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Landlord and Tenant Deposit Disputes

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As landlord and tenant solicitors we have seen a rise in deposit disputes between landlords and tenants at the end of tenancy agreements. Senior housing caseworker, Nollienne Alparaque, hasn’t conducted a formal survey of why deposit disputes are on the rise but believes the answer lies in the financial fallout of COVID-19 with both landlords and tenants more anxious about retaining or recovering tenancy deposits leading to deposit disputes. In this blog we look at deposit disputes and how tenants can deal with them.

Online and London based deposit dispute solicitors

If you need legal advice about a deposit dispute then the landlord and tenant team at OTS Solicitors can help you. Call OTS Solicitors on 0203 959 9123 or complete our online enquiry form for an appointment by video conference or telephone.

Where is the deposit?

If you are a tenant involved in a deposit dispute one of the first things that a deposit dispute solicitor will ask you is ‘where is the deposit?’. That is because the deposit could be protected by a deposit scheme or be an unprotected deposit. It is important to know the answer or to have your tenancy agreement handy so your deposit dispute solicitor can check the position for you so they can give the best deposit dispute advice tailored to your situation.

What does the tenancy agreement say about deposit disputes?

It may seem obvious but one of the best ways to avoid a deposit dispute is to read the tenancy agreement at the start of the tenancy agreement and towards the end of the tenancy agreement. If a deposit dispute does arise then you will need to show the tenancy agreement to your deposit dispute solicitor. That is because the tenancy agreement may set out whether the deposit is protected and, if it is, under which scheme and detail both the landlords and the tenant’s obligations under the lease. It is normally the wording of the obligations and arguments over whether obligations have been complied with that lead to deposit disputes.

One of the most common reasons for deposit disputes is a failure on the part of either the landlord or tenant to understand their obligations and duties under the tenancy agreement. It is easy for deposit dispute solicitors to understand how that happens as if you have been renting in London for some time and signed a number of tenancy agreements over the years you can assume that every tenancy agreement will be the same. They are not, so it is best not to be caught out by something as simple as not checking and negotiating the tenancy agreement and deposit terms when you sign up to the lease. By checking the tenancy agreement and, if necessary, taking legal advice on the tenancy agreement if you aren’t sure about it, you can avoid what you later think are onerous tenancy conditions that in turn lead to a deposit dispute.

Is the deposit protected by a tenancy deposit scheme?

It is important to understand if your deposit is protected in a tenancy deposit scheme or not. If the deposit is protected you need to understand which tenancy deposit scheme was used by your landlord or their agent. If your deposit should have been protected under law but your landlord failed to do so then this will have legal consequences for them and could make it harder for them to take possession of your rented property.

What is tenancy deposit protection?

Under the law if you pay a tenancy deposit for a relevant type of tenancy your deposit should be protected by your landlord by them placing the deposit in an approved deposit protection scheme. There are three approved deposit protection schemes:

  • My deposits
  • The deposit protection service
  • The tenancy deposit scheme.

What happens if a deposit isn’t placed in a tenancy deposit scheme?

If your deposit should have been placed in a tenancy deposit scheme by your landlord but wasn’t then this means that your landlord can't use the procedure of giving two months’ notice for possession of the property. In addition, you may be able to:

  • Defend possession proceedings
  • Apply for compensation - the amount of compensation could be up to three times the amount of the deposit.

You may also have a claim if your deposit wasn’t protected when it should have been as a landlord only has thirty days to sort out deposit money in one of the three approved schemes. Failure to comply with that timescale has consequences for the landlord.

If your tenancy agreement is a type of tenancy that doesn’t legally require your deposit to be protected in one of the three approved schemes then different considerations apply. You should be able to apply to court for the return of your deposit but it is best to take legal advice from deposit dispute solicitors before making a court application so that you have specialist deposit dispute advice on the prospects of success and your best options.

When should a deposit be returned to a tenant?

A landlord should return a deposit within ten days of the end of the tenancy agreement. If there is a deposit dispute but the landlord only wants to argue about retaining a proportion of the deposit then the amount of the deposit that isn’t in dispute should be returned to you.

A landlord can argue that a deposit should be retained if:

  • Rent is unpaid or
  • The rented property or items in the rented property have been damaged.

It is normally the case that it is clear whether rent has been paid or not unless there is a dispute about whether and when the tenant gave valid notice. However, damage to property or allegations of damage is a frequent source of deposit disputes.

A landlord can only make reasonable deductions from the deposit for damage to the property (or items left at the property where a rented property is let on a furnished basis) if the damage is more than normal wear and tear. The definition of wear and tear is where most tenancy agreement deposit disputes arise. Tenants often feel that their deposit is being used to renovate the property or replace items and that these are overheads that a landlord should budget for as part of their business expenditure.

What evidence is needed for a deposit dispute?

The evidence that you will need for a deposit dispute will depend on the nature of the dispute. However, in all cases you will need a copy of the tenancy agreement. You will also need evidence of any correspondence over the issue in dispute, for example, evidence of rent payments if payment of rent is in dispute or correspondence over repairs or damage to the property or photographs taken at the outset of the tenancy agreement that show the state of repair of the property at the outset of the tenancy agreement.

Online and London based deposit dispute solicitors

For advice on deposit disputes or on any aspect of landlord and tenant law call the friendly and efficient landlord and tenant team at London based OTS Solicitors on 0203 959 9123 or complete the online enquiry form for a video call or telephone appointment.

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