At the start of a tenancy, renters are usually required to pay a security deposit of up to five or six weeks' rent, depending on the value of their monthly rental payment.
The deposit is a commitment from the tenant that they intend to treat the landlord's property properly and pay their rent on time for the duration of the contract.
When the tenancy comes to an end, the managing letting agent or landlord will carry out an inventory check-out to assess the condition of the property before the tenant moves out. If they note damage, broken or missing items which do not constitute as 'fair wear and tear', then they have the right to suggest deductions from the tenant's deposit.
As a tenant, it's important that you fully understand your obligations and what to look out for on your tenancy agreement, this can really help you to understand what your responsibilities are at the end of the tenancy. If deductions are suggested, you can either agree to these deductions if you think they're fair, or query them with your landlord with the aim of coming to an amicable resolution. If a mutual agreement can't be reached, a formal deposit dispute - overseen by one of the three government-approved tenancy deposit schemes - will have to be launched.
The organisation managing the dispute will then assess the evidence and decide whether the suggested deductions are fair or not. It's in most landlords' and renters' interests to avoid a deposit dispute, but they can sometimes be necessary as a last resort. When you're living in your rented home, accidents could happen, so it might be worth considering Tenancy Liability Insurance, which insures you in the event of any accidental damage to items that belong to your landlord in the property. By covering the cost to fix items you may have accidentally damaged, as it happens, you can minimise potential deposit disputes or deductions at the end of your tenancy.
What does the latest data show about deposit disputes?
According to mydeposits, one of the deposit protection schemes, the number of disputes between landlords and tenants in England fell by 15% in the first half of 2020, when compared to the same period last year.
In the first five months of 2020, 37% of all disputes took place in London, while 16% took place in the South East and 10% in the South West.
If tenants want to reduce their chances of entering a dispute with their landlord, it's important to know the most common reasons for disputes and the typical results of these cases.
Below, we take a closer look at the latest figures and explain how tenants can reduce the chances of deposit deductions which could lead to a dispute.
Cleaning remains top cause of deposit disputes
According to the figures from mydeposits the most common reasons for deposit disputes between May and June 2020 were:
- cleaning (26%)
- damage to property (20%)
- deposit not returned (20%)
- redecoration (17%)
- Other less common reasons for disputes were 'other' (9%), missing items (4%) and rent arrears (2%)
Regionally, cleaning was the top reason for disputes between landlords and tenants in all but three regions. Damage to property (24%) was the most common reason for disputes in London, while the deposit not being returned by the landlord was the top cause of disputes in the West Midlands (41%) and redecoration was the most common in Yorkshire and the Humber (25%). Redecoration was also a significant problem in the East of England, North East and South West, accounting for a fifth of all deposit disputes. Meanwhile, property damage was not as common in the East Midlands, East of England, South West and West Midlands, accounting for less than 20% of disputes, lower than the national average.
How much is being disputed and how much are tenants awarded?
The average amount disputed by tenants and landlords across England was £811 between January and May, a fall of just 0.1% compared to the same period last year.
The figure rose to £1,338 in London, a drop of 1.4% compared to 2019, while the average dispute amount was also over £1,000 in the South East at £1,033 - an 8% rise.
The lowest average amount disputed was £597 in the North East, the highest rise between 2019 and 2020 was recorded in the East of England at 9% (£916) and the largest fall was recorded in the North East at 9.3%. The values disputed vary by region, partly because of the difference in average rents and the subsequent deposit values taken at the start of the tenancy.
When it comes to the 'winners and losers' of disputes, tenants received 67% of the disputed deposit on a national basis, compared to 33% for landlords.
The highest average percentage awarded to tenants was in the West Midlands at 73%, meaning landlords received the lowest average percentage at 27%.
As for landlords, the highest average proportion of disputed deposits awarded between January and May 2020 was recorded in Yorkshire and the Humber at 42%. Tenants in this region, therefore, received the lowest average dispute award at just 58%.
If you're a tenant who's considering moving home it's important to consider your obligations and what you can do at the end of tenancy process to help secure your full deposit.