As a landlord, you are responsible for protecting your tenant’s deposit during their tenancy and, in exchange, you expect them to protect your property. But, if they don’t, what deductions are you able to make from their deposit?
First, it is very important to outline in your tenancy agreement any potential reasons for taking money off the deposits. You should include all of the valid reasons listed below and it’s pragmatic to include a clause stating that you can deduct from the deposit for any breaches of the tenancy agreement.
Make sure you have an up-to-date inventory list that has been agreed on by both yourself and your tenants. You should list all items and furnishings and make a note of any existing damage or marks. You should also be sure to include photos, so that you will have evidence to back you up in the case of any disputes.
What deposit deductions can you make?
- Unpaid rent
if a tenant is behind on their rent, you are fully entitled to take the amount that they owe you from their deposit.
- Property damage
if your tenant has damaged your property beyond the level of reasonable wear and tear, then you are allowed to take money from their deposit in order to fix the damage.
- Cleaning costs
if your property has been left dirty by the tenants, you may cover the cost of hiring a cleaner from their deposit.
- Missing items
much like if a tenant has damaged your property, if they have removed items, you are able to claim this from their deposit. However, this must be done on a like-for-like basis; you cannot charge the tenants for a more expensive version of the original.
What are you not allowed to deduct for?
- General wear and tear
examples of general wear and tear are worn carpets, faded curtains, and minor scrapes and scuffs on the wall- anything that would come about during normal day-to-day usage of the property. Obviously, if anything is substantially damaged, you are well within your right to claim for it, such as a burn marks, or shattered mirrors.
- Repairs and maintenance for essential items
As a landlord, you are responsible for making sure any appliances that provide key functionality for the property are in good working order. This includes items such as the boiler, central heating, showers, oven etc. You are also responsible for the maintenance and repairs of the exterior and structure of the building, such as the walls, roof, as well as the plumbing and electrical wiring. So, unless the tenant has specifically caused these to malfunction, you can’t deduct any repairs or maintenance from their deposit.
- Unpaid bills in the tenant’s name
as long as the bills are addressed to the tenant, then they will be chased down for the cost by the companies and you will not be left out of pocket. However, if the unpaid bills are in your name, you may deduct this from their deposit.
- Costs for re-letting
Want to give a room a lick of paint before the new tenant’s move in, or replace an old looking sofa? You’ll have to pay for this yourself as you can’t charge the previous tenant’s for general wear and tear; so when the time comes to insert a bit of vitality into your property, it’ll have to come out of your own pocket.
- Breaches of the tenancy agreement not resulting in damage
Even if your tenants kept a pet in your property when the tenancy agreement specifically prohibited it, you may not make a deduction from their deposit. However, if the breach caused damage to your property, such as a dog chewed the sofa cushions, you may make a deduction for the damage caused.
How to go about making deposit deductions
As a landlord, you must return a tenants deposit within ten days of them asking for it, if you both agree on the amount. If you believe that you are entitled to make deductions, you must contact them explaining the amount you will deduct. If there is a dispute, you must return the undisputed portion of the deposit within the ten days, and you can return or keep the rest depending on the outcome of the dispute.
The majority of deposit returns are uneventful, however it always pays off to know your rights so that you don’t end up unnecessarily out of pocket.