What happens in the event of deposit disputes at the end of tenancy?

With numerous tenancies coming to an end over the coming weeks, many landlords will be hoping their tenants leave the property as per their agreed contractual obligations. The gold-plated tenant vacation would be no rent arrears, the property professionally cleaned, all pieces of furniture in pristine condition in the right place, and the tenant having removed all of their possessions. But as most landlords will testify, that’s generally as rare as seeing England win the football World Cup.

So what is the process for dealing with deposit disputes at checkout?

The check out

In the current coronavirus crisis, many landlords are not conducting physical check outs. Instead, tenants are advised to post keys back through the letterbox on departure. Obviously, that does leave a potential problem: by not conducting immediate physical checkouts, it leaves a small amount of wriggle room for a tenant to argue that a property was not left in a certain state if a dispute between parties arises. Furthermore, if a check out is left for some weeks or even a month after the actual move, the aforementioned wriggle room has now expanded into a gaping chasm.

As a rule of thumb, deposit disputes are seen as a civil disagreement between parties, so the legal principle ‘balance of probability’ becomes the calculation when a decision is made by an independent adjudicator or judge. If the landlord is able to prove that damage was spotted at the earliest opportunity after a tenant had vacated, that would be beneficial.  With co-operating tenants, a landlord could request that they take pictures themselves of the condition on their behalf. However, it is likely that a good tenant would comply and send pictures through, whilst the tenant that had caused damage may be somewhat less trigger-happy with the smartphone in certain areas.

Damage and replacement

With current restrictions affecting the availability of certain services, there will be unavoidable delays in getting estimates for works or replacements for damage caused. This will more than likely cause a problem when it comes to negotiating a settlement within the deposit scheme stipulated ten-day period, after the tenancy had come to an end. If settlement is not reached within that period, a tenant has the right to raise a dispute with the relevant deposit scheme.

However, the deposit schemes have announced that they will show more flexibility with landlords that are (a) struggling to do a checkout immediately and (b) gain estimates for the works or replacements required. The deposit schemes have advised that if the landlord keeps them informed of the progress of a negotiation after the termination of the tenancy, they will hold off from allowing a tenant to commence a dispute adjudication at the end of the stipulated ten-day period.

Deposit dispute evidence

The evidence that should be submitted for the best chance of succeeding when a deposit disputes commences will be as follows:

  1. Check in and check out report: Ideally these should be signed to prove that the evidence contained within is agreed and accurate.
  2. Signed tenancy agreement: The first tenancy is sufficient.
  3. Signed periodic inspection reports: This is to confirm the condition throughout the tenancy.
  4. Estimates/quotes/invoices/receipts: Where possible this should itemise each piece of work done and cost involved.
  5. Rent Account: Only required if claiming arrears.
  6. Before and after photos: These should be time and date stamped.
  7. Any correspondence between parties: Relating to the issues being disputed.
  8. Witness statements: This could be from the landlord, agent, contractors, experts such as a surveyor or any other relevant third party.

Each of the deposit schemes should allow the landlord to upload the evidence onto their portal for ease and quick verification. Once each of the parties has submitted their evidence, the relevant file will be provided to the independent adjudicator for a decision. Time-wise, depending on workload, this could be anywhere from one month to a year.

Summary

The correct procedure for conducting checkouts will be tested over the coming weeks and months by tenants disputing deposit deductions. As always, if the landlord is unable to conduct matters in a timely fashion, they should always follow the evidence, evidence, evidence mantra. Having this evidence will hopefully demonstrate to the adjudicator why such potential holes exist in the processes undertaken by a landlord.

If you have any questions, please do not hesitate to contact the experienced team at Foxes Sales & Lettings. Call us on 01202 299600 or email lettings@foxes.co.uk

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