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Deducting from a Deposit

Thursday, 19th July 2012

Categories: Lettings

Author: Peter Barry

It’s always difficult to work out a reasonable amount to deduct from tenants when it comes time to hand back the keys and hand over the deposit.

With the introduction of the Tenancy Deposit Scheme in 2007, it became harder for unscrupulous landlords to retain part or all of a tenant’s deposit for repairs to the property, which is good news for tenants. In the past, landlords who regarded a deposit as a bonus fund for property upkeep could leave unwitting tenants seriously out of pocket. In effect, tenants were stung for nothing more than expected wear and tear and it could be very difficult to reclaim the money.

Damage limitation

Thankfully, things have changed but the deal should work both ways and landlords should be fairly compensated for genuine damage to the property. There is a tipping point at which regular scuffs become dents, and general maintenance turns into the wholesale replacement of fixtures and fittings, all of which can be very costly for the landlord.

The benefits of an inventory

Here at Peter Barry, we would always recommend having an inventory prepared. It is an essential document should a landlord request to have monies deducted from a tenant’s deposit for damages.  Although it can be costly and will take some time to complete, it’s worth its weight in gold as it can cut down on arguments and negotiations at the end of the tenancy. If the tenants have signed a form to say the flat comes complete with a new sofa and a full six-serving crockery and cutlery set, then there’s no room for disagreements if the sofa is destroyed and only two plates and a spoon remain on moving out day.

Calculating the rebate

As a landlord, you are entitled to take money from the deposit for reasonable repairs or replacements. For example, if there has been damage to the property, or items are broken or missing. You could also legitimately claim for any rental arrears, or if the property has been left in such a bad state that you need to pay for professional cleaners. It’s always wise to keep receipts for any items that you have to replace, or any work that needs to be carried out, as your tenants are entitled to ask for proof of the costs.

At the end of the day, it’s wise to always keep in the back of your mind the fact that the deposit doesn’t belong to you; it’s your tenant’s money and can only be dipped into if the work is justified.

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