Deposit deductions is a touchy area for tenants, landlords, and letting agents alike, because when they are made there is often a feeling of having been unfairly treated. This has been shown by the findings of a survey of 1,000 tenants conducted by Imfuna, a digital inventory company.
They found that 65% of tenants think that deductions from their deposits are taken unfairly and without reason, amounting essentially to legalised robbery. They found that tenants receive 80% of their original deposit, on average. This is a substantial improvement on the Deposit Protection Scheme findings from 2009, which showed that tenants received, on average, 70% of their original deposit.
Mandatory tenancy deposit schemes were introduced in April 2007, meaning that any deposit who has entered into an Assured Shorthold Tenancy (AST) agreement in England and Wales must be protected in a government authorised deposit protection scheme within thirty days of receiving the deposit. Any deductions to deposits have to go through a strict vetting procedure to protect the tenant and the letting agent.
According to Imfuna’s data, the most commonly made deductions are as a result of outstanding rent (70%), with cleaning costs come a very close second (69%). The next most popular reasons for deductions were damage to the structure of the house (45%), damage to furniture (39%), and damage to appliances (38%). 7% of landlords claim that they have never withheld money from a tenant’s deposit.
Commenting on the findings, Jax Kneppers, creator of Imfuna, said, “The key to reducing the number of tenants who feel they have been treated unfairly is less about the reductions themselves, and more about the manner in which they are taken.
“The inventory report has a fundamental role to play in this respect – if a transparent and robust report which combines standardised terms and corroborative data has been conducted at check in, the tenant will be far less likely to cry foul at check out.”
23% of landlords surveyed weren’t satisfied that Tenancy Deposit Schemes had been helpful in deposit recovery, although 44% said that they were. 33% said the schemes were helpful in resolving disputes, but 26% said that they were not.
Kneppers commented, “On the surface, landlords appear to be grappling with the deposit dispute process. The fact is however that it’s the current inventory system which is unhelpful and is failing hopelessly to support landlords who are entering into disputes with a scarcity of robust evidence to support their case.”
Nearly half (49%) of landlords who experience disputes try to persuade the tenant to repair damage themselves to reach resolution. 80% of landlords, 76% of letting agents, and 75% of tenants agree that photographic evidence at check-in and check-out reduces the likelihood of disputes arising.