Business and Management

What Can Be Deducted From A Tenants Deposit




For a landlord, a tenant’s deposit is a protection against damages caused by the tenant that aren’t covered by the rent or repaired at the end of the tenancy. This has led to less than scrupulous landlords looking for any possible excuse in order to keep that deposit, and as such there are now very clear regulations about what costs can landlords deduct from a tenant’s deposit.

Property Damage
This is the main reason for deductions on a security deposit, and one of the most contested ones with arguments between landlords and tenants being sadly all too common. It is important to keep in mind that a normal amount of wear and tear is to be expected, and that can’t be deducted from the deposit. So while a burnt mark in the carpet is clearly damage and can be repaired from the tenant’s deposit, you cannot expect the deposit to cover resurfacing laminate countertops every few years. You should keep in mind that the flat will look worse than it did when the tenancy started, and keep a separate budget to redecorate, if necessary, in between tenancies.

If you enter a dispute with your tenant about the deposit, keep in mind that third party arbitration aims are to reach a fair solution, and they will take into account not only the original status of the property, but also the materials used and any replacement will need to be like for like. For example, if you installed the cheapest granite worktops you could find, and the tenants cause damage to them, you will only be able to deduct the original cost minus any loss of value caused by wear and tear since the day you installed them.

Leaving Early Or Owing Rent
If your tenant is leaving early, you may be able to keep some of their deposit to compensate for the costs of finding a replacement tenant. However, this needs to be stated on the tenancy agreement, and refusing to return the deposit on the grounds that the tenant broke the tenancy early when it’s not on the tenancy agreement can land the landlord in trouble. Unpaid rent can’t automatically be paid off from the deposit, and as a landlord you should refuse any attempt by a tenant to forfeit the deposit in lieu of the last month’s rent.

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