Reclaiming Tenant Deposits

 I’ve little confidence in predicting the effect of Brexit on the property landscape and so I thought I would focus on something  which I can write about with some authority.

Tenant Fees Ban:

2019 has been the year that we have seen the introduction of the tenant fees ban. Possibly bad news if you have a lettings business but it may make the lettings market a little more fluid with tenants more able to move as their circumstances and family sizes change, rather than being stuck in their current property unable to raise the fees, rent and deposit for their next home. Increased mobility could see an increase in the number of tenant changeovers you have and so this month I thought we could dive into the subject of reclaiming deposits.

Some landlords have a very positive view of the deposit protection services whilst others are less than impressed. In my experience the results you receive from the deposit schemes are directly linked to the organisation and due diligence undertaken as part of the initial tenancy set up. The phrase “Failing to plan is planning to fail” is certainly appropriate in the world of deposit reclaims!

The following should hopefully serve as a timely reminder to make attention to detail with your tenancy set ups, one of your new year resolutions.

Quality Inventory:

The first thing to bear in mind is that you must have a good quality inventory undertaken prior to the start of the tenancy. I have seen people undertake an inventory once the tenant has moved some of their chattels in. This is no good. The inventory must be detailed, thorough and must be agreed as a matter of fact by the tenant, at the outset of the tenancy.

You can undertake them yourselves, perhaps using one of the number of “Apps” that are available or alternatively there are many dedicated Inventory Clerks out there who would love the work. You may wish to find someone who is a member of the Association of Professional Inventory Providers (APIP)

Good quality, date stamped photos should form a central part of the inventory together with a detailed written description of the age and condition of all items.

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On this basis you will be able to judge which items have suffered beyond the accepted wear and tear, which items have gone missing and you will be able to enforce the covenant which requires furniture and items to be left in the room in which they were found.

Just by achieving the above you will reduce the quantum of deposit disputes you have.

I appreciate it’s not a perfect world and with the best preparation you may still end up in dispute regarding a deposit. The procedure for claiming back the deposit must be just as meticulously followed.

Timing is everything!

You must comply with the various timescales imposed by the deposit firms and provide complete and full information.

I have seen cases rejected where a landlord requests a deduction from the deposit of £30 for a missing shower curtain with only the £5 receipt for the shower curtain but yet have seen similar claims approved and  for a higher amount where the claim is more fully detailed with a breakdown of the cost of the shower curtain and a second invoice from the contractor to attend and fit the item, and where necessary refix the shower curtain fitting.

I have seen other cases where landlords want to claim for legitimate arrears from the deposit but yet presented their claim so badly that the award went in favour of the tenant.

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My personal preference is to try and negotiate with the tenant before seeking to rely on the dispute resolution of the deposit firms. By doing so it is more likely that the relationship with your tenant can end in a positive way but also it means that you will get your money more quickly. One method I have seen work very effectively is to offer the tenant a reduced deduction if they settle voluntarily and a more punitive claim in the event that they force the matter through dispute resolution. To give an example let us say that the property requires carpet cleaning, oven clean and some holes in the wall repaired and filled. The tenant may voluntarily agree to the deductions for two of these if they can be let off the third. Such a strategy may suit you if you are just keen to move forward with the ongoing letting of the property.

I find it odd that some people attend to these matters in a hurried or slap-dash way. Property is your business and you should take it seriously. Neither Companies House nor HMRC would be impressed were  you not able to provide the documents they requested so please do not be critical of the deposit schemes for taking a similar view!

Still stuck?

As always I am happy to assist readers and can be contacted on 01843 583000 or [email protected]