How can letting agents reduce deposit disputes?

Deposit disputes can be time-consuming and difficult for all parties involved whether it be a letting agent, landlord, or tenant.

Although at times deposit disputes are necessary, there are several ways letting agents can prepare in order to reduce the likelihood of them occurring.

We have produced the below article to help estate and letting agents be aware of best practice on deposit disputes and how to avoid them.

Be clear on tenant responsibilities

A tenancy agreement is a contract between the landlord and the tenant that lays out what is expected of both parties.

Completing tenancy agreements with accuracy, detail and clarity can be key to avoiding tenancy deposit disputes as they make the tenant aware of what is expected of them over the course of the tenancy.

It is therefore important to make sure your tenancy agreement does/includes what you need it to.

What will you usually find included in a tenancy agreement?

• The names of all parties involved

• The start and end date of the tenancy

• The duration of the tenancy

• The amount of rent payable, how often it is to be paid and when it is to be paid

• The deposit amount and what it may be used for

• Any tenant or landlord obligations

• An outline of who is responsible for minor repairs outside of what the landlord is legally
responsible for

• Any notice period that is needed to be given by the parties to end the tenancy

If renting to multiple tenants and a joint tenancy exists, the tenants will be jointly and severally liable for all the obligations under the tenancy. This means that a landlord can pursue all or just one of the tenants in respect of any obligation that is not fulfilled. An example of this is non-payment of a share of the rent.

Damage caused by a pet can also cause an issue for landlords and agents. The addition of a pet clause in a tenancy agreement can be good as it provides extra clarity as to what is expected of the tenants by having a pet in the property. For more information on pet clauses, please click here.

Conduct thorough inventory reports

The Dispute Service data reveals that cleaning was the number one cause of disputes in 2019-2020. In general, tenants are only expected to return the property to the same standard or level of cleanliness as at the start of the tenancy.

As well as recording the condition of items and décor, the check-in and check-out reports should therefore also accurately reflect the level of cleaning at the start and end of a tenancy.

Often, we see cleanliness described by way of reference to a standard of clean e.g. professionally cleaned, high domestic, domestically cleaned. Providing a detailed invoice that shows the extent of the cleaning that was undertaken is a good idea as this can help if a dispute arises.

Detailed check-in and check-out reports that are properly completed provides both an inventory of contents and a description of the condition of the property and its contents. Using vague words to describe the condition of a property, such as ‘ok’, may not be helpful to the adjudicator.

A clear detailed inventory at check-in and check-out will allow you to compare the condition and cleanliness of the property at the start and end of the tenancy, so that you can easily and fairly establish the extent of a tenant’s liability, if any, taking into account betterment and fair wear and tear.

Adjudicators use these reports when deciding dispute outcomes, so it is important to make sure they are detailed, clear and agreed between the parties.

Some features of detailed check-in reports include:

• Full names and addresses of the landlord, tenants and letting agent (if applicable)

• The date when the inventory was conducted and the person who conducted it

• A thorough list of the interior and exterior, décor/fixtures and fittings

• The condition of these items (e.g. ‘small scratches to surface’ or ‘brand new, light use’)

• Meter readings/serial numbers/key lists

• Embedded photographs (if these are not embedded in the document they should be signed, dated and referenced to the corresponding part of the inventory)

Best practice is to ensure that the landlord and tenant sign and date inventories and any amendments. This is evidence that both parties have agreed the contents of the report is accurate. To access the TDS guide for inventory reporting, please click here.

Take dated photographs

Although images can be stored electronically, parties sometimes however seek to challenge digital photographs on the basis that the date they were taken can be changed easily.

One way to avoid this is to embed photographs in the relevant section for each area of the actual check-in and check-out reports.

Photographs supplement the written reports; however, they should not replace the written word. If photographs are dated, they can strengthen case evidence, particularly in relation to damage claims.

Present claims clearly

Use our deposit deduction template, available to our customers, to present your claims to a tenant in a clear and succinct way, highlighting that you have opted for the most appropriate remedy and considered fair wear and tear.

For more information on deposit disputes and tenancy deposit protection, please visit the TDS website by clicking here. Alternatively, you can access the TDS lounge which contains; real case studies, blogs and guides, for more information, please click here.

*Sandy Bastin is Head of TDS Adjudication Services