If you’ve been a landlord for any length of time, you’ve probably experienced the procedure when a tenancy ends by mutual consent. Among the steps that must be taken is the return of the tenant’s deposit. This is usually a fairly straightforward process, but occasionally there may be a dispute over what exactly you need to return.
Regulations About Deposits
When you take a tenant’s deposit at the beginning of the tenancy, it must be registered with one of the three tenancy deposit schemes backed by the government. This will ensure the deposit remains secure. The recognised schemes are MyDeposits, Tenancy Deposit Scheme and Deposit Protection Service.
When the tenancy ends, you as landlord assess how much of the deposit will be returned and how much will be retained to cover any damage to the property, items missing or unpaid rent. This then needs to be agreed with the tenant, after which you have ten days to return the correct sum.
Disputes About Deposit Returns
If no agreement can be reached, you must put in writing to the tenant the amount you’re proposing to withhold and your reasons for this. The dispute can then go to the tenancy deposit scheme you’ve used for mediation. This isn’t compulsory, though, and both you and the tenant must agree to it.
Evidence that can be presented to the mediation process includes:
- a signed tenancy agreement
- a signed inventory
- a statement of the account
- signed property inspection reports
- estimates, receipts and invoices
- correspondence between you and the tenant
- date-stamped photos or videos
- statements by witnesses
The Decision About the Dispute
Once the mediators from the tenancy deposit scheme have all the evidence available, both from you and the tenant, they’ll examine it and come to an impartial decision, based on the facts and the legal requirements.
They’ll then inform both you and the tenant in writing of what their decision is. If you’ve agreed to this mediation, the decision will be final, and the deposit will be released to either you or the tenant, or both, in the proportions decided.
It’s important to note, though, that there may be strict time limits for applying for mediation. If you take too long over it, this may no longer be available.
The tenancy deposit is only one of many thorny issues involved in being a landlord, but it’s one that’s essential to get right. If you need to talk over any issues about ensuring you get all the money due to you from your property to let, you’re very welcome to give me a call.