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Advice for landlords on how to reduce deposit dispute risk

Newly released data shows precisely what subjects lead to deposit disputes - and a long-standing issue is in the number one spot.

Cleaning remains the primary cause of disputes; of cases submitted to The Dispute Service in 2019-2020, this was cited in 42 per cent of cases.

Next up with damage to the property (41 per cent) closely followed by the need for redecoration (39 per cent).

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Then came gardening problems (23 per cent) and rent arrears (14 per cent).

The data also reveals that in recent years, there has been a steady increase in the proportion of disputes being raised by tenants rather than landlords. 

In the year to March 2020 - the latest data available - this rose to 74 per cent, compared to 67.4 per cent in the previous year.

However, in total there were 34,993 disputes in the year to March 2020, down from 35,513 the previous year. 

The drop in disputes occurred despite a rise in the number of tenancy deposits in England and Wales at the end of March 2020, which reached 4.1m, up from 3.9m in 2019.

Paul Oxley, managing director of PropTech firm Decorus for Sage, comments: “According to the TDS, many tenants claim that the cleanliness of the property at the start of the tenancy was not clear, or that the tenancy agreement did not make clear what was expected of them. So it is vital that landlords have a proper inventory prepared and do a thorough check-in and check-out, so they have the right proof of condition at the start and end of a new tenancy agreement.”

He advises landlords to conduct thorough check-in and check-outs at the start and end of the tenancy, including photographs and videos plus written descriptions to show the condition of the property and its contents.  

Decorus for Sage has outlined what it calls “some common mistakes” which increase the risk of a deposit dispute:

 

- "Landlords make the mistake in thinking that inventories can be heavily comprised of photography and video. Completely photographic or filmed inventories without a complete written accompanying report are almost useless."  

- "There is no need to photograph every single corner of the property as this is simply  a waste of time - stick to the important things. Films and photographs alone will be of little use in a dispute when an adjudicator is trying to find hard evidence of a particular area." 

- "Many landlords do not carry out a thorough and full check-in and check-out of the property at which the tenant was present. Landlords and agents who don’t have this available when they go to court, have little chance of winning the case."  

- "Often there is no correspondence with the tenant that is documented and no receipts are kept for the deductions on the deposit eg cleaning and repairs."

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    The DPS use a set of rules that is biased to the tenant. For example, they assume carpets have a 10 year life span, so if your tenant has a cat and moves out leaving your carpets clawed to pieces, they will only pay out 50% if the carpets are 5 years old, nothing if they are 10 years old. I recently experienced this scenario where the tenants went in with perfect 3 year old carpets, left 2 years later, and I had to replace them because their cat tore them to pieces. DPS would not give me the full cost of replacement even though I had reports, photos, etc. I also have a house that has carpets over 20 years old and they are still like new because they cost a lot initially, so what happens if the tenant ruins them? The deposit protection system has become just like anything the government gets too involved in, completely over regulated!

    Mark Wilson

    was it really needed in the first place?

     
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    Basically we now need to charge a bit extra on rent to supplement the shortfall in deposities, so once again the good tenant loses out

     
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    Mark W

    Why did that matter?

    It was supplied in almost perfect condition and trashed by tenants,so should be replaced by the tenants.

    Where can you buy a fraction of a carpet? Landlords should also be compensated for the time and hassle in replacing damaged property,not compelled to offer a discount!

     
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    You cannot claim from a deposit on a new-for-old basis, that is correct. That is not the rule of the DPS, it's the law and always has been. The schemes follow the law because otherwise all of their adjudications would be overturned by the courts.

     
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    Mark, has a point was it really necessary I suppose the bare Floor Boards would be too good for them, maybe LL could have given them a couple of bails of straw or a few sods of turf.

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    I have been with DPS since it’s inception with over 100 properties registered, and only made 1 claim in all those years, I could not believe it when I was told I could only get 50% of a carpet! It’s unbelievable.

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    I have moved away from carpets and now laminate rooms if there is damage I just get the damaged planks swopped out and keep receipts for carpenter. That along with photo date stamped whenove in should be sufficient.

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    I have now gone down this route for the downstairs, but in order to get a quality and warm feel upstairs, we like to put proper carpet and underlay in. 99% of tenants respect it but if pet tenancies become standard, I will be putting laminate in everywhere.

     
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    Given what some tenants believe 'clean' means I'm not surprised that this is the number issue. I've yet to meet a tenant who realises dust & grease settle on the top of kitchen cupboards and limescale seems to be an alien concept - I don't know what some tenants do to toilets!!

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    Don't think I want to know what some tenants do to toilets, I use one shot drain cleaner that sorts them.

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    Keep them out of the loop life is too short.
    By pass the DPS and contact the guarantor for full payment. A lot of LL's forget that the DPS is only interested in the amount protected. The amount of damage or arrears is substantially more. Once guarantor has settled release full bond and everyone has a clean record. It works. Also another tip when claiming small amounts do not accept the tenant saying take it off the bond as they can dispute afterwards. Pay first then whole bond returned - Your welcome

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    Thanks for the telling the whole world the tactics you're using. I'm forwarding this on to Leeds Council.

     
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    @ John Smith, I suspect Leeds council will laugh at you.

     
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    John Smith go ahead useless streak. It’s all 100% legal you thick idiot. I’ve got the number for you 0113 247 7594 ask for Alex in Licensing (good bloke as it happens). As for me I’m easy to find for a cosy chat I’ll be waiting. There’s also the other councils I’m licensed with to grass me too laugh in your face

     
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    It seems that John Smith is another saddo who likes himself - reminds me of some others who mercifully no longer share their wisdom with us.

    Well done Jahan! It's important to get compensated by the culprits so that decent tenants don't have to foot the bill. Idiots don't seem to understand how much protecting the rogues hurts the decent tenants and landlords.

     
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    If you claim against a guarantor while you hold a deposit, inevitably that claim will be struck out as an abuse of process (you already have an effective remedy without going to court), and you may leave yourself defenceless to a claim from the tenant for the return of the deposit (you can't obtain double recovery). And if you proceed against a guarantor and lose, expect to be ordered to pay costs on an indemnity basis - because you could have used DPS for free. Even in the Small Claims Track, the court has discretion to award costs on this basis where it believes you have behaved unreasonably. If a guarantor is worth suing, by definition they also have the wherewithal to fight you.

    There is sometimes a misleading belief that a guarantor is required to pay you on demand. Not so - a guarantor is entitled to be satisfied that he or she is really indebted to you, and may require you to prove it in court - essentially, to prove not only that the tenant owes you money but also that it is a sum which they have guaranteed. Expect a claim which ought to have been brought against the tenant through the DPS to be treated extremely sceptically by the court, and that is before we get to the inevitable application for the case to be stayed while a DPS claim is pursued.

    You aren't obliged to use the DPS - but neither is your tenant, they can obtain a CCJ against you, and your refusal to use Alternative Dispute Resolution will give them the perfect excuse. There are a few people here who take malicious pleasure in the consequences of a CCJ. Bear those in mind!

     
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    Leics Landlord - Re read what I posted, engage your brain fully, now think about it.
    The DPS only cover the deposit not the full amount owing which is often much much more than the actual bond!

     
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    Jahan, I'll leave the personal abuse to people who are unable to sustain an argument.

     
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    I'm not arguing with you. I've actually told you & you still don't understand how to do it. You are being argumentative!
    Sleep on it and you might realise in the morning

     
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    LL. There's nothing wrong in asking a tenant or guarantor to compensate on a moral basis before invoking the law. It often works with decent middle-class guarantors who want clear consciences.

     
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    What it is Robert is I can't abide stupidity and this bloke if you check his previous comments lives up to it. He threatens to tell this authority or that company. (Bullying & I can't stand bullies)
    I know there seems to be constant bad news for us as a LL but I am determined to continue to protect my business which is providing quality housing to good hard working people. Characters like this idiot will put himself and innocent families on the streets if we cannot trade.
    Whilst I'm allowed on this forum nothing will stop me; Shelter, GenRent, Acorn none of them from sharing any tip,tactic or legal advice to my fellow landlords to help them protect their livelihoods & in turn their good tenants so they can have a roof over their heads.

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    Your advice above is catastrophically bad. You could easily bankrupt a landlord who is foolish enough to follow it. Sadly, I fear you are correct that nothing will stop you.

     
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    Well you got something right there nothing is going to stop me I adapt and overcome. When fellow LL's ring me up for help my aim is to give value & save them from bankruptcy.

    As for you in this forum you've added nothing but negativity!!

     
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    Dear God, anyone needing advice should contact a properly qualified and insured professional - and you should tell them to, for your own sake if not theirs. Sorry if this is too negative for you. Sometimes we all find the truth uncomfortable.

     
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    You mean employ a solicitor? I do that when I have to some of the time.
    What about you? What pearls of wisdom other than seek a brief can you offer?
    S'alright I'll wait here shall I

     
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    Haha...

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    You have my sympathy John.

     
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    John. Sadly idiots do tend to like and laugh at themselves as no one else does!
    I really hope your bank balance or IQ never gets mixed up with any of the genuine landlords on this site as I'm pretty sure our numbers for each will substantially exceed your own modest ratings.

     
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    I had the privilege of meeting the Dalai Lama once, a genuinely humbling experience. I find it helpful to think of him whenever I am tempted to sneer at someone's bank balance. Most of the world's great religions - and non-religious moral philosophies - contain similar teachings. I hope these thoughts are positive enough for you. Peace be upon you.

     
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    I knew it. You are jealous of us because of your perceived view that we are all well off & you didn't play the game right....

    Don't sneer because someone has done better than you financially -(money is only an indicator after all. means nothing really). There is plenty to go round. You would do better to lose that envy trait so endemic in the left & apply yourself

     
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    Well, I’m glad I mentioned the cat story! 🤷‍♂️🤣

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