seen pre tenancy. Do not do an inventory too early; the closer the visit to the tenancy start, the better and more reliable the information recorded.