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Tenants win more in deposit disputes than landlords: Make sure you get yours back with these tips

Tenants locked in deposit feuds have been awarded 50 per cent more money back than their landlords when disputes go to adjudication.

Roughly one in every 30 tenancy deposits are disputed according to the Deposit Protection Service – one of the three Government-backed schemes for England and Wales.

Since the start of 2018, 66,768 tenancy deposits have ended in dispute, with a professional and impartial adjudicator having to step in to decide on the matter.

Hooks, holes and nails in the walls and Blu Tack marks can give the landlord reason to try and withhold some of the deposit when a tenant moves out 

Landlords have received £10,680,453 during these disputes whilst tenants typically come off better, having been awarded £16,058,532 since the start of 2018, according to the DPS.

Since June 2019, landlords in England have been limited to requesting five weeks’ deposit upfront for any new or renewed tenancies, or six weeks if the annual rent is £50,000 or more.

‘Landlords and letting agents are required by law to submit a deposit to an authorised deposit protection scheme,’ says a spokesperson for the DPS.

‘At the end of a tenancy, it is up to the landlord to prove that damage outside of normal wear and tear has taken place.

How much money do tenants get back after a dispute?  
Year Deposits returned Deposits in dispute  Total awarded to landlord after dispute process Total awarded to tenants after disputes process 
2018  667,976  25,971  £2,859,628  £4,896,734 
2019  719,419  22,434  £4,073,075  £6,068,132 
2020 654,220 18,363  £3,747,750  £5,093,669 
Total  2,041,615  66,768 £10,680,453  £16,058,532 

‘The tenant can either accept the landlord’s claim or make their own suggestion over a reduction.’

This is Money spoke to a number of experts across the lettings industry to best understand how tenants can protect themselves.

1) Check your deposit is in a tenancy deposit scheme

If the deposit is held in a tenancy deposit scheme, there will be a free resolution service to deal with any disputes that might arise at the end of the contract.

But if the deposit hasn’t been registered, the landlord may be liable for a hefty fine and potentially be unable to evict tenants from the property. 

‘There are extremely strict rules on protecting deposits,’ says Rik Smith, head of tenancy services at Goodlord.

What records should tenants keep? 

The Deposit Protection Service gives the following advice for tenants. 

1) Ensure your new landlord protects the deposit with an authorised deposit protection scheme and provides a record of this

2) When you move in, agree an inventory with other tenants and the landlord and back this up with date- stamped images 

3) Ensure that the signed inventory document is returned to the landlord, and make sure you keep a copy

4) Every tenancy agreement is different: make sure you read yours and understand your rights and obligations in respect of cleaning, damage and upkeep of gardens

5) Record communication with your landlord in writing and follow up phone calls with an email outlining what was agreed 

6) Keep copies of any documents, receipts and email correspondence relating to your tenancy

7) Report any defects with the property promptly and in writing, including the cause of the problem when you can

8) Attend the checkout inspection at the end of your tenancy, sign and keep a copy of the check-out inspection report, and take your own photographs if necessary

‘The deposit must be placed in a government-backed tenancy deposit protection scheme within 30 days of the start of any assured shorthold tenancy and the tenants must be notified.

‘If a landlord fails to protect their tenants’ deposits, the county court may force them to pay the tenant up to three times the original deposit amount in compensation.’

2) Collect your evidence at the start of the tenancy.

When moving into a new rental property, it’s always a good idea to inspect your new home for any signs of damage or wear and tear caused by previous tenants.

‘This is your time to act the detective and gather the evidence,’ says Tahir Farooqui, chief executive of private rental platform Canopy.

‘Take photographs of any damage, such as marks or cracks in the wall, dents in doors, sticky locks, or wobbly drawers.

‘Then, if your deposit money is cut down for any of that pre-existing damage, it’s easier to make that clearer to your landlord.’

3) Don’t underestimate the importance of check-in and check-out

When deposit deductions are being considered, the inventory taken at check-in and check-out is vital.

If the landlord fails to arrange an inventory in time for the check-in, the tenant will have little chance of success if a dispute went to adjudication.

It is worth documenting everything that is wrong with a property when you move in, so that this can't be used against you when you come to leave

It is worth documenting everything that is wrong with a property when you move in, so that this can’t be used against you when you come to leave

‘When landlords wish to deduct from the deposit, renters should compare the condition of the property at the start of the tenancy to the condition at check-out,’ says Gurdeep Clair, in-house legal counsel at online letting agency, Howsy.

‘For example, if the inventory and check-in state the carpets had some stains, it would be unfair for the landlord to now claim that he is going to charge for the replacement of all the carpets.’

4) Don’t forget, wear and tear must be fair

Fair wear and tear relates to any damage a landlord should normally expect in a rental property over a period of time.

Main causes of disputes between landlords and tenants in 2020
Claim type Claim %
Damages 27%
Cleaning  25% 
Redecoration  11% 
Rent arrears  8% 
Missing items  7% 
Gardening  5% 
Outstanding bills  2% 
Other  15% 

‘When considering what is fair wear and tear you take into consideration such things as life span of the item, the age of the item, the condition of the item during check in, as well as how long the tenants were in the property,’ says Clair.

‘Using the carpet analogy, the general lifespan of a carpet in rental properties is between 7-9 years – any deposit deductions a landlord makes after a similar amount of time should therefore be minimal.

‘If the carpet was brand new and the tenants only stayed for six months and there are stains which cannot be removed, the tenant may be liable for the reduction in its value, but not its replacement. 

‘Renters are not there to furnish a landlords’ home for the next tenants.’

5) Give the property a deep clean before leaving

Cleaning the flat before departure will help to give the landlord less reason to withhold some of the deposit.

Tackling any signs of damp, cleaning big appliances such as ovens, microwaves, dishwashers, fridges and freezers as well as unblocking sinks can often be overlooked, but are all things that need to be clean for the new tenants.

The average price of an end of tenancy clean is £310 according to Checkatrade, and this might be deducted from the deposit if the landlord feels they need to arrange this themselves.

Ensuring you leave a property clean and tidy when you move out is one easy way to reduce the likelihood of losing some of your deposit

Ensuring you leave a property clean and tidy when you move out is one easy way to reduce the likelihood of losing some of your deposit

‘Cleaning big appliances, like your oven, can feel like a daunting task, especially if they’ve had years of use by various tenants,’ says Farooqui.

‘But you don’t want your landlord to have any grounds to hold back deposit money, and leaving behind a filthy oven could be a good enough reason.’

‘Get the gloves on, buy a bottle of oven cleaner, and set aside a couple of hours to tackle the deep cleans.’

6) Don’t neglect the outside space

When a tenant has rented a property with outside space, they will be expected to leave it in a similar condition to when they moved in.

‘This shouldn’t require taking on any big landscaping project,’ says Farooqui

‘But it’s best to keep it in the state in which you moved into it, whether that means taking out weeds, raking the leaves, or removing any rubbish in the space.

‘It will show that you’ve been looking after the whole property and avoid any costly gardening fees.’

7) Be prepared to go to adjudication

A deposit dispute can be referred to a professional adjudicator to resolve the matter.

‘If renters fail to reach an agreement with the landlord when they move out, the best option is always to refer the matter to the adjudication scheme that the deposit is registered with,’ says Clair. 

‘Adjudicators will then assess the landlord’s claim against the tenants representations and make a decision on what to deduct if anything.’

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