Have you ever needed to make a deduction to your tenant’s deposit at the end of the tenancy? The answer to this will undoubtedly be yes. If you haven’t then you’re clearly very laid back or you’re rolling in cash.
But have you ever had a tenant dispute a deposit deduction you’ve proposed and then realised that you don’t have enough evidence to prove your claim? If so you’ve probably learned your mistake the hard way and lost out at adjudication. Unfortunately, this is a common occurrence among landlords and letting agents even though TDP has now been in place for over 6 years.
Why you take a deposit
Very few landlords or letting agents let a property without taking a deposit. It provides a guarantee that you can be compensated for financial loss should your tenant break the terms of the tenancy agreement or, worse, damage the property. Fair’s fair.
If that happens, then you may need to make a deduction to your tenant’s deposit. But how will you fair if they disagree with your deductions and raise a dispute? Remember, dispute resolution is an evidence-based process and the deposit money belongs to the tenant. Unless you can prove why you want to make a deduction it’s their property and should be returned.
But do your tenants know their responsibilities?
Your tenant’s responsibilities should be made clear in the tenancy agreement and any inventory you carry out. Tenant’s who ‘don’t have time’ to read their tenancy agreement or inventory, who don’t pay attention to them, or just ignore the them leave themselves at risk of incurring a deposit deduction.
But if you don’t have an inventory, if it’s in a poor condition, or if your tenancy agreement wasn’t clear, then you might find you haven’t got a leg to stand on if, come the end of the tenancy, you need to make a deduction to the deposit and your tenant disputes it. Let’s take an example. If your inventory doesn’t contain any information about the coffee table that miraculously disappears at the end of the tenancy, then you wont be able to prove it was there if your tenant disputes a deduction you make to the deposit to cover the cost of replacing said coffee table.
What should I do before my tenant moves in?
Well, as mentioned, the tenancy agreement should document your tenant’s responsibilities and you should make sure your have a detailed inventory undertaken. It should detail the state of the property when your tenants move in, and thus give them a clear comparison for how it should be returned when it’s time to leave. It should also define the terms used to report the condition or cleanliness of items in the property.
Getting your inventory in shape
You may already enlist the services of a professional inventory company to compile an inventory for you or may consider doing so. But if you’re a one-man-band or you’d prefer do it yourself, then fear not. mydeposits has produced a comprehensive guide to help.
The ins and outs of inventories aims to help avoid a dispute by providing an idea of key things to take into account when compiling an inventory at the start of the tenancy. It outlines what kind of detail is needed to describe the property’s items and their condition and it features tips from industry experts.
So, remember, before you move new tenants in, get your house in order: check your tenancy agreement and inventory are properly complied and sufficiently detailed to enable to you cover yourself in the vent of a deposit dispute. If it helps, check out the guide here, too.
You never know, it might just save you a tidy little sum.