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Tenancy Deposit Deductions, a Landlord’s Guide
Since April 6th 2012, landlords have been legally required to place deposits from assured shorthold tenancies (started or renewed after April 6th 2007) into a government-approved tenancy deposit protection scheme. This legislation reduces the chance that renters will be conned out of their money by unscrupulous proprietors, but what does it mean for honest landlords?
According to a survey carried out by Tenancy Deposit Scheme in November 2012, 31 per cent of landlords believe deposit protection schemes have been a hindrance to the private rented sector. This is likely down to the fact that, should the tenant disagree with a deposit deduction, the funds are locked in the scheme until both parties come to a consensus.
Although the official dispute procedure is free and impartial, helping to prevent the expense and inconvenience of escalation to court, the process can be demanding of landlords. Insufficient evidence of financial damages caused by the tenant could lead to the deduction being reduced or denied altogether.
To ensure that tenancy deposits can be used for their intended purpose — to reimburse you should a tenant cause you unfair monetary loss — there are a number of steps you should take. Read on to ensure you stand in good stead in the event of a dispute.
Lay down the law
In order to determine whether a proposed deposit deduction is fair, adjudicators must decide whether the tenant complied with the terms of their contract. It is therefore crucial that the letting agreement you put forward is both valid and unambiguous.
Tenants cannot be expected to pay in reparation for breaking rules they did not know about. Fail to stipulate that there should be no smoking in the property, and you’ll have difficulty claiming expenses for clearing the smell of smoke.
You must also avoid unfair terms. Unreasonable conditions can be legally overturned, regardless of whether the tenant signed on them. For example, as someone letting a property, you are not within your rights to request recompense for standard wear and tear.
Gather evidence
The onus is on the landlord to prove that a tenant has caused them unfair financial damages. It is therefore crucial that you gather evidence of both the problem and any associated expenses.
You should have renters provide photographs taken at the start of the tenancy, as well as an inventory detailing the condition of fixtures and fittings. You are then able to make fair before-and-after comparisons, and thus valid conclusions about the problems caused by the tenant.
In the event that you are unhappy with the way a property has been left, make sure to gather photographic evidence, and write down as many details as possible. Contact the tenant as soon as possible to outline your issues, preferably by email, so that you can save all communications and present them as evidence if necessary.
Once you are confident that you have accumulated sufficient evidence of the damages caused, you can get around to rectifying the issue. Use a reputable organisation that will provide you with fair prices and invoices. Remember, if you request extra services or choose an unnecessarily expensive firm, the adjudicator may not reward you the full amount paid.
