Avoiding damage and deposit disputes

Source Property Reporter, Thursday, October 17 2013 Thorough screening pre-tenancy should minimise risk of damage but what can landlords do should the worst happen?Thankf...

Source Property Reporter, Thursday, October 17 2013 Thorough screening pre-tenancy should minimise risk of damage but what can landlords do should the worst happen?

Thankfully for the majority of buy-to-let landlords, damage to property caused by tenants is a rare event but of course it can be distressing when it does happen. Recent reports that Kelly Osbourne is embroiled in a legal dispute with her landlord over the cost of repairs highlight the risks.

Landlords can protect themselves in several ways:

Screening of potential tenants is the first line of defence. Thorough reference checks are vital to ensure - as far as possible - that tenants are reputable and responsible before keys are handed over.

Evidence of the property's state of repair is essential – both at the start and the end of the tenancy. Drawing up a comprehensive, detailed inventory prior to each new tenancy is a must if landlords are to be able to justify retaining a portion of the deposit to cover the costs of any damages.

The fact that deposits must be paid into an approved scheme should help to protect both landlord and tenant against the risk of disputes over damages and repairs.

Landlords must provide tenants at the outset with a clear understanding of what the deposit is for and conditions for its return in full. If there is any disagreement at the end of the tenancy over deposit deductions, the scheme operates a dispute resolution service. One Letting agent we spoke to said:

“This paperwork will prove invaluable for landlords in making a case for recovering repair costs from a deposit, whether it's a minor fix that's at issue or in the unlikely event of substantial damage to the property.

The deposit schemes are in place to protect tenants but if they have caused damage then the landlord is fully justified in paying to repair the damage from the deposit."

However, landlords should remember to build the costs of general wear and tear into their financials to cover future refurbishments. The good news is that the costs of repairs are tax deductible, enabling buy-to-let investors to offset the bills for putting right any damage against their income.

Speak to our lettings team to find out more on our intensive screening of potential tenants and our rigorous inventory checks and how this can benefit you as a landlord. Call Barbara, Adam, Marie or Nina on 01782 617343.