Posts with tag: tenancy deposits

Redecoration a Growing Problem in Tenancy Deposit Disputes

Published On: November 8, 2016 at 11:40 am

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Redecoration is a growing problem in tenancy deposit disputes, according to the latest annual study from the Tenancy Deposit Scheme (TDS).

Redecoration issues now account for 32% of all disputes, ahead of rent arrears at 19%, but behind cleaning at 57%, and damage to fixtures and fittings at 51%.

Imfuna, the developer and provider of digital inventory app Imfuna Let, claims that interior décor is a growing concern for those in the lettings sector, as it causes the most confusion amongst landlords, letting agents and tenants.

The firm believes that the fundamental issue driving redecoration issues is a difference in opinion between landlords/letting agents and tenants. Landlords and agents frequently assume that tenants will

Redecoration a Growing Problem in Tenancy Deposit Disputes

Redecoration a Growing Problem in Tenancy Deposit Disputes

repaint a property at their own cost following a three or four-year tenancy, although they are not obliged to do so.

And while a few light scuffs after a six-month tenancy can definitely be classed as fair wear and tear, heavy markings, scrapes and several screw holes during the same length of time are certainly tenant damage.

The firm states that the longer the tenancy, the more allowance must be made for fair wear and tear.

The Founder and CEO of Imfuna, Jax Kneppers, explains: “Landlords and agents should recognise that there will be inevitable wear and tear to a property’s décor during a tenancy. However, clearly if there is damage to anything within the property, including damage to walls and ceilings, this is chargeable to the tenant.

“A thorough and professional inventory will capture the condition and décor at the start and end of the tenancy, and this should be used as evidence in the event of a dispute. Clear photographs and commentary detailing damage to anything within the property are vital if a dispute is to be resolved.”

He continues: “When looking specifically at walls and ceilings, the quality of emulsion paint will have an impact on how well walls will wear. For example, a new build will generally only be painted with a thin coat, which will wear much faster. A landlord may choose to cut corners and water down emulsion to make it go further; a landlord may also choose to use a good quality paint for the rented property, in the knowledge that the interior décor will be slower to show wear and tear.

“If a tenant has redecorated without prior consent of the landlord or letting agent in a non-neutral colour, then the cost of repainting can be charged to the tenant, as long as this is stipulated within the terms of the lease. The same is applicable if a tenant has allowed a sofa or other piece of furniture to continually rub against the wall, causing chipping and heavy rub lines.

“Other items not classed as wear and tear are nail holes, screw holes, blue tack marks, Sellotape, and additional cabling fitted either with cable clips or from a drilled hole through the wall. Grease marks and excessively grubby areas are not wear and tear.”

Kneppers adds: “When it comes to wallpaper, some discolouration will happen over time, and glued seams will slowly become loose and need re-fixing occasionally. Cheap wallpaper will tear and rub more easily than expensive wallpaper. With daily use, a few minor nicks to the surface of the paper are inevitable, as are a few light scuffs, especially in a heavy-use area such as halls and stairways. Tears to seams or any other part of the wallpaper are classed as damage, as are heavy rubs, which remove areas of paper.

“To clear up any confusion between landlords, agents and tenants, the property’s condition should be fully recorded through a comprehensive inventory at the start of any new tenancy, supported by a thorough check-in and check-out report.”

Landlords, have you ever had redecoration issues with your tenants? Read this advice to ensure that both parties understand their responsibilities.

Work has to be done to reduce tenancy deposit disputes

Published On: October 21, 2016 at 8:57 am

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The Association of Independent Inventory Clerks believe that much more should be done in order to reduce the number of tenancy deposit disputes.

This comes despite the recent improvements recorded in released in figures released earlier this year.

Low volume

Despite their calls for improvements to be made, the industry body acknowledged that the volume of disputes is low. There were only 28,100 disputes requiring resolution by the three government-recognised protection schemes in the year to March 2016.

These figures came from the Department for Communities and Local Government, which revealed that this number made up just 0.82% of total deposits. However, the Association of Independent Inventory Clerks thinks many problems still need addressing.

Data released from the Tenancy Deposit Scheme shows that cleaning disputes featured in 57% of all tenancy deposit claims that it deals with. Damage to either fixtures and fittings were mentioned in 51% of all cases.

Work has to be done to reduce tenancy deposit disputes

Work has to be done to reduce tenancy deposit disputes

Problems

Patricia Barber, chair of the Association of Independent Inventory Clerks, noted: ‘The issues of cleaning-or a lack of it-and damage in rental properties come up time and time again at the end of tenancies and it’s clear that these problems are responsible for a high number deposit disputes that do occur.’[1]

For a number of years, fair wear and tear has been a grey area for both landlords and letting agents, such is the varying nature from case to case. This high level of ambiguity leads to a high number of disputes at the conclusion of an agreement.

As such, the importance of an inventory is of paramount. Alongside being used in evidence in a dispute, an inventory as part of the check in and check out process will greatly help if an issue arises.

Barber continued by saying: ‘If landlords make sure tenants are issued with a detailed and thorough inventory at the beginning of the tenancy, then it’s easier for all parties to determine the condition of the property when the contract finishes. This in turn makes it easier for landlords and tenants to agree on any required deposit deductions which could lead to fewer formal deposit disputes.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/10/more-work-needed-to-reduce-tenancy-deposit-disputes

Compensation Charges Can Lead to Deposit Disputes, Warns Imfuna Let

Published On: October 3, 2016 at 10:34 am

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Compensation charges at the end of a tenancy can lead to deposit disputes, especially when there is little or no evidence to support the charges, warns Imfuna Let.

The firm reminds landlords and letting agents that they do not charge for betterment or fair wear and tear when calculating compensation costs. It explains that if an item was old at check-in and has suffered some additional damage over a two-year tenancy, the law does not allow a landlord or agent to simply replace the item with a new one. However, some compensation towards the item is allowable.

Compensation Charges Can Lead to Deposit Disputes, Warns Imfuna Let

Compensation Charges Can Lead to Deposit Disputes, Warns Imfuna Let

The Founder and CEO of Imfuna Let, Jax Kneppers, goes into more detail: “Landlords and agents who are calculating the cost for compensation charges against a tenant should ensure that the costs are reasonable and fair. They should also have a working knowledge of the accepted principles of compensation and explain to their tenants how they have worked out the deductions. If landlords and agents can prove how they arrived at the proposed deductions from their tenants’ deposits, all parties involved will be happier to accept the decisions.

“In order to work out accurate compensation charges, landlords and agents need the original cost of an item, age and condition at the time of check-in, length of tenancy, average life expectancy of the item, and any extenuating circumstances. Landlords and agents should be able to provide written evidence of the original cost and age of the item for any compensation claim.

“For example, if a tenant damages vinyl or laminate flooring with drag marks, deep scratches or scrapes, burn marks and stains, these are considered to be chargeable issues. However, a small number of surface scratches, nicks and minor indentations are considered to be consistent with fair wear and tear, depending on the length of tenancy and original condition.”

He explains: “The final compensation cost will depend on a number of factors, such as if pets and children were in the property, any previous wear and tear, quality of the items, etc. Landlords and agents need to ensure they have brought together all the evidence to reach a safe conclusion.

“This evidence will require detailed descriptions and photographs taken at the start and the end of the tenancy as part of an inventory. If a professional inventory has been supplied for the property, then its condition will have been fully recorded at the start and the end of the tenancy. This is the bulletproof evidence that landlords need to support a claim for compensation charges.”

If you need any assistance in compiling a professional inventory, our guide will help you create a comprehensive document and avoid deposit disputes: /guide-compiling-good-inventory/

The Director of Balgores Property Group, Howard Lester, also comments on the importance of correct compensation charges: “Normal wear and tear is a fact of life with rental properties. However, there is a distinct difference between fair wear and tear and actual damage. For example, carpet tread will flatten over time where there has been foot traffic, but cigarette burns, stains or soiling will require a charge.

“Our deposit clerk spends many hours a day explaining the difference in these issues to both landlords and tenants, and the vast majority of issues that end up being sent off for arbitration are from one or other refusing to accept these facts. We find that by preparing a detailed inventory at the beginning, together with the property inspections and final check-out, we are normally able to accurately predict the outcome of over 90% of disputes before they reach arbitration. In the event of there being no inventory, we always advise the landlord that they will be very unlikely to win any compensation.”

Deposit disputes are at highest level since 2007

Published On: September 28, 2016 at 10:38 am

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Concerning new figures released from the Tenancy Deposit Scheme reveal that tenant deposit disputes are presently at their highest level since 2007.

Data from the report reveals that at the end of March 2016, there were almost 173,000 tenancy deposit disputes in the nine years since the legislation was first introduced.

Rising

In 2015-16, the three tenancy deposit schemes in England and Wales resolved 28,100, which in itself was the highest ever annual amount recorded. This represents a miniscule total of just 0.82% of all deposits protected in March 2016, a figure staying fairly constant for the last six years.

Cleaning amounted for the majority of reasons for disputes, showing that a growing number of buy-to-let landlords are facing increasingly dirty properties at the conclusion of agreements.

In fact, cleaning was mentioned in 57% of dispute claims handled by the TDS. Next came damage to fixtures and fittings at 51%, redecoration at 32% and rent arrears at 19%. Gardening issues made up 16% of tenancy deposit disputes.

Deposit disputes are at highest level since 2007

Deposit disputes are at highest level since 2007

Average fees

Further figures from the report indicate that the average disputed deposit handled by the Tenancy Deposit Scheme in 2015-16 was £863.40.

Of this money, 45.5% was returned to tenants and 54.5% to landlords and/or agents.

Landlords are reminded of their obligations regarding tenancy deposits. Any deposits taken on assured shorthold tenancies in England and Wales must be protected within 30 days in one of the three-Government approved schemes.

These insurance based or custodial deposit protection schemes are operated by:

  • MyDeposits
  • Deposit Protection Service (DPS)
  • Tenancy Deposit Scheme (TDS)

There are separate tenancy deposit protection schemes in Scotland and Northern Ireland.

London has almost £2bn in ‘useless’ deposits

Published On: September 27, 2016 at 10:36 am

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New research into tenancy deposits indicates that the 960,000 rental properties in London generated in excess of an eye-watering £1.9bn in deposits to landlord and agents.

The investigation from deposit-free renting solution Dlighted suggests that 97% of these will be returned at the conclusion of the tenancy agreement.

Rental Bills

These figures are obtained by taking the number of privately rented properties in the capital’s 33 boroughs. These are then multiplied by the average monthly cost of renting a property in the region-the typical cost of a deposit.

However, many landlords and letting agents asking for deposits are looking for these equivalent to six weeks rent. This means that the overall cost of the capital rental deposits could hit £3bn.

In Westminster, almost half of residents in the region privately rent. This area is worst hit, with a deposit bill of over £250m.

Kensington and Chelsea comes next, with 33% of residents renting in the borough paying a combined £136m.

Other boroughs with a high rental bill include Camden (£124m), Lambeth (£111m) and Wandsworth (£100m).

The ten London boroughs with the greatest overall estimated value of tenancy deposits were found to be:

  1. Westminster – £250m (43% of households privately rented)
    2.   Kensington and Chelsea  – £136m (33%)
    3.   Camden – £124m (31%)
    4.   Lambeth – £111m (34%)
    5.   Wandsworth – £100m (31%)
    6.    Barnet – £95m (31%)
    7.    Ealing – £90m (35%)
    8.    Brent – £82m (35%)
    9.   Tower Hamlets – £74m (32%)
    10.  Newham – £73m (43%)

[1]

London has almost £2bn in 'useless' deposits

London has almost £2bn in ‘useless’ deposits

Better spent

Long-time opponent of tenancy deposits, Ajay Jagota, of Dlighted, noted: ‘the irony is, it’s unlikely these deposits will even solve the problems they’re supposed to. Statistics show that 97% of deposits are handed back untouched at the end of their tenancies. And whether you’re renting out a property in Kensington or in Brent, it’s either unlikely you’ll go through the process of using a deposit to pay for minor damage, or that the deposit will cover the costs of major damage.’[1]

‘In the meantime that money isn’t just gathering dust, its gaining interest in the bank accounts of people it doesn’t legally belong to. The industry needs to take a good hard look at itself and consider moving to an insurance-based system like every other industry on Earth. It would mean a better deal for landlords, a better deal for renters and more money in our economy,’ he added.[1]

[1] http://www.propertyreporter.co.uk/landlords/londons-useless-2bn-rental-deposits.html

Scheme looking to reunite tenants with their deposits

Published On: September 1, 2016 at 10:13 am

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A tenancy deposit scheme north of the border is looking for Scottish tenants who have forgotten to claim back their deposits.

SafeDeposits Scotland has vowed to return substantial amounts of cash to their rightful owners.

Deposit schemes

Tenancy deposit schemes were brought in during July 2012. Since then, in excess of 156,000 deposits have been repaid by SafeDeposits Scotland. Despite millions of pounds being safely returned to tenants at the conclusion of their agreement, a small proportion of renters do not claim back money owned.

A large percentage of this proportion are students. With the start of the academic year just around the corner, September is generally the busiest month for deposits being paid both in and out.

Data from the firm suggests that over 2,000 tenants have ended their leases without claiming back money owed to them. This in total adds up to more than £500,000. Should deposits not be claimed back after six years, any monies will go to the Crown.

Scheme looking to reunite tenants with their deposits

Scheme looking to reunite tenants with their deposits

Attempts

The finance team at SafeDeposits Scotland attempt to reunite tenants with their deposit money via a range of different methods; sending letters, text messages, emails and phone calls.

A number of these methods prove successful, however some cases prove more complex. Monies cannot be paid straight into bank accounts, as this information is not disclosed to any of the three approved tenancy deposit schemes.

Jennifer Paice, Chief Executive of SafeDeposits Scotland, said, ‘it’s extremely surprising that people can leave their rented property and forget to ask for their deposit back. The vast majority of tenants remember to claim their money but there’s a small minority who don’t. Our finance team do a great job in tracking most of them down but there are a significant number they can’t get hold of. We don’t think it’s right that people lose out on what’s due to them so we do everything we can to try and get people the money they are owed.’[1]

[1] http://www.propertyreporter.co.uk/finance/scheme-aims-to-return-500000-in-unclaimed-rental-deposits.html