DEPOSIT SCHEMES - FRIEND OR FOE?
We all know that decisions on deposit claims can tend to fall onside of the tenants , here are a few tips I felt were worth passing on..
We have just had a claim independently adjudicated by our deposit scheme provider and were saddened at the outcome, we all know that decisions can tend to fall onside of the tenants but a number of things were highlighted in the final decision report which I felt were worth passing on..
In order to be successful with a deposit claim the landlord/letting agent must prove the following:
· The tenant was in breach of their obligations or liabilities under the tenancy
· The amounts claimed are reasonable costs or losses incurred or likely to be incurred as a result of the tenants breach or liability.
How do we prove this? Well inventories and check out reports are the most important sources of evidence in claims made to the deposit scheme. It is important that they contain the following:
· The property address
· The date of preparation
· Who carried out the report i.e. are they an independent inventory provider?
· Lots of detail and not ambiguous
· Clear and dated photography
· That the tenant has signed the report
· The check in and check out reports can be compared and have similar detail
It is also important that the reports are completed as close to the start and finish of the tenancy as possible.
When obtaining quotes to support your claim it is imperative that they are detailed and make reference to the fact that any damage caused was done so during the tenancy. Categorising each issue with a breakdown of costs is also helpful.
When it comes to making a claim for cleaning (which is one of the biggest issues at the end of any tenancy) it is important to highlight at the start of the tenancy to what standard the cleaning was done, fair and good are not helpful, submitting receipts for any professional cleaning carried out prior to the commencement of tenancy is a great form of proof.
Betterment
What is it? Betterment means that the law does not allow the Landlord or Letting Agent to claim new for old from the tenants deposit. This would result in the Landlord receiving a better item or more money that the item was worth at the start of the tenancy meaning the landlord is better off than when the tenancy started. To make allowance for fair wear and tear and betterment the law makes an adjustment taking into account the following:
· The condition of the item at the start of the tenancy
· The average lifespan of said item
· The appropriate use of the item
· The length of the tenancy
· The number and age of the tenants/occupants
When a claim is made for the replacement of a damaged item, the adjudicator will consider whether the damage is minor and what affect the damage has on the use of the item, it may mean that there is no award made for a replacement but for the diminution of value to the item. This means that if the item can be repaired you may be more successful in your claim to quote for a repair rather than a replacement.
When it comes to redecorating, the adjudicator must take into account the impact that ‘fair wear and tear’ has on décor. Décor does not last forever and some wear and tear will occur, especially in high traffic areas and when there are many people residing at the property. According to ARLA Propertymark guidance the adjudicator must consider the following:
· The length of the tenancy
· What the décor was like at the start of the tenancy
· How many people live at the property and their ages
· The lifespan of the décor
· If any works or repairs were carried out during the tenancy
ARLA Propertymark guidance suggests the following approximate lifespans for decorating:
· Between 2-3 years in hallways, bathrooms and kitchens
· 4 years in living rooms
· 5 years n bedrooms
· 6 years in dining rooms
If the tenants have damaged walls by putting in screws or nails, this is not classed as fear wear and tear however you will need to provide evidence that they were not there at the start of the tenancy.
Our biggest piece of advice for landlords is to be detailed and prepared, it doesn’t matter whether the person renting your property is a complete stranger, friend or a family member, there is always potential for things to go wrong and if you haven’t been prepared you will not have a fighting chance should the need arise for you to make a claim from the tenants deposit. Don’t forget damage is not always malicious and more often than not is accidental. You may feel that you do not need to have an inventory done if you know the prospective tenant but what happens if they cause accidental damage and hope that you are willing to forgo any recompense due to your relationship?
The same goes for tenants, protect yourself, check your inventory with a fine tooth comb as soon as you move in to the property as this will undoubtedly save you time, money and the stress of dealing with any potential unwarranted claims when you come to moving out.
If you are a self managing landlord in need of assistance in this area, give Sal our Head of Lettings a call, we look forward to hearing from you.
