It is commonplace for a landlord to charge their tenant a deposit to cover any potential breaches of their tenancy agreement. Much of the disputes over deposits centre around a landlord unnecessarily or unfairly withholding a deposit at the end of a tenancy, and the tenant’s plight in trying to get the money back.
Thankfully, since 2007 tenancy deposits must be protected in an authorised tenancy deposit protection scheme. As a result of this change in the law, there is now greater understanding that a tenant’s deposit belongs to them throughout the tenancy, and whilst disputes do still occur frequently, there are more established methods to resolve them.
One area that remains a problem for landlords is the thankfully uncommon but always difficult situation where the state a property is left in cannot be resolved with the amount of money held on deposit.
How it should work
The standard procedure at the end of any tenancy, or indeed when damage is discovered, is to assess the state of the property including any damage beyond reasonable wear and tear, and to work out an appropriate value to restore the property to its previous condition.
The two parties should work together to calculate the value of damaged items, by considering its current value, or its value from new with a deduction for its age, and should aim to arrive at a figure that represents a fair replacement value. Landlords should remember this calculation is not a case of replacing old with new, and if work is required, several quotes should be sourced and the best value selected.
Once the figure is agreed, the tenant should be invoiced, and asked to pay themselves. The deposit still technically belongs to them, so the recovery of damages should be made directly to them. The tenant can then choose whether to use their deposit money to pay.
Avoiding common problems
Of course how it should work is rarely how it does work. Tenants and landlords are often at loggerheads over valuations, and may even dispute what has been damaged. In these circumstances it is important to think clearly and methodically.
Gather evidence of all damage, recover your ‘check-in’ inventory, document damage with photos or video, get quotes and recover receipts for items damaged when bought. The more evidence you have the better.
Find a Property Law solicitor to discuss your case. You will already be aware that any deposit is unlikely to cover the cost of repairs and replacement, and fixed legal fees can be added to any claim you make so you should not be out of pocket.
It is important to remember that a court will not fund replacement of items unless they are beyond economical repair. As a result consider all options for restoring your property, including cleaning and repair of damaged items. If you present a comprehensive case, with evidence, you should be able to recover damages from your tenant, irrespective of the value of the deposit you hold.