What costs can be deducted from a tenancy deposit?
Find out what you can and can't charge a tenant for, and how you withhold money from the deposit for damage cause by the tenant
Deductions can be made from the deposit to pay for the following:
Repairs due to damage
Replacing items that have been broken or removed
Any cleaning required at the end of the tenancy to return it to the same standard of cleaning as when the tenant moved in
Rent arrears
You cannot charge the tenant for:
Fair wear and tear – that’s natural deterioration over time, having considered how many people have been living in the property, the length of the tenancy and the item or area’s condition at the start
Betterment – that’s any work that would put the property back into a better condition than it was at the start of the tenancy
Costs relating to gathering evidence and submitting a claim in the event of a dispute
For more information and case studies, see our mydeposits guide: ‘Rules of claiming for deposit deductions’.
The first thing to do is discuss any damage and cost of repairs with the tenant and try to come to an agreement over how much they should contribute. If that’s possible, then you can simply either return the balance to the tenant (Insured scheme) or initiate the return of the deposit with the TDP scheme, stating the amount to be returned to each party (Custodial scheme).
If the tenant disagrees, then you need to apply to the TDP scheme’s free deposit dispute resolution service. And if the deposit is in an Insured scheme, the disputed amount must be given to the scheme, who will hold it until the dispute is settled.
It’s important to understand that, by law, the tenant is entitled to a full deposit refund unless you can prove your claim. That means you will need to provide the adjudicators with the following evidence:
That the tenant is responsible for the costs. This is where having robust and detailed check-in and check-out inventories is invaluable – see our ultimate guide to an inventory and schedule of condition.
If any damage or disrepair was recorded and discussed with the tenant during periodic inspections, this information should also be provided – ideally with photographs and evidence of any written correspondence between you and the tenant.
That the costs for repairs, cleaning, etc. are reasonable. Estimates or invoices should be provided for the required work and if you still have receipts showing how much damaged items originally cost, this will help in the adjudication.
The adjudicator’s decision on how much of the deposit can be withheld is final and money will be paid within 10 days.
See our mydeposits guide, ‘Rules of claiming for deposit deductions’, for more detailed information and advice.
If you have any questions about underinsurance or would like to discuss landlord insurance with one of our experts, please contact the Total Landlord team on0800 63 43 880 or email enquiries@totallandlordinsurance.co.uk
