After the tenant has successfully paid the full amount of the deposit, the landlord needs to protect it in a deposit protection scheme. The landlord has 30 days to do this and provide prescribed information regarding the protection and payment of the deposit. Since April the 4th, 2007, when the law was first introduced the percentage abuse has dramatically dropped. Nowadays, most landlords conform to the rule. The strict sanctions over the procedures have been effective intro enforcing the law. Suffering an irrefutable penalty of up to three times the original deposit can be a strong motivator.
Deposit deductions are historically proven to cause tension between landlords and tenants. Some 20% of tenants who have lost a part or the entirety of their deposit feel the deduction has been unfair. Around 30% of all tenancies end with deposit deductions, out of which 13% lose all their deposit.
The law states that the tenancy deposit is a property of the tenant. During the tenancy period, neither the tenant or landlord have access to the deposit. An exception is when it’s protected with an insurance-based scheme. Yet, it is still guaranteed by the scheme.
When the tenancy ends, the tenant needs to request their deposit back from the landlord. The landlord must reply and state if they want to deduct something from the bond. They should attach a list of deductions with the reasoning for each one.
There are three ways that a deduction can be legitimised:
- When the tenant agrees
- When there has been a dispute resolution
- When there is a court order
Unless one of the above is true, the landlord can not deduct money from the tenancy deposit.
What are the common reasons for deposit deductions
There are many reasons for claiming back part or all of the deposit. The most definite document is the tenancy agreement. It can also include special clauses, introduced by your landlord, about the responsibilities of the tenant.
Common reasons for claiming part or all the deposit:
- Unpaid rent at the end of the tenancy
- Unpaid bills at the end of the tenancy
- Stolen or missing belongings that are property of the landlord
- Direct damage to the property and it’s contents (owned by the landlord)
- Indirect damage due to negligence and lack of maintenance
- Lack of sufficient hygiene at the end of tenancy
- Lack of maintenance of key facilities – e.g. the garden, depending on the contract
- Unwanted belongings left after keys are returned (and pick up not arranged)
Items which will likely be discounted form the deposit immediately:
- Unpaid bills
- Unpaid rent
- Stolen/missing property
Examples of direct damage that will be subjects for tenancy deposit deductions:
- Cigarette burns to carpet and upholstery
- Holes in the wall from hanging pictures and decorations
- Broken table as a result of standing on it (most commonly to reach something)
Indirect damage would be any damage to the property that is a result of a lack of basic maintenance and care. E.g. if a tenaant leaves the window and go away for the weekend and heavy rains flood the flat and cause water damage.
Most rented houses and flats get a professional cleaning when changing tenants. That’s why it’s expected to leave the property in decent hygiene at least as good as the state it was when you moved in.
If the house has a garden the lease might require a tenant to do maintenance. Not maintaining the garden would result in a deduction to cover the cost of a gardening service.
If luggage is left in the property, and not arranged it with the landlord, it might have to be stored or discarded. The cost would be covered by the deposit.
It’s a good idea to discuss these issues with your tenant before signing of a lease. This way both of you are on the same page about the responsibilities of each one.
What reasons a landlord can not deduct for
Of course, the tenant cannot be held accountable for all maintenance and repair. Regardless of the tenancy agreement the landlord has several key responsibilities. They are described and enforced by the Landlord and Tenant Act of 2004. The landlord has to maintain and keep in good working condition the structural elements of the property and all utility systems.
Anything contract that contradicts this is invalid.
Repair of appliances that make use of utility systems and provide key functionality of the property:
- Baths and sanitary conveniences
- Central heating
- Other essential electrical appliances
Maintenance and repair of the structure and exterior of the building:
- Drains and external pipes
Unless a tenant has caused them to malfunction, the landlord has to repair or replace appliances part of the property. Also, they have to keep in good working order the plumbing and electrical wiring of the property. This is important. They can become a health hazard and even cause you to temporarily flee the house.
It’s the landlord’s duty to maintain them. It’s the tenant’s responsibility to monitor them and report any issues. The sooner – the better for everybody. A tenant has to allow access for the landlord or designated repairmen to assess and repair the damage.
The landlord is granted “reasonable period” in which they must carry out repairs. Take into account those rarely happen immediately, even when best intended.
What is fair “wear and tear”
The House of Lords defines the phrase ‘wear and tear’ as: “Reasonable use of the premises by the tenant and the ordinary operation of natural forces.”
Wear and tear is the natural deterioration of an item through its usual exploitation. This is especially important for tenancies that have ran for a longer period of time, e.g. five years. Throughout the years, everything from electrical appliances to flooring would wither away. It would be unfair for a tenant to pay with their deposit in full. However, more often than not, these cases are subjected to deposit disputes.
The final judgement of wear and tear always falls into the hands of a designated adjudicator.
Common factors that will influence ware and tear:
- Type of item and its projected life span
- Type of damage and the item’s material
- Age of item and tenancy length
- Brand and manufacturer specifications
- Documented state in the move in inventory
The adjudicator will carefully examine all of these factors and relevant documents. Afterwards, they will split the cost of repair / replacement of the item fairly. The portion that is attributed to wear and tear would not be paid by the tenant. Yet, they might still have to make a contribution.
The tenancy inventory is crucial for resolving deposit disputes. It thoroughly documents the state of the property before the tenant comes into occupation. When the tenancy ends, the same inventory check is issued once more. When the two reports are compared, it’s easy to see how the condition of the property has changed. It is the most vital evidence to assign which damages are caused by the tenant.
Always make sure both landlord and tenant attend the inventory report. Otherwise, it is difficult to correct any issues that might lead to an unfair deposit deduction.
What to include in the check-in report at the beginning of your tenancy:
- Contents of each room
- Condition and quality of the furniture
- Condition and usability of all electrical appliances
- Power sockets, light switches and light bulbs
- The quality of the surfaces (floors, tiles, wooden furniture, glass)
- Scuff marks, bends, dents and other surface damage
- Visible damage on the furniture and walls
- Rips, tears and holes in the upholstery
- Condition of all carpets
- Mould and mildew on the walls, around windows, in corners
- Hygiene of the entire property
Important documentation to secure a deposit
As you should already realise, documents related to the tenancy are vital. Only they can prove a case in a potential dispute. It’s a general tip to keep paperwork in an organised folder at home for when it comes to use.
Important documents you need to keep and protect until the end of the tenancy:
- Copy of the tenancy agreement
- Proof of payment of the deposit
- Dated prescribed information
- Copy of the inventory report at move in and move out
- Date and signed photos accompanying the inventory
- Receipts of rent payments
- Receipts of payments of the utility bills
- Written notices and emails with the landlord
All these can prove your innocence if worst comes to worst. Try to organise them as they come in.
Although not always possible, it’s best to avoid deposit deductions altogether. More often than not, the power to do so resides entirely in the tenant’s handling of the property.
Try to fix everything up to the standard in the move-in inventory, before you leave.
For bigger repairs and jobs, you need to coordinate it with the landlord. You will likely have no right to do heavy maintenance and repairs, as per your contract. Disregarding this rule can lead to further deductions and disputes.
However, smaller fixes are very welcome and will improve your chance to receive back your deposit.
Checklist of minor repairs before leaving the property:
- Pay any outstanding rent
- Pay all outstanding utility bills
- Replace all broken light bulbs, light switches, power sockets, water tap handles
- Fix all holes in the walls, scratches to surfaces, hanging or loose cabinet doors, squeaky door hinges
- Do a garden maintenance session, if required by your lease
- Clear and unblock any problematic drains in the house
- Perform a top to bottom end of tenancy cleaning (thorough deep cleaning) of the property
- Clear out all rubbish
- Remove all furniture, appliances and luggage not part of the property (unless otherwise arranged with the landlord)
- Deodorise any bad odors from house pets
When the lease expires, the tenant needs to request their deposit back from the landlord. The landlord has 10 days to reply and open a discussion about possible deductions.
In the same time, they need to release the non-disputed part of your deposit and return it to you. The rest will remain in the TDP scheme until a resolution has come to light. For insurance-based schemes, the landlord has to repay you the balance. Then, pay the disputed amount to the scheme, where it will remain until the matter is resolved.
The landlord has to send you a list with all deductions and reasoning for each one (if they don’t, request one).
Depending on the length of the tenancy, you might expect to be asked for a fair contribution to refresh the property. E.g. split the bill for a new coat of paint, fixi holes left from your pictures and decorations, replace light switches and similar small refreshments.
Be fair when you discuss the deposit deductions and approve those that make sense. If you feel the deductions are unfair or over the top, try to calmly disprove those. Back them with documents and photos. A lot of times, the problem can be resolved with a well-mannered discussion. If you present overwhelming evidence, the landlord can even drop their case. It’s the landlord who has to prove you owe them anything, rather than you having to prove your innocence.
Make sure that your discussion over the deposit return happens in writing. You can use it as evidence should the matter worsen. Email would be your number one choice.
In the best case scenario both parties have come to agreement. Then you can notify the deposit protection scheme and release the funds according to your agreement.
If you can’t come to a common ground over the deposit, ask your deposit protection scheme for advice. They are experts in landlord and tenant law. Often they can highlight useful laws and cases that can provide additional insight.
If you still can’t come to an agreement, use the free “alternative dispute resolution”. It is provided by your tenancy deposit scheme and serves as an alternative to the county court. The scheme will appoint an impartial adjudicator. He or she will review your case and come out with a final decision. Once the decision has been made, you cannot dispute further. Make sure you’ve prepared your case before this has began.
The adjudicator will request all relevant documents and other evidence from each party. Here is where you take out your nicely organised folder and provide your proof. You can also print out your emails with the landlord and add them to the bundle. If your photos or inventory are been signed by a witness different from the landlord or letting agent, have them write a statement. Submit that with the rest of your materials.
Note that ADR is possible only if your deposit is protected in a government authorised scheme. Otherwise, the county court would be your only option.
You should contact the deposit scheme who hold the tenancy deposit. They will provide you with the correct forms in relation to applying for a deduction in the amount of deposit returned to your tenant. These can also be handled by a dispute resolutiion service who will require various elements such as an inventory – see How To Create An Inventory