Renting a property usually involves paying a security deposit – a sum meant to safeguard landlords against tenants not adhering to the tenancy terms and conditions. However, it’s essential to understand what kinds of deductions are permissible from these deposits and, more importantly, how you can protect this money and ensure its return when you move.
An important point to note is that there are some rules that landlords need to follow before making deductions from a tenant’s security deposit in the UK:
- Security Deposit Protection: For Assured Shorthold Tenancies * (ASTs), it’s mandatory for landlords to secure a tenant’s deposit. This must be done using a government-approved tenancy deposit protection scheme within 30 days of receipt.
- Supply of Prescribed Information: It’s not just about securing the deposit; landlords also have a duty to inform the tenants. Once the protection of the deposit has taken place, landlords need to provide tenants with the relevant prescribed information. This is a brief description of where the deposit is secured and detailed terms and conditions of the chosen scheme. And there’s a timeline to follow: this should be done within 30 working days of the deposit’s protection.
- Proposed Deductions: Before going ahead with the deductions, landlords are expected to lay out a plan. This includes detailing out the deductions and the reasons behind them. This proposal should be shared and agreed upon with the tenant before any deductions are made. If there are any proposed deductions from the deposit, landlords or agents must return the undisputed amount to the tenant and try to resolve the dispute through negotiation or mediation.
- Reasonable Deductions: Deductions should not be arbitrary. They must be reasonable, proportionate, and clearly stated in the tenancy agreement. This is done to make the tenants aware of what situations could lead to deductions from their deposit.
* An AST (Assured Shorthold Tenancy) is the most common type of tenancy and applies if the property is privately owned, the tenancy started after 15th January 1989, the annual rent is below £100,000, and the tenant, or each of the joint tenants, is an individual and occupies the dwelling as their primary residence.
What Can Landlords Deduct?
- Property Damage: Landlords may rightfully deduct the costs of repairing any damages to their property that exceed normal wear and tear. To avoid any contentious issues, consider sharing regular updates through photographs and written communication of any damage that may have inadvertently occurred.
- Unpaid Rent: If you’ve left the premises with rent arrears, your landlord is permitted to deduct these amounts from your security deposit. Regularly keeping track of your payments and maintaining an open line of communication with your landlord can help prevent misunderstandings.
- Professional Cleaning Costs: When you move out, if you’ve not left the property nearly as clean as when you first moved in, landlords can use part of your deposit to cover professional cleaning services. It’s a good idea to factor in a thorough professional clean before exiting the property to minimise the risk of such deductions.
- Missing or Damaged Items: Should some items be missing or ruined beyond repair, landlords can use the deposit to cover replacement costs. Keep an inventory of your property’s items and address any damage or loss as soon as it occurs.
Proactive Measures to Secure Your Deposit
- Inventory Check with Photographic Evidence: Insist on a thorough inventory check-in and check-out process at the beginning and end of your tenancy. Keeping these records accurate and signed by both parties will help avoid any disputes down the line. Ensure that detailed and clear photographic evidence of the property and any fixtures and fittings is included. If there is a dispute at the end of the tenancy, these reports will be critical in your defence.
- Regular Maintenance: By promptly reporting any issues that arise during your tenancy, cleaning the property regularly, and generally keeping things in good shape, you can protect your deposit from deductions. Remember, taking care of small problems as they arise can prevent them from becoming big, costly issues.
- Communicate: Keep communication channels with your landlord open throughout your tenancy. This way, you can resolve any issues directly and quickly, ensuring a healthy relationship and minimising the potential for disputes.
The Recourse Available for Unfair Deductions
- Deposit Protection Schemes: In the event of a disagreement about deductions, you have the right to raise a dispute with the government-approved deposit protection scheme your deposit is registered with. Follow the scheme’s advice and guidelines to build a strong case for yourself. Any decision the adjudicator makes is final and legally binding.
- Legal Counsel: In rare cases, the adjudicator may decide that the case would be better handled in a formal court setting. If the parties are engaged in court proceedings, the adjudicator will be unable to consider the dispute. The Court has superior jurisdiction, and the adjudicator must await the Court’s decision before considering the deposit dispute. If the adjudicator believes that either party is being vexatious or frivolous, the dispute may be dismissed.
- Citizens Advice: In a dispute, the Citizens Advice Bureau can provide helpful guidance. They can offer practical tips and resources that are applicable to your specific situation and location.
- Partnership with a Tenancy Expert: Consider partnering with an expert in tenancy-related matters, such as Klippa Relocation. Their experience and knowledge can be invaluable during any conflicts you may face.
In conclusion, while security deposits are standard practice when renting a property, knowing what can be deducted and how to safeguard your funds are critical aspects of a successful tenancy. By opting for proactive measures and maintaining open communication with your landlord, you can navigate your tenancy smoothly and without unnecessary financial loss.