Tenancy Deposit Disputes

How common are tenancy deposit disputes?

Thankfully, tenant deposit disputes are relatively rare. Despite media claims that landlords frequently withhold tenant’s deposits without justification, research from the Deposit Protection Scheme (DPS) reveal disputes only happen in around 1% of deposits held. The DPS claim their adjudication process (the final stage if agreement cannot be reached between landlord and tenant) is the lowest of the 3 approved schemes at 0.81%, this compares to the two other scheme providers at 1.02% and 0.87%.

What should a landlord do if they dispute the repayment of a tenants deposit?

A landlord should first try and resolve any disagreement with their tenant amicably. Break down the items and amounts, showing why and what any withhold money is for, whether that be for damage to the rental property or owed rent.

If all else fails then the starting point with all tenancy deposit disputes is the property inventory and the tenancy agreement. This is why preparing a good inventory with a precise schedule of condition is so important. The quality of this documentation will enable a landlord to sunbstantiate any damage or missing items in the rental property, and to how they go beyond what should be considered the reasonable wear and tear of the rental property . The tenancy agreement can be referred to in the case of any rent being owed or sufficient notice to leave being given.

Have a look at Property Hawk’s guidance on repaying a tenants deposit as to the procedures involved and at what stage the arbitration process starts. This is a useful piece of guidance on what a trained arbitrator looks for when assessing what a landlord can withhold from a tenant deposit. We have over 50 tips on how landlords can win a tenancy deposit dispute if the process goes to arbitration.

This will help landlords avoid getting into a protracted arbitration process.

Figures from the DPS, show that following disputes, 18.5% of tenant deposits are returned in full to the landlord or letting agent, 54.7% are split between both landlord and tenant, and 26.8% are refunded in full to the tenants.

Do landlords need to take a tenancy deposit?

Some landlords avoid taking a tenant deposit. The practice is perfectly legal and acceptable. This approach is particularly popular with student landlords and landlords with benefit tenants who often struggle to raise a rental deposit.

Instead of using a rental deposit for assurance, these landlords obtain a tenant guarantor , usually charging a non-refundable administrative fee for doing this. If the tenant goes on to cause damage or stops paying the rent, the landlord simply charges the tenant’s guarantor for the costs. If they refuse to pay the landlord will then take the guarantor through the small claims court for costs.

One Comment

A company let has just vacated my property third week in August. The permitted occupiers vacated, breaching the contract signed by the company and no professional cleaning, repairs to broken pane of glass to double glazed sash window, alarm service or specialised cleaning for having a pet for three years has taken place as per contract and addendum to contract. I manage the property but the contract was drawn up by one of the most reputable estate agents in the country. I have gathered quotes together and have had some items fixed. The deep cleaning of the wooden floors and re-oiling comes to £6,000, which I agree is a huge amount – it is with machines from a professional company. Admittedly had the tenants organised this before departure a ‘one man band’ may have taken several weeks to do the job for cheaper. I live far away and could not keep attending the vacant property to wait for a number of different services to give quotes and schedule them for the work. I have chosen the first cleaning companies, ie wood flooring, window cleaning, professional cleaning, that were willing to come to the property. I have listed the quotes plus other bills for damages and the ‘permitted occupier’ seems to be in charge of replying to me, though the rent was paid by the company. The permitted occupier does not agree with the specialist cleaning bill for the wooden floor nor the professional cleaning quote. Are they allowed to disagree at this stage? Because I have had to sort out their contractual obligations, this has not allowed us to rent out our home in time for the academic school year. The estate agent has been reluctant to show our home in the state that it is in. My questions are: Should I be writing to someone else in the ‘company’? If they are clearly in breach of the contract, do they have much ‘say’ in the quotes as they had plenty of time to organise and do the jobs themselves? Is there a maximum amount that is chargeable for fumigating odours and pet hair from wooden oiled floors? I am a reasonable person, but have never had a tenant who has not left a property in the state that it was given to them. I did have the wooden floors cleaning and oiled for their occupancy together with the professional clean. I don’t want this to drag on further, especially a I have to pay for the floor cleaning at the end of this week when the process of deep cleaning and re-oiling is completed. Any suggestions much appreciated. Thank you.