Revealed: Most common reasons landlords deduct money from tenant deposits

Thu 20 Jul 2017

A multitude of issues have the potential to force a landlord to deduct money from a tenant’s deposit to pay for repairs, with a new study revealing broken furniture to be the most common cause of all.

Breaks to chairs, tables and other items are the most common reason behind landlords withholding cash from a deposit return, with 29 per cent of tenants claiming to have experienced this.

Marks on the walls have led to a deduction for 24 per cent of tenants, while 21 per cent of those renting a home have been penalised for carpet stains, 12 per cent for redecorations and nine per cent for the presence of mould.

Allison Thompson, managing director at property specialist Leaders, says: “Deposits are essential for landlords as they provide security that any damage caused by tenants can be repaired at no financial loss.

“However, deposit deductions can cause disputes between landlords and tenants, so it is important to understand what causes them and how both parties can reduce the likelihood of such issues occurring.”

Leaders’ figures for its managed tenancies show that just over 45 per cent of tenant deposits are subject to a deduction at the end of the tenancy, but less than 3 per cent of those progress to a dispute. 

Allison adds: “The figures clearly underline the benefit to landlords of using a professional letting agents, as, if a tenancy is well managed – with a detailed inventory drawn up and a proper check in and check out process - there is a much smaller chance of a dispute over the deposit arising when a tenant moves out.

“In a typical month just 2.9 per cent of our deposit returns result in a dispute, while 33.5 per cent are returned in full and a further 41.5 per cent are returned after a partial deduction.

“Disputes are less likely to arise because of the thorough inventory and schedule of condition that we draw up at the start of the tenancy and the comprehensive checkout we undertake at the end. Any loss or damage to the landlord’s property that may occur during the tenancy can be easily detected and the necessary evidence provided to support a claim from the deposit. This is just one of the ways in which we minimise risk for landlords.”

For more information or advice on letting a property or holding a deposit contact your local Leaders branch or read more about our services for landlords.