How to Avoid Deposit Disputes

Most tenancies end amicably. Landlords and tenants agree for a suitable amount to be deducted from the deposit and the tenancy agreement is terminated.

These deductions most often centre on outstanding cleaning and repair requirements, the everyday issues that still need to be paid for.

But for a small proportion, estimated to be as low as 2%, the end of a tenancy means the start of a dispute.

Here we explore how to reduce this possibility and resolve the impasse as quickly and painlessly as possible.

What are the typical reasons for deposit deductions?

Any deductions made at the end of a tenancy need to be clearly presented and explained. They should relate directly to both the tenancy agreement and the check-in inventory to ensure clarity for the tenant.

Some of the common reasons for deposit deductions include:

• unpaid rent

• unpaid bills

• missing items that belong to the landlord

• damage to the property and/or its contents, e.g., cigarette burns to carpets, holes in the walls

• indirect damage caused by negligence or a lack of maintenance, e.g. a window being left open and excess rainwater getting in

• insufficient cleaning to the agreed standard

• inadequate maintenance of the garden

• unwanted belongings left after the keys are returned

• disagreement over fair ‘wear and tear’

Of these, unpaid rent and bills, and stolen or missing property will be automatically deducted from the deposit.

With maintenance and repair issues, it’s important to keep in mind the element of shared responsibility. Regardless of what’s laid out in the tenancy agreement, the landlord has a legal duty, as laid out in the Landlord and Tenant Act 1985, to ensure the property is safe and to repair any unintentional damage. On the tenant’s side, they must report anything requiring a repair and keep on top of minor maintenance jobs. You can read more about tenant and landlord responsibilities here.

Another flashpoint centres on fair wear and tear. This is defined as “reasonable use of the premises by the tenant and the ordinary operation of natural forces” which is unhelpfully a little vague.

The factors influencing wear and tear include the projected lifespan of the item, the material it’s made from, its age and condition at the start of the tenancy and the expected brand quality. 

These can cause disagreements as some of the answers are open to personal interpretation. For those that can’t be resolved between landlord and tenant, the final judgement related to wear and tear falls to an independent adjudicator from one of the three government-approved deposit protection schemes.

How to avoid deposit deductions

Many deposit deductions are avoidable and tenants are best advised to do all they can to maximise the amount they get back into their bank account.

As well as paying any outstanding rent and bills in good time, leaving the property in the same condition as when you moved in will show a level of care and respect that your landlord will welcome.

This checklist gives an idea of what to do before moving out:

• replace any missing or broken items, cross-referencing against the check-in inventory

• fix any holes in the walls, scratches to surfaces, loose doors etc

• clean the property thoroughly

• unblock any misbehaving drains

• mow the lawn and tidy the garden, if stipulated in your agreement

• remove all rubbish

• pack up everything that doesn’t belong to the landlord, including all furniture, even if you no longer want or need it

• spray some air freshener on the way out

How to avoid a deposit dispute

Beyond the basics listed above to limit the possibility of deductions, tenants should also strive to limit the possibility of a dispute. Landlords also have their part to play. This is a two-way process based on shared responsibility and communication.

Follow these tips to avoid a minor disagreement escalating to a full-blown dispute:

1. Keep the lines of communication open

Underlying all this advice is the crucial need for transparent communication right from the start of any agreement. It’s in both parties’ interests for the property to be in the best condition possible. And this relies on an understanding of expectations and frequent dialogue about any issues.

The sooner an issue is raised, the sooner it can be resolved and the less likely it will evolve into a deposit dispute.

2. Be clear on responsibilities

One of the elements of a successful tenant/landlord relationship is to know who’s responsible for what. When this is detailed within a tenancy agreement, any disagreement about who should have repaired a broken fence or replaced a smoke alarm battery can be easily resolved with a simple check back to the signed document.

For anything that crops up after the agreement is signed, ensure the decision is recorded on email in case it’s required at a later stage as evidence.

3. Draw up a thorough and accurate inventory

When a tenant insists there wasn’t a food mixer in the kitchen in an attempt to disguise the fact they accidentally broke it, step forward the check-in inventory. When this is completed comprehensively, accompanied by dated photos and cross-referenced by both parties on check-in day, there’ll be no arguing on check-out day that it wasn’t actually in the cupboard under the microwave when they moved in.

The inventory comes into its own with disputes centred on wear and tear. Clear, dated photography can illustrate the condition of appliances or décor and be used as evidence at the end of the tenancy if required. Tenants should also ask for anything they feel is missing from the inventory to be added.

To reduce the chance of any cleaning disputes, including the level of cleanliness on day one in the inventory can help. For example, if the landlord had the property professionally deep-cleaned, the invoice for this service can be added as proof.

At the end of the tenancy, a check-out inventory should be completed to act as a direct comparison with the one completed at check-in. Used in conjunction, these are one of the strongest weapons to ward off disputes. 

If any deposit deductions arise, landlords must notify tenants as soon as possible including a full schedule of costs.

4. Arrange and allow regular inspections

Landlords should make regular inspections of their property to ensure the tenant isn’t breaching any part of the agreement. This allows the condition of the property to be formally recorded at agreed intervals, making it easier to keep track of any potential future issues. Landlords must give at least 24 hours’ notice of these visits and get their tenant’s agreement to enter the property.

When tenants and landlords have clarity over responsibilities and expectations, supported by a detailed inventory, the chances of a deposit dispute are greatly reduced.

For more professional advice about managing deposits, ask the experts at MakeUrMove.