Resolving Deposit Disputes With Tenants

Fri 04 Aug 2017

Damaged furniture, marks on walls, carpet stains, redecoration and mould are the most common reasons given for deducting money from tenants’ deposits, according to fresh research. The same report suggests the majority of tenants polled (68%) feel they have been treated unfairly by deposit disputes.

Percentages like this do seem to indicate that renters may be losing out, but these disputes are a major headache for all – often complicated by incomplete or inadequate inventories at sign in and move out stages. 

As your agent, we can provide you with a professional and fully independent inventory service which can be used as a fair measure at the end of the tenancy. We can also educate tenants on their legal responsibilities and advise them of a landlord’s expectations at checkout stages.

Of course, the best way to resolve deposit disputes between landlords and tenants is early intervention before things get out of hand. As part of our managed service, we can negotiate a settlement on your behalf if you wish. This is something that any of the free tenancy deposit adjudication schemes will require evidence of, prior to making an award for compensation. We can also ensure that the correct deposit use clause is included in your tenancy agreement, which sets out what deductions you may be entitled to. 

Because the deposit money legally belongs to the tenant, landlords can only make deductions where this has been agreed by the tenant, such as in a clause in a tenancy agreement that they have signed. Without this, you are unlikely to be awarded anything at all, which could leave you hundreds of pounds out of pocket in the event of any damage being caused to your property.

Working through the list to minimise risk

Taking a more tenant-friendly approach to the problem of withheld deposits, we thought we’d work our way through the list of reasons given for disputes and try to offer alternative solutions, which in the long term could help prevent more deposit disputes occurring. It is worth noting that disputes over deposits can take a month or more to be resolved if you need to go down the deposit scheme adjudication route. This means you might have to carry out essential repairs to the property prior to any award being made, so that you can re-let it again.

It is now less common for landlords to offer fully or semi-furnished properties to rent, except perhaps in inner cities and in student accommodation, so consider whether it is absolutely essential that you provide this. Ultimately, even if the tenant pays for any damage with their deposit money, you are still going to have to dispose of and replace any damaged furniture (which could include sofas, tables, kitchen cupboards and even doors) or employ a tradesman on your behalf to do so. A time consuming business!

Traditionally, many landlords refurbish their property before letting it out, as a well-presented home is sure to attract more quality tenants, and we would still encourage this. However, in order to minimise risk, you could consider whether carpets are really necessary, when they are cited as one of the main reasons for deposit disputes. Not only do they stain easily and age rapidly with constant cleaning, but accidents can happen to the most careful of tenants. 

Why not consider putting down hard-wearing laminate flooring instead. It still looks attractive but is more practical than carpet. If areas of this get damaged, you can easily replace a section of it rather than having to replace the whole floor. When you take into account it probably costs around £2000 to carpet an average 3 bedroom property, laminate flooring is definitely an option worth exploring. 

With regard to marks on walls, which are probably caused by photo hooks and shelving being put up and then taken down again by the outgoing tenant, you could consider leaving permanent fixtures up so that new tenants already have somewhere to hang their pictures and mirrors. They would then be less inclined to get the drill out and start making new holes where you don’t want them to. This could work even more to your advantage because tenants who feel at home in a property are more likely to stay and treat it well. 

You could go one step further and give tenants permission to carry out their own decoration, providing they discuss colour schemes with you first. If you’re worried about the quality of their work, insist on them using a professional decorator and ask to see evidence (a receipt or invoice). This could go some way toward helping to reduce your decorating bill whilst accommodating your tenant’s wishes. If you do decide to go down this route, we suggest you wait until the tenant has been in the property for at least six months to make sure they are reliable.

As your agent, we can offer advice to tenants on how to prevent the build-up of condensation. Damp and mould can affect their health so it is important to get rid of it. You can help your tenants prevent the build-up of condensation by making some of the following suggestions:-

•Put lids on saucepans, dry washing outside and avoid using paraffin or 

bottled gas heaters

•Open the bedroom window for 15 minutes each morning

•Heat the property a little more if possible

•Ventilate rooms regularly, leaving doors open to allow air to circulate

•Open windows when cooking, showering or bathing if practical

It is important that you do your bit too because moisture in buildings can be caused by leaking pipes, rising damp in basements or ground floors, or rain seeping in because of damage to the roof or around window frames. In new-build properties damp can occur if the water used when the house was built is still drying out.

Proposed New Legislation

New legislation proposed by the Government means you will in future no longer be able to take more than one month’s deposit from a tenant when they move in, which is a real worry for landlords as there are fears that tenants will now revert back to the assumption that they can use the deposit to pay the last month’s rent.

If this becomes a trend, and any damage has been caused to the property, you could lose out, because even if the whole deposit is returned to you it may not be enough to compensate for all the damage caused.

The current average rent in the UK outside London is £790 per month (£1,934 in the capital), so you may want to ask yourself if a month’s deposit is going to provide you with adequate protection, or if you need to consider alternative solutions that will continue to protect you against damage to property caused by tenants. 

To find out how we can help or to enquire about any of our managed services, please get in touch.