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What can a landlord deduct from a tenant’s deposit?

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When it comes to disputes between landlords and tenants one of the most common types of disagreement is whether a tenant should get their deposit back at the end of the tenancy and what deductions a landlord can make from the deposit. In this blog we look at the topic of what a landlord can deduct from a tenant’s deposit.

Landlord and tenant deposit dispute solicitors

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

What can a landlord deduct from a deposit?

Whether your landlord is an accidental landlord or a buy to let landlord the bottom line is that they need to make a return from renting their property to a tenant. That’s why the question ‘What can a landlord deduct from a deposit?’ is such a contentious subject between landlord and tenant with each side to the argument holding equally strong opinions.

Landlord and tenant solicitors will tell you that a landlord should only keep money back from a tenant’s deposit if it is justified because the landlord has experienced financial loss. A landlord can say that they have experienced financial loss because they need to replace carpets or make good damage to walls but it is all a question of degree and whether the issues with the tenanted property are ‘fair wear and tear’ by the tenant or something that amounts to damage to the property.Landlord and tenant solicitors advise that it all comes down to whether the deduction is reasonable or not.

What is a reasonable deduction from a tenant’s deposit money?

It is important to remember that a deposit given by a tenant at the outset of a tenancy is the tenant’s money. That means the deposit must be returned to the tenant at the end of the tenancy agreement unless retention of all or some of the deposit can be justified because, for example:

  • There is unpaid rent

  • There are unpaid utility bills such as gas or electricity

  • There is damage to the tenanted property that is beyond normal usage or wear and tear of the tenanted property over the term of the lease

  • The tenant has carried out work to the property without the agreement of the landlord. For example, the tenant has installed different light fixtures and an electrician will need to be asked to reinstate the old fittings

  • The tenant has disposed of items of furniture listed on the tenancy inventory prepared at the outset of the tenancy agreement.

Can a landlord deduct money from a deposit for a breach of the tenancy agreement?

At the end of a tenancy a landlord can be frustrated to discover that a tenant has breached their tenancy agreement. One of the most common examples of a breach of tenancy agreement is a tenant keeping a cat or dog at the tenanted property when the assured shorthold tenancy said ‘no pets’ as a condition of the tenancy. Whilst the landlord may be irritated by the breach of the tenancy agreement the landlord can only retain all or some of the deposit if the pet has caused financial loss. For example, it may be necessary to replace a carpet because a cat has damaged it. Whether the cost of replacing the carpet should come out of the tenant’s deposit will be influenced by the length of the tenancy. If the tenant has lived at the property for say ten years they could argue that carpets would require replacement in any event.

What is reasonable wear and tear of a tenanted property?

Although a landlord can try to use a tenant’s deposit to pay for damage at the rented property they can only try to deduct a reasonable amount to repair or replace on a ‘like for like’ basis. In other words, just like with an insurance policy, a landlord can't expect a tenant’s deposit to be used to cover:

  • Normal ageing of items such as soft furnishings being faded by the sun or

  • Replacing or repairing items to a better standard than the tenant found the property in at the start of their tenancy agreement or

  • The cost of repairing items that would naturally have worn out over the life of the tenancy. The length of the tenancy can be the key factor as a landlord would not reasonably expect to have to replace a carpet or bathroom furnishings after a six month tenancy but the position is less clear cut if the tenant has lived in the property for say five years and the items weren’t new when the tenancy agreement started.

How much should a tenant pay out of their tenancy deposit for damage?

If a tenant accepts that there is damage then another big cause of disputes between landlord and tenants is how much a tenant should pay for repairs or replacement. The repair or replacement costs and deductions should be reasonable and quotes should be provided if there is an argument over whether the deduction out of the deposit is reasonable.

A landlord may want money to replace an item but a tenant can argue that carpets or a piece of furniture could be professionally cleaned as replacement isn’t necessary or that the deduction for replacement should reflect the age and condition of the particular piece of furniture or other item. For example, if walls haven’t been repainted for a few years then whether there is a crayon mark or not the tenant may say that the property would have need redecoration in any event.

Landlord and tenant 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 ouronline enquiry form for a video conference, Skype or telephone appointment.

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