#AskTDS: “How do I protect against damage/negligence from a tenant?”

AskTDS_31.01.2020

When it comes to letting out a property, landlords are obviously concerned with how to protect their investment. Although everyone has heard horror stories about tenants trashing houses, stealing furniture and disappearing into the night leaving months of rent unpaid, the reality is that most tenancies are successful and without issue, and less than 1% of tenancies end in dispute. However, there are a few best practices landlords can use to protect themselves.

How to protect against potential damage/negligence

As we explained in a previous ‘Ask TDS’ post, deposit protection services are designed to protect the tenant’s deposit, and the landlord’s investment. The starting point for this protection lies in the tenancy agreement. Ensure that your expectations and the tenant’s responsibilities are clearly outlined in the tenancy agreement as this will be the cornerstone of any argument you have regarding deposits and compensation.

While you cannot dictate lifestyle in your tenancy agreement (such as necessarily banning activities such as parties), you can require the tenant to maintain the property in the same condition as at the start of the tenancy (wear and tear excepted) and to repair any damage made during the tenancy. The best policy to protect your property is to encourage open communication with your tenants throughout the tenancy, and having a very thorough check-in/out and inventory report.

How to justify your claim against a tenant’s deposit

The burden of proof will always lie with the landlord; the money belongs to the tenant and is held by the landlord or the letting agent against the tenant’s obligations under the tenancy agreement. The starting point is therefore to show that the tenant had a contractual obligation, and that they breached that obligation. For example, there should be a clause which states that the tenant should maintain the condition of the property, supported with a check-in/check-out report showing that the condition deteriorated beyond wear and tear.

Remember, most deposit deductions are not disputed by the tenant, but if dispute resolution is your only option, then ensure that you have ample evidence to support your claim. Another aspect to consider is the fairness of the claim itself. Our golden standard for alternative dispute resolution is that the claims be:

  • Reasonable – the extent of your claim should be reasonable. This means not claiming for an entire new kitchen for one broken cupboard door, or not claiming for an entire carpet because of one small stain.
  • Reasonable – the amount of money that you are claiming should be reasonable for that item. This means that asking for £5,000 to clean a carpet would be unreasonable. Essentially the amount should reflect an accurate cost.
  • Reasoned – your claim must be reasoned. This means providing accurate evidence and a clear argument that will allow the adjudicator to clearly see that damage/negligence has occurred and the value of repairing/replacing.

The onus of proof lies with the landlord, as they must prove that:

  • They have suffered a loss; and
  • This was caused by the tenant or someone they were responsible for; and
  • The tenancy agreement permits this loss to be recovered from the tenant’s deposit; and
  • They have evidence that allows the amount of loss to be worked out in monetary terms (‘quantified’ in legal parlance)

Landlords should also be aware that adjudicators will not allow ‘betterment’ meaning that a claim may be rejected, or the amount adjusted, if they feel that the award requested would put the landlord in a better position than they would have been in, had the damage/negligence not occurred.

When should I start to gather evidence?

Being prepared from before the start of the tenancy will put you in good stead with future disputes, and not just for adjudication purposes. Most disputes can be resolved by the parties themselves, so having clear information about the condition of the property at the start and end of the tenancy, and sharing that information with the tenant(s), will go a long way to getting the tenant’s agreement and avoiding the disputes process.

Fostering a good relationship is priceless when it comes to protecting your investment. TDS strongly believes that communication is the key to successful tenancies, however having a carefully crafted tenancy agreement is also key. You can find more useful articles for landlords in our blog, such as our policy briefing on the latest right to rent legislation, and best practices for utility bills.

About the author:

Debbie joined TDS in July 2017 and is now Head of Sales and Marketing with an extensive background in the property industry with over 18 years’ experience in residential lettings, she is ideally placed to guide customers about the services of the Tenancy Deposit Scheme.

About TDS

Tenancy Deposit Scheme (TDS) is a Government-approved scheme for the protection of tenancy deposits; TDS offers both Insured and Custodial protection and also provides fair adjudication for disputes that arise over the tenancy deposits that we protect.

We provide invaluable training in tenancy deposit protection and disputes for agents and landlords through the TDS Academy as well as joining with MOL to provide the Technical Award in Residential Tenancy Deposits.

TDS Insured Scheme: where a TDS member can hold the tenancy deposits as stakeholder during the term of the tenancy.

TDS Custodial Scheme: where TDS hold the deposit for the duration of the tenancy.

TDS Academy: TDS provides property professionals with invaluable training in tenancy deposit protection and tenancy deposit disputes.

TDS Northern Ireland: TDS is Northern Ireland’s leading and only not for profit tenancy deposit protection scheme.

TDS can only comment on the process for our scheme, other deposit protection schemes may have a different process/require different steps. Content is correct at the time of writing.

These views are those of the author alone and do not necessarily reflect the view of TDS, its officers and employees.