Posted on by Bamberger.louis

Deposit Deductions: How to avoid a dispute EVERY* time

* I’m exaggerating! That is highly unlikely as Deposit deductions are always a contentious topic.

However, in this blog post I’ll share a real life example of my own regarding deposit deductions which concluded last week, where I’ve put into practice some of my learnings from previous mistakes. My key learnings:

  • Compromise is key!
  • Be fair (but firm where needed)
  • Don’t quibble over small amounts. Time vs money.

“A study by the leading tenant’s website, The Tenants Voice, revealed that while 70% of deposits are returned in full, 17% are returned in part and 13% not returned at all. The survey of more than 2,000 private tenants also found that 35% of respondents had previously lost some or all of their tenancy deposit.”

Before we start, lets just state some of the obvious points regarding best practice on deposits:

  • Maximum deposit capped at 5 weeks of rent
  • This must be registered in a Government approved Deposit Registration scheme
  • Certificate must be provided to tenants

The above points are legal requirements. Make sure you comply. The next one is highly recommended – in fact you’d be foolish not to do this:

  • Have a detailed Inventory report completed by an Independent Professional Inventory clerk at both the checkin and checkout. This should be signed by both the Tenant and Landlord.

Anyway, let me summarise my experience ever the last few weeks. Every email is real, including numbers. Obviously no names or confidential data is included. Please read and share your thoughts.

Background

Tenant had been in flat for 9 months out of a 12 month contract, using the break clause to leave earlier than the full term. Monthly rent: £900. Deposit registered in TDS: £1,038. Inventory report completed by Independent Inventory clerk at checkin. The same clerk completed the checkout report.

Checkout Report Summary

TO BE NOTED

The check out was carried out using the check in report dated 21st August 2019.

The property is grubby & dirty, requires cleaning throughout. The flat was only domestically cleaned at the check in.

The following differences were noted at the check out (Ive only included key points):

ENTRANCE HALL

  • The walls have further shaded usage.
  • The carpet has further grey grubby shading to the walkway and additional grubby grey spots.
  • The built in cupboard is very dusty to the interior. A few small items of rubbish has been left.

BATHROOM

  • The walls have numerous brown grubby splashes throughout.
  • The walls tiles have some scaling and some black spots to the grout.
  • The WC & Basin is scaled and dirty.
  • The bath panel has heavier water damage and cracking.
  • The bath has heavier rust marks to the edge. Scaled & dirty. Heavier black stains to the sealant edge.
  • The shower hose & head & screen have further scaling.

BEDROOM

  • The carpet has further grey shading, assorted grey spots & marks, a few small heavy black spots to the end of the bed.

RECEPTION ROOM

  • The walls have a one foot brown grubby stain by the dining table.
  • The carpet has further grey grubby shading, assorted grubby spots & marks.
  • The sofa has heavy grey spillage stains to two seat cushions, a three inch hole to one seat, further grey shading and additional grubby spots.

KITCHEN

  • The woodwork has a rust mark and is dusty.
  • The vinyl flooring has a two foot yellow stain by the dishwasher and grubby marks.
  • The sink has some scaling & is grubby.
  • The work surface is grubby. Light white saucepan heat ring mark over the washing machine.

What do I do??!

Quite a few items requiring attention! After getting a quote from a cleaning firm, I went back to the Agent who manages the property with the below proposed Deposit deductions.

  • Sofa damage £100
  • Cleaning £155 (I will offer to pay half of the £310 quote)
  • Paint touch ups £150
  • Item removal £25

Total: £430

“The old me would have gone into much more detail, costing up individual line items and reaching a significantly higher deposit deduction.”

What happened next?

Copying in the next 3 emails discussing the deductions:

  1. Tenant reply via Agent:

“Your tenant has asked if you are prepared to waive the claim for the sofa damage and paint touch up.  This is due to them believing the paint and sofa were in a similar condition at the start of the tenancy. They have agreed to £155 for cleaning and £25 for item removal. Please let me know if you are prepared to accept the £180 offered?”

My reply back:

“My deductions were based on the independent inventory report which identified areas which were in a different condition at the end of the tenancy. So not something I can or should just write off I’m afraid. However, to try and avoid this dragging on too long, I’m willing to charge just 50% of what I believe the cost will be for the sofa/painting. So total deductions would be:

  • Sofa £50 (50% of £100)
  • Painting £75 (50% of £150)
  • Cleaning £155
  • Items removal £25
  • Total: £305

The response:

“The tenant have agreed to the claim of £305 so this sum will be released to you shortly.”

The Result / Learnings

Firstly, its worth noting that this discussion lasted just 3 days. That’s pretty quick. Deposit disputes can drag on for weeks, if not months if they go to arbitration. A quick agreement saves me and the Tenant significant time and stress.

Was it fair for both of us? We’ve both agreed it pretty quickly, so a good indicator we are both happy.

Will the deposit deduction cover all my expected costs to bring this property back to its state at the start of tenancy? No. I will need to cough up some of my own funds to do this.

But here’s my key learning over the years:

  • Compromise is key! Save everyone time and energy by trying to see their view point. Move towards that point as much as you can.

  • Be fair (but firm where needed). As a Landlord, you run a Business, not a Charity. So sometimes deductions will need to be made to recoup costs you will incur. Charge for those costs without guilt. But be fair. Don’t charge more than you need to, and be grateful that to the Tenant for being a paying customer over the months/yearly – so give them some goodwill!

  • Don’t quibble over small amounts. Time vs money. Seriously, small amounts are not worth fighting over. Drop them, take the hit and move on. Stay sane.

Did we reach a fair conclusion? Please share your thoughts on the outcome. Id also love to hear about others’ experiences. The more we share on how disputes work in real life, the less grey this area becomes 🙂