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Calculating correct compensation charges ‘the holy grail of letting’

Compensation charges at the end of tenancies can be very contentious and as a result, lead to deposit disputes, especially when there is little or no evidence to support the charges.

Landlords who are calculating the cost for compensation charges against a tenant should ensure that the costs are reasonable and fair. They should also have a working knowledge of the accepted principles of compensation and explain to their tenants how they have worked out the deductions. If landlords can prove how they arrived at the proposed deductions from their tenants’ deposits, all parties involved will be happier to accept the decisions.

In order to work out accurate compensation charges, landlords need the original cost of an item, age and condition at time of check-in, length of tenancy, average life expectancy of the item, and any extenuating circumstances. Landlords should be able to provide written evidence of the original cost and age of the item for any compensation claim.


For example, if a tenant damages vinyl or laminate flooring with drag marks, deep scratches or scrapes, burn marks and stains, these are considered to be chargeable issues. However, a small number of surface scratches, nicks and minor indentations are considered to be consistent with fair wear and tear, depending on the length of tenancy and original condition.

Landlords need to ensure that when they are making their compensation calculations they do not charge for betterment or fair wear and tear. If an item, such as a carpet, was old at check-in and after a two-year tenancy there is some additional damage, the law will not allow a landlord to simply replace the carpet with a new one.  However, there is some compensation allowable towards the item.

Normal wear and tear is a fact of life with rental properties. However, there is a distinct difference between fair wear and tear and actual damage. For example, carpet tread will flatten over time where there has been foot traffic, but cigarette burns, stains or soiling will require a charge.

The final compensation cost will depend on a number of factors, such as if pets and children were in the property, any previous wear and tear, quality of the items, etc. Landlords need to ensure they have brought together all the evidence to reach a safe conclusion.

This evidence will require detailed descriptions and photographs taken at the start and the end of the tenancy as part of an inventory. If a professional inventory has been supplied for the property, then its condition will have been fully recorded at the start and the end of the tenancy. This is the bulletproof evidence that landlords need to support a claim for compensation charges.

Jax Kneppers is the co-founder of Imfuna Let.

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  • David Porter

    Bullet proof evidence unless you're dealing with the DPS, who on one occasion ignored 118 check-out videos we sent them. Another time they decided that a check-in video showing a stone bird bath in the garden, and a check-out video with no bird bath, was not sufficient evidence to prove the tenant had taken it. Not sure what evidence the DPS require to show an item is missing. On yet another occasion they disallowed redecoration costs, even though these were apportioned to allow for condition at the start of the tenancy. Even when we provide cast iron, extensive written and video evidence, with itemised quotes and due allowances made for wear and tear, we still only get half the money claimed, which is generally less than the cost of the inventory, check-in and check-out. Taking into account the time it takes to submit the dispute evidence, it would be cheaper for us to pay the costs of any damages out of our own pocket, and not bother with inventories or deposits.


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