How To Avoid Deposit Deductions Being A Landlord

The Deposit Game Is A Lot Of Hassle

So, you're a landlord in the UK and you have one or a couple of properties on your hand, which you rent out. By now you should have realised what a pain in the ass the deposit procedures are.

If YOU don't handle the deposit protection at the start of the tenancy, you get a 100% success rate court claim in your inbox.

Unless you have protected the deposit within 30 days of signing the tenancy agreement AND have provided information about it and the property, as prescribed by the regulations, the tenant can go and sew you for 1 - 3 times the deposit amount. Provided the claim is true, you have no defense. The court cannot exempt you from these charges under any circumstance or regard, they can only determine how much you pay, based on the situation and intent. You also can't use some of your standard rights like Section 21 Notice.

You can read all about deposits here. 

On the other hand, the deposit represents only a small amount of insurance against minor damages and maybe a month of rent. But, it's can't actually tap into it without providing a black box for the entire tenancy period.

Very few tenants will agree to deposit deductions out right. Those who do are less likely to give you reasons for deductions in the first place. Most renters will dispute and force you go the hard way and deal with the tenancy deposit protection service you've used.

You need to do thorough move in and move out reports on the property and have them checked and signed by the tenant, so they hold strong; make photographs; collect bills and receipts and quotes; and a number of other gibberish tasks.

Only after you've provided the biblified version of the entire relationship with this tenant, you can hope for the adjudicator to resolve the case in your favour and give you enough to cover the costs of repairs, cleaning and whatever else has happened to the property.

so, if you haven't guessed already:

No, Deposit Deductions Are Not Good For You

To deduct from a tenant's deposit means there is already damage, or filth, or both plus something even more horrible. If it's already ruined, well, you don't have much of a choice. Either go to the TDP (tenancy deposit protection) or amend the acts of your now ex-tenants and give them the free pass. 

Assuming you haven't chosen the second, you now need to take quotes from services companies for the various repairs and cleaning your property needs. If you don't already have a recommended or trusted supplier, finding the right one WILL BE a daunting task.

You see, especially in London, there is a ridiculous amount of companies claiming they are good and cheap and slobbering over the cash in your hand. Just look at the Google results for a popular rental service - end of tenancy cleaning. Lots of them right ? Now go and try picking them apart to find a quality service that doesn't take the skin off your back.

This process will cost you time and effort, which I'm sure, you'd rather spend on marketing your property, so a new tenant can move in and you resume receiving profit. Remember, you're mortgage payments don't care if you're not receiving rent or not, so every week spent on fixing it up, is a week you've lost money (on top of the money you've lost fixing it).

Remember when you said landlord insurance is wasted money ? Jokes on you know.

If you have a stored amount of money, I really recommend on you paying for the service required and then worrying about collecting it back from the tenant's deposit. This way, you can at least ensure the flat is ready for the next visitors and potential tenants.

How the hell do you avoid what something you're not responsible for ?

An often neglected part of the landlord's profession is to communicate, tend to and resolve other people's problems (Which become the landlord's problem as well..). A landlord is no less a service provider than the cleaning lady, tending to your home every week.

As such, it's part of your job (you being the landlord) to tackle humans on a daily basis. Nothing can promise you success when dealing with other people, but there are things you can do to increase the likelihood of your tenants behaving properly within your house.

Be very precise and clear about what you want

If your tenants are not able to understand the contract or get confused by all the gibberish legal language, how would you expect them to follow and uphold it. You yourself should be clear and open to any information regarding the tenancy contract and the legal obligations to both tenant and landlord. Deceiving your tenants about some hidden restriction or some financial side of the lease will only make them seek revenge.

Also, people usually don't mind to do things, if you're straight out honest about it. You want the property cleaned by a professional company at the end of tenancy ? Just tell them so in the very beginning. Or, you're just fine with them doing it, as long as it's good and tidy ? Just hand them a good cleaning checklist and you're set.

Don't act like a corporate executive...even if you are

People don't like corporations, corporation staff members and corporation staff members' friends. Don't talk and act like a Q&A automated system. People have moods and feelings and expressions and random interactions. People bond and mingle and do small talk. If you talk business only, your tenants can't get to know you and wouldn't know how to interact with you. Or worse, you will make a bad snobby first impression and they will dislike you reactively.

Do try to be as welcoming and warm towards them as possible. If they manage to feel home, you're looking good on them maintaining it properly during their stay. If you can't get them to like you, or at least feel neutral about you, it'd be harder to make them do anything about the property.

Give to be given

Human interaction is all about reciprocity. If you act in a certain way with people, be it positive or negative, you more or less can expect them to act in a similar fashion. Thus, in order to gain the respect and loyalty of your tenants, you need to be respectful of them and loyal to your common endeavour. This can be applied to everything you ever do relating your property and tenants.

It can be as simple as not being a robot (read point 2.), or sometimes as straining as upholding proper repair and maintenance schedules. Sometimes, you will need to be a bit lenient with your renters. Let's be frank, you're likely not experiencing any negative results from them paying rent three days late. On the other hand, they are probably under heavy pressure in their personal finance and the last thing they need is you banging on the door, or spamming their inbox.

Be Fair

Really, if you're going down the greedy path, just close this article. There is nothing here to help you. As far as I'm concerned, greedy landlords deserve at least equally greedy tenants.

On the other hand, I'm all about fairness and giving credit where it's due. You're not really going to win that much profit, if you twist your tenants like a wet sponge. What you'll win is a handful of spiteful renters, ready to screw you over the first chance they get. Whether it's moving out with two payments due, leaving a bucket load of damage the deposit will barely cover, or even steal from you, getting on the bad side of your tenants is never a good idea.

Just remember you can sustain far more damage than they will. At the end, it's your property and without it in it's pristine state, you can't make a single pound.

Conclusion

As I already said, there is no way to make sure people do right by us. However, making sure we do right by them is certainly going to tip the scale in our favour. Tenants are not evil, they haven't come to your property just to wreck the hell out of it and run before judgement comes knocking (okay, okay most of them). What they want is a nice and cosy place they can call home. If you make sure it (and you) welcomes them as one, they will often take a liking and care for it, as if they indeed own it. Thus, you'd be far less likely to encounter problems at the end of tenancy. And even if you do, they'd be far more easier to resolve in between you and them.

Until next time,

Audrey Wright.