Before I personally started working in the lettings industry, I did rent a property as a tenant myself via a letting agent. When I checked into the property, I signed an Inventory and Schedule of Condition and my deposit was registered with a tenancy deposit scheme. I lived in the property for a total of 6 months.
Like most people I had heard about the stigma surrounding end of tenancy checkouts and handing back over rental properties to either private landlords or letting agents, believing they would try everything they could to keep as much of my deposit back and ‘rip’ me off.
My experience in my first checkout was thankfully a fair one – I handed back the property in good condition to the letting agent and we were able come to an agreement with regards to the amount of deposit that was returned to me. However, not all checkouts run this smoothly.
How does it work?
The UK Government made it mandatory that any Assured Shorthold Tenancy (AST) commencing from 6th of April 2007 with a deposit must be registered with one of three Government approved tenancy deposit schemes – the Deposit Protection Service (DPS), MyDeposits and the Tenancy Deposit Scheme (TDS). £0 This would allow either the tenant or the landlord to raise any disputes to the relevant protecting body if an agreement can’t be made at the end of the tenancy regarding any proposed deposit deductions. A landlord or agent not registering a deposit when they should are breaking the law and will face serious financial and contractual consequences. £0
As stated in the Government ‘How To Rent Guide’, the tenant should ensure they have an inventory (or check in report) in place at the start of the tenancy, as this document will confirm what condition the property was in when the tenant moved in, and without one there is no formal proof of this. The property can also be inspected throughout the duration of the tenancy, for example letting agents who inspect a property during an active tenancy can make a record of any tenant breaches or unauthorised changes to the property.
When a end of tenancy checkout inspection is eventually carried out, the landlord or letting agent will use this inventory and any property visits carried out during the tenancy to determine if any works are required in order to return the property back to the landlord that do not fall under ‘fair wear and tear’. These works could include cleaning, redecorating or repairing any damage caused by the tenant during the tenancy.
As also stated in the How To Rent Guide, tenants should try to be present at the checkout appointment, which is something we at Kingswood Residential Investment Management also believe in – it is our company policy to invite tenants to the checkout appointment, with the aim of being able to discuss and fairly agree any proposed works which may be required at the tenants responsibility whilst both of us are at the property. £0
According to the TDS annual review, for the period 2016-2017 there was a total of 13,592 individual disputes between landlords and tenants on their insured scheme alone, so why do so many tenancies end in dispute?
Within their annual report, they recorded the reasons that deposits were disputed:
As previously stated, since our trading outset in February 2016 through until August 2018, we have successfully ceased 190 tenancies without any dispute from either the tenant or landlord. We believe the reason for this is down to our procedures, which are as follows:
1. New tenants will sign a tenancy agreement at the start of the tenancy, for example an Assured Shorthold Tenancy. Within this tenancy agreement will £0 be a list of Tenant Obligations, for example their obligations will include not to cause any damage to the property.
2. We prepare a detailed Inventory and Schedule Of Condition at the start of the tenancy which is signed by the tenants. Our inventories include a combination of both detailed text descriptions and visual photography. A thorough inventory is essential.
3. We allow the new tenant 7 days from the commencement date of the tenancy to record any amendments to the inventory to us in writing, therefore giving them a fair chance to check over the property to notify us of any genuine discrepancies.
4. If we fully manage the property, we carry out mid-term property inspections throughout the duration of the tenancy and make written records of these visits.
5. Once a tenant serves notice to end their tenancy, we book in an end of tenancy checkout appointment with them and invite them to be present.
6. We offer our tenants our advice and guidance when they are preparing to return the property back to the landlord.
7. At the checkout appointment, we will use the original detailed inventory which the tenants signed at the start the tenancy to cross reference the condition and contents of the property in its current condition compared to what condition it was in at the start, so we can determine if any works are required at the tenants responsibility.
8. Excluding ‘Fair wear and tear’, if the tenant has not maintained their obligations as stated in the tenancy agreement and vacation instructions, any works required to restore the property back to its original condition such as cleaning or gardening would be agreed in writing with the tenant at the checkout appointment (sometimes subject to the landlords further inspection first). If any works are required at the expense of the tenants deposit, we will not quote any specific costings to them initially until we have instructed any contractors to provide us with the cost first, so we can then advise the tenant.
9. Once the checkout has been completed, we would send both the landlord and tenant a written checkout report so there is transparency on both sides.
10. If no works are required by the tenant, we would release the full deposit back to the tenants once we have approval from the landlord. If any works are required at the cost of the tenant, following their written agreement at the checkout appointment we would instruct our contractors to carry out any necessary works on their behalf and then advise them of the costs. Once we have approval from both the tenant and the landlord, we would release the remaining proportion of the deposit back to the tenants, which we aim to do promptly.
These may appear to be obvious steps but in our experience often aren’t carried out by other agents or landlords, however are all important to achieve a successful outcome.
We consistently follow this procedure with every managed tenancy we cease so it is no coincidence that we received no formal disputes for 2 and xc2xbd years, which is a record we are proud of and is not as common elsewhere.
In August 2018, we had our first TDS dispute, which was raised by the tenant in this particular case. We invited the tenant to attend to checkout appointment as we normally do, which was declined and the tenant decided to post the keys to our office instead. Once we had completed the checkout, we found there were works required which fell under the tenants responsibility, which included:
xc2xb7 £0 £0 £0 £0 £0 £0 £0 £0 Cleaning throughout the property
xc2xb7 £0 £0 £0 £0 £0 £0 £0 £0 Several items that belonged to the tenant had been left behind and required removing.
xc2xb7 £0 £0 £0 £0 £0 £0 £0 £0 The garden was left in very poor condition and severely overgrown, and required lots of work to restore it back to its original condition.
The tenant had lived in the property for a number of years, therefore some of its condition was accepted as fair wear and tear, such as the decor condition.
Once the checkout was completed, we issued the checkout report to the tenant and advised them that we would obtain some specific costs for any works required that they would be liable for. Once we had all the costs, we then proposed these to the tenant within the required time frame and awaited their response.
The tenant then decided to contact the TDS scheme directly to raise a dispute, without discussing with us first (which should be done). Out of the £3595 deposit, the tenant was only willing to agree to a £3200 deduction to cover all works, which the landlord was not willing to accept considering the £3395 difference! The TDS then asked us to present the landlords case to them on their behalf, which includes reasoning and evidence as to why the landlord was claiming this amount. We provided the TDS with numerous documents including the tenancy agreement, initial inventory, checkout report, mid-term inspection reports, 50 end of tenancy condition photos (all labelled up) and quotes/invoices for the works required at the tenants expense.
A TDS adjudicator then reviewed everything we submitted and awarded the case in the landlords favour resulting in all the proposed deductions being awarded to him, due to the procedure we had followed and the evidence we submitted. The TDS also commented that we did work in the best interest of the tenant whilst instructing works on their behalf, for example, by obtaining two quotes for some of the work to minimise costs, which were submitted to the TDS too. Full, thorough tenancy documentation is essential in a dispute.
We at Kingswood Residential Investment Management firmly believe that if both parties are provided with the right advice and expertise, tenants are treated fairly, and a thorough check in and checkout procedure likes ours are followed then the risk of a end of tenancy deposit dispute is significantly reduced.
If you require any advice regarding checkouts or how to avoid deposit disputes, then please do not hesitate to contact a member of our team to discuss further.
Christopher Williams MARLA
0115 7043163 / 01623 277115