What to know about Deposit Dispute claims by Mark Davison

As with any end of tenancy, in order to avoid disputes, the hard work is done at the start of the tenancy documenting the condition.

Here we list how to ensure you are managing your tenancy correctly in order to avoid any disputes.

Inventory

You should conduct a thorough Inventory and condition report at the start of the tenancy.

• Note on the inventory if the property has been professionally cleaned or decorated at the start of the tenancy.
• Use dated photographs to support your inventory description to fully show the condition.
• Remember to do the exterior as well as hedges and lawns can be expensive to make good if neglected during the tenancy.
• Hopefully it won’t be needed, but if any dispute is raised at tenancy end you will have all the evidence of the condition from the start. 

Betterment

One of the main issues to consider when looking at damage or wear and tear at the end of the tenancy is ‘Betterment’. This is a term widely used in dispute adjudications and basically means a landlord cannot gain or benefit financially or otherwise from a dispute – so, can’t get new for old.

For example, if your tenant damaged a carpet beyond repair or cleaning, and it was already 10 years old and had the typical wear and tear you would expect from a 10 year old carpet, then you would not be able to charge the tenant 100% of the cost of a new carpet. In this situation, we would ask the landlord how old the carpet is. In this case depending on quality, we would expect a carpet to last 10 – 12 years typically, so we would suggest asking the tenant to pay approximately 20% of the cost of a new carpet.

‘Wear and Tear’ is often used by tenants as a defence, when in some cases the landlord and agent may class this as damage, as it would need to be replaced or repaired. A number of factors need to be taken into account when considering damage/deterioration to property/furniture/furnishings, and whether any such damage is caused by “Fair wear and tear”.

In particular, the following should be considered:

1. The condition according to the inventory report at check-in and check-out.
2. The quality (therefore durability) of the item in question.
3. The length of time the property has been occupied.
4. How many occupants are expected to live in the property.
5. Any extenuating circumstances.

The tenant cannot be held responsible at check-out for changes in the property’s condition caused by what the Courts have called ‘reasonable use of the premises’.

Things naturally deteriorate during the normal operation of living in the premises. Cleaning is not included under ‘wear and tear’, as long as the property was clean at the start.

A landlord or agent never really gains from any dispute adjudication and even if you win 100 % of the claim you will have input a lot of time into completing the claim with the respective Dispute Service. This would apply for any of the Government backed dispute schemes, but would also apply to claims and evidence for the new style insurance backed deposits that can offer a higher deposit - for example ‘Reposit’ which we offer to our clients. The benefit of an insurance backed scheme like Reposit is that the actual amount would be eight weeks of the rent compared with five weeks of the rent for a Tenant Deposit.

If a dispute can be avoided by coming to an agreement with the tenant after they have moved out, we would always suggest this as the best action. However, should you not be able to come to an agreement with your tenant the dispute adjudication is there for you to prove your case and claim damages against the deposit.