Debating the deposit!
When a tenancy comes to an end one of the biggest points of contention is always the deposit. Both parties have different opinions on what is acceptable, both in terms of condition of property and how much deductions should be made from the deposit.
When we are asked to remove a tenant for reasons other than rent arrears, the return of the deposit can be a point of contention.
The main disagreements are cleaning costs and damage to fixtures and fittings, with the tenant unaware of the real costs of these or choosing to be ignorant of the issue.
It is not unreasonable for a landlord to outsource the cleaning of the property to a professional cleaning company which in our experience many tenants fully understand. The disagreement seems to appear on agreeing what is fair wear and tear due to normal usage of a property. I have always suggested taking video and picture records so you can show the tenant how the property looked prior to them moving in. What do you currently do to reduce the disagreements about deposits?
I was speaking to a couple of branch managers at a leading national chain of letting agents and it was interesting that about a third of tenants actually expect the landlord to keep the full deposit. This led to a discussion on what the average deposit retention actually was, it appears that from a quick research most get 60% of their deposit returned.
Of those landlords that have kept some of their tenant’s deposit, more than half said it was simply down to needing to professional clean the property prior to re-letting.
Student tenants seem not to understand the consequence of their particular life style, damage to fixtures and fittings results in almost a quarter (24%) of students not getting their full deposit back, while excessive wear and tear (22%) was also an issue for over a fifth (22%). Just 5% cited unpaid bills as a reason.
Many students appear to have no concept of the cost of repairs and cleaning with two thirds of students feeling they were unfairly treated when it came to deductions from their deposit.
I found some research on the good old internet that claimed that 25% of students did not receive details of the protection scheme their deposit was registered with when they moved in.
I tried to look at some suggested figures for losses due to tenants and deductions from deposits. However figures came back from between £28m and £50m.
We advise our clients to maintain constant honest open and documented communication to try to reduce any misunderstandings.
A signed inventory is a must, in addition take photos and videos of the property and have the tenant confirm in writing that they are a fair representation of the property prior to the tenancy.
Think about the time and effort you will save, compared to disputing the deposit deductions with tenants.
What do you do to try to reduce the differences when the time comes to return a deposit?