More work needed to reduce tenancy deposit disputes

Considerably more must be done to help reduce the number of tenancy deposit disputes, despite the recent improvements recorded in the sector, according to the Association of Independent Inventory Clerks (AIIC).

The industry body acknowledged the fact that the volume of disputes are low, with just 28,100 requiring resolution by the three government-approved protection schemes - MyDeposits, Deposit Protection Service (DPS) and the Tenancy Deposit Scheme (TDS) – in the year to March 2016 according to the Department for Communities and Local Government (DCLG), which is the equivalent of 0.82% of total deposits, but there are still problems that need resolving.

According to the TDS, cleaning features in 57% of all tenancy deposit claims it deals with, while damage to fixtures and fittings is mentioned in 51% of cases.

“The issues of cleaning – or a lack of it – and damage in rental properties come up time and time again at the end of tenancies, and it’s clear that these problems are responsible for a high number deposit disputes that do occur,” said Patricia Barber, chair of the AIIC.

But for a long time, fair wear and tear has been a grey area for landlords and letting agents alike, and because it tends to vary from case to case, it is among the least understood areas of the letting process, and one which can create much ambiguity and causes a high level of disputes at the end of a tenancy. 

Disputes can sometimes end up involving a formal Alternative Dispute Resolution service that generally tends to side with the tenant if the landlord or agent is unable to provide suitable evidence to support their claim. This is because the adjudicators’ starting position is the tenants deposit belongs to the tenant, and so if a landlord wants to claim for any part of the deposit, they have to prove the condition the property was in at the start of the tenancy, as well as the end.

Since the introduction of mandatory deposit protection schemes, an accurate schedule of condition has become almost as important as the tenancy agreement itself.

As well as being used as evidence in a dispute, a detailed and precise inventory completed at the start of the tenancy, and again when the tenancy ends, also underlines exactly what is expected of the tenant, while it can also help landlords avoid a disagreement in the first place.

Barber continued: “If landlords make sure tenants are issued with a detailed and thorough inventory at the beginning of the tenancy, then it’s easier for all parties to determine the condition of the property when the contract finishes.

“This in turn makes it easier for landlords and tenants to agree on any required deposit deductions which could lead to fewer formal deposit disputes.”

To help enjoy a risk-free tenancy, it is generally good practice for tenants to have an end-of-tenancy cleaning checklist, while landlords should have an inventory, which records the condition of the property with written notes, photographic evidence, as well as details of the contents, including fixtures and fittings. 

While some landlords may wish to conduct their own inventories, it is strongly advised that they use an independent inventory firm to compile a factual report and detail of the schedule of condition to ensure that it is impartial and objective, with the cost of this service starting from less than £100.

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