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MAF
03-03-2010, 11:14 AM
This may sound a bit of a strange question but are grounds for witholding tenants deposit actually set out in law?

Can some or all be witheld for the tenant not complying with the terms of the tenancy agreement?

Or can only actual costs, that receipts can be provided for, be charged?

Any help much appreciated.

westminster
03-03-2010, 13:42 PM
Can some or all be witheld for the tenant not complying with the terms of the tenancy agreement?

Or can only actual costs, that receipts can be provided for, be charged?

There's no actual list of grounds, AFAIK. I think it comes under the general heading of damages.

You can only claim for actual loss you suffer as a result of the breach, and T is never liable for fair wear and tear, and LL is never entitled to 'betterment'. You don't necessarily have to have the repair/cleaning carried out, but you'd usually have to show some evidence of your loss, including evidence of condition at check-in/out, and receipts or quotes. You also have a duty to mitigate your loss; e.g. get the repair done at a reasonable cost.

Example A1: if T ruins a fitted carpet - and it's not possible to clean or repair it - then he is liable for a portion of the cost of replacement, depending on the age and anticipated life-span of the carpet. Let's say it's a cheap carpet, expected to last 4 years at most, and the carpet is 2 years old at the end of the tenancy during which the damage occurred. It would be fair to charge 50% of the cost of replacement - this is called apportionment. You'd need to show quotes for the replacement, or a receipt.

You could not charge 50% of the cost of replacement with a higher quality carpet - that would be betterment.

Example A2: T causes a small stain on the carpet. If it can be removed by professional cleaning, then you can charge for the cleaning, not for replacing the whole carpet.

Example B: T breaks the glass cover of a ceiling light fitting. This is something which would not deteriorate over time, so your loss is the full cost of replacing the glass cover or - if that's not possible - the whole light fitting.

Example C: Contract says T must not keep pets. You discover he has a rabbit living in a hutch in the garden, in breach of this term. But you have suffered no loss as a consequence, so you cannot simply 'charge' the T for the breach.

Example D: T causes a small chip in the granite kitchen worktop. It is small and certainly not worth the expense of replacing the worktop. You can charge a small sum as 'compensation' for the minor damage. You can't charge for the full cost of replacing the worktop.

Rent arrears are a separate thing - a debt. If the contract says you can deduct arrears from the deposit, you can; if not, not (and you'd have to pursue T for the arrears independent of the deposit).

MAF
03-03-2010, 14:08 PM
Thanks for your reply westminster, very helpful.

MAF
04-03-2010, 09:20 AM
Further to westminsters reply we have been advised that it is an issue of contract law rather than statute law and the deposit protection schemes require that the tenancy agreement set out what the deposit monies can be held for.

Our tenancy agreements clearly state that the tenants must provide receipted, finalised utility accounts before deposits can be returned, this has not been done and we are aware of an unpaid account totalling more than £700.00 and have therefore not returned the deposit as yet.

However we are now being htreaten with court action if monies are not returned immediately!

Any further thoughts or opinions gratefully received.

jta
04-03-2010, 11:44 AM
If the utilities bill was in the tenant's name then it has nothing to do with you, it's the tenants bill and it's up to the utility company to chase it, not you.

westminster
04-03-2010, 12:02 PM
Assuming this is let as a self-contained dwelling and the tenancy agreement makes T liable for all utility bills, then you are not liable for those charges.

Although it is a contractual term, OFT guidance on unfair terms in tenancy agreements says that this type of term may be considered unfair (though this is just guidance, not statute), also, as you are not liable for the bills you can't argue you've suffered any loss.

I would contact the utilities providers and ensure that the bills are indeed in the tenant's name, advise them of tenant's forwarding address if known, send copy of the tenancy agreement if required.

Once you have clearly established that the utilities providers are aware of who is liable, give the deposit back.

If you don't, and this dispute went to either adjudication or court, it is very likely you would be ordered to return the deposit (assuming there are no other, valid, deductions).

fletchj
04-03-2010, 12:31 PM
Our tenancy agreements clearly state that the tenants must provide receipted, finalised utility accounts before deposits can be returned, this has not been done and we are aware of an unpaid account totalling more than £700.00 and have therefore not returned the deposit as yet.

However we are now being htreaten with court action if monies are not returned immediately!


I think on this one the tenant is right and you are wrong - you have no liability for the unpaid utility bill so no grounds to withhold the deposit. You simply inform the utility co. that you took over the flat on date x with meter reading y - chasing the tenant for the bill is their problem and you have no liability.

The only circumstance I can think of where this wouldn't be true is if you didn't put the bills in the tenants name, in which case you have a liability and therefore grounds to withhold the deposit.