Deposit Disputes
How deposit disputes arise, how to prevent them and how to use the adjudication process.
How deposit disputes arise
Most deposit disputes arise because the landlord and tenant disagree about the condition of the property at the end of the tenancy. The landlord claims deductions for damage; the tenant says the damage is fair wear and tear or was pre-existing.
The best way to prevent deposit disputes is a detailed move-in inventory with photographs, signed by the tenant. Without a signed inventory, it is very difficult to prove the condition of the property at the start of the tenancy.
A professional inventory clerk costs £100–£200 but can save thousands in a deposit dispute. For furnished properties or high-value lets, it is almost always worth the cost.
What you can deduct
You can deduct from the deposit for: damage beyond fair wear and tear, unpaid rent, cleaning costs (if the property is left in a worse condition than at the start), and costs of replacing items that are missing or damaged beyond repair.
You cannot deduct for: fair wear and tear, damage that was pre-existing at the start of the tenancy, or costs that are your responsibility as landlord (such as structural repairs).
- Damage beyond fair wear and tear: yes
- Unpaid rent: yes
- Cleaning (if property left dirty): yes
- Missing items: yes (replacement cost, not original cost)
- Fair wear and tear: no
- Pre-existing damage: no
- Landlord's repair obligations: no
The adjudication process
If the tenant disputes your deductions, you can use the deposit scheme's free adjudication service. The adjudicator will review the evidence from both parties and make a binding decision.
To succeed in adjudication, you need: a signed move-in inventory, photographs of the condition at the start and end of the tenancy, contractor quotes or invoices for the claimed costs, and evidence that the costs are reasonable.
Do not withhold the deposit without clear evidence. If you cannot prove your deductions, the adjudicator will award the full deposit to the tenant. Unjustified deductions can also result in a court order to repay up to three times the deposit amount.