Adjudication Digest: When relations turn cold...

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This month’s deposit dispute case study looks at a claim for utility charges related to the use of a shared heating and air conditioning system provided in an apartment.

Reasons for deposit dispute: Shared utility charges

Amount of deposit in dispute:
 £ 900.00
Dispute initiated by:  Landlord

Award made:
Tenant  £700.00
Landlord £200.00

Under a ‘specially negotiated’ clause in the tenancy agreement, the tenant was responsible for the payment of heating and cooling charges for the apartment. The clause set out that the landlord was entitled to “…retain a portion of the deposit towards pro-rata charges incurred for the usage of heating and cooling.”

The agents explained that the bill was yet to be provided by the apartment block managing agents, this attributed to “installation metering and commissioning issues.” In the absence of a bill the agents proposed an estimated cost of £900.00.

The tenant for their part disputed the amount claimed, stating they did not use the heating and cooling system throughout the whole tenancy and proposed that £200.00 was a fair “portion” of the deposit to be retained.

The adjudicator considered that given the agents’ estimate was made in the absence of any billing information or other evidence to justify it they were unable to establish that it represented a fair sum in relation to the tenant’s likely usage of the heating and cooling systems.  The adjudicator accepted that a “portion” of the deposit should be awarded to the landlord in accordance with the terms of the tenancy agreement. However in the absence of any evidence to justify what that sum should be, the adjudicator concluded that the tenant’s offer was a reasonable ‘portion’ in all the circumstances.

So what are the key points here?

TDS considers that a specially negotiated clause in a tenancy agreement generally places an absolute obligation on the tenant.  However the precise wording of the clause needs to be carefully considered and the adjudicator is still able to judge the reasonableness of the amount claimed.  This case highlights the importance of justifying amounts sought from a deposit even when the tenant’s obligation is otherwise considered absolute.

 More information:

Read a full archive of monthly adjudication digests and dispute case studies.

Download the TDS Guide: Our approach to unfair contract terms


Posted by Mike Morgan on 23 July 2015

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