How to avoid disputes at the end of a tenancy – part 2
When it’s not handled properly the end of a tenancy can lead to disputes. So how can landlords and tenants avoid a dispute?
For some people, a reaction to a different viewpoint can mean an immediate argument.
The end of the tenancy is the time when the landlord and tenant (A.K.A owner and resident) could take a stand because they strongly believe in their own viewpoint – particularly when this viewpoint affects the return of the deposit. The usual reason being that the owner wanting to take deductions and the resident not agreeing that the deductions are fair.
That’s when your agent needs to make sure that both parties come out with a win-win. It is interesting to note that the Tenancy Deposit Scheme ( TDS) have reported that 75% of disputes were raised by tenants, and just 8% by landlords. Getting back the deposit at the end of the tenancy is the main driver.
In the first part of this series, we looked at the issues that could arise at the end of the tenancy regarding gardens. In this part I will be looking at more general elements and how best to deal with them.
Tip 1: getting your ducks in a row
Most disagreements start with misunderstandings. Therefore it is of paramount importance that you start the tenancy off correctly. That means a tenancy agreement that has clear and fair clauses which both parties must adhere to. Since we are talking about the end of the tenancy, the clauses that deal with the deposit must include every eventuality that would lead to a deduction. A recent ‘free’ download of an AST that I obtained from a Google search mentioned nothing about rent arrears. The worst part I found was that there was no mention of a claim on the deposit if damage had occurred, or who the deposit would go back to if there were two residents. Anyone using that free download would not have a leg to stand on if that dispute went to arbitration!
The second most important document is the inventory – also known as the condition of the property. I have come across people that think this document is only needed when you have a furnished property. I have also had to show new landlords with an inventory which mentions there is a living room with a new carpet, but doesn’t tell you the condition of the walls or whether there are windows or doors, would not protect their interest. It also didn’t have any photos!
Without a detailed description of the property, particularly the cleanliness and decoration with date-stamped photos (taken 2- 3 days before the start of the tenancy) there really is no point in beginning discussions. Even if the property has been left dirty, unless you can prove the condition of the property at the start of the tenancy, you have little hope of claiming any money from the deposit if your outgoing resident disagrees with you.
Tip 2: cleaning
We have found most disputes at the end of the tenancy are around cleaning. So not surprisingly we agreed with the data that the TDS found: that cleaning caused 49% of disputes in England and Wales.
After 18 years of business I must admit I get a bit jaded when I hear that ‘the property is cleaner now than when I moved in’. I do, however, believe cleaning in some cases can be very subjective- one person’s clean is another person’s dirty.
The only way we can show both parties the difference in condition is by taking photos (again date-stamped). These will compare the ingoing inventory photos with the outgoing ones.
When it is clear that the tenancy started with a clean oven and at the end it has quite a bit of grease and carbon, it is very easy to show that the oven needs a clean and the cost will come out of the deposit.
For many years we have offered outgoing residents an end of tenancy clean service with one of our trusted contractors. Happy to report when this option has been taken up there is no problem on cleanliness.
Tip 3: damage to the property
When we carry out a checkout, we will go through the ingoing inventory line by line. Any discrepancies, for example iron marks on a carpet, will be highlighted. Then we have to work out what is due back because a landlord cannot expect new for old – legal terms: they cannot achieve betterment. We must calculate the age of the carpet against the expected life of the carpet and work out the dilapidation. The reason we do this is in preparation for if the claim goes to arbitration. Obviously if the carpet has been trashed (very very rare) a different conversation takes place!
Tip 4: rent arrears
The TDS have data to show that only 15% of disputes at the end of the tenancy are caused by rent payment issues.
The one thing that you need in the tenancy agreement is to be clear on how the last month’s rent is to be paid as some outgoing residents feel the deposit can be used to pay the last months rent.
How do you make sure there is no dispute?
Owners (landlords):
- Have a professionally drawn up inventory- ideally by a third party. This will show in words and pictures the condition of the property at the start of the tenancy.
- Have a tenancy agreement that is not a freebie download from the web, but one that has been drawn up by a professional who understands the law.
Residents (tenants):
- Once you have that inventory, it is so important to go through that line-by-line. This gives you the chance to query anything that will be judged against at the end of the tenancy. At the end of the tenancy, you will, as per the tenancy agreement you sign, be expected to hand back the property in the same condition – less normal wear and tear.
- One factor that has helped us reduce the number of queries at the end of the tenancy is to make sure a professional clean has taken place. This means using a contractor that uses the correct equipment and understands what is meant by an ‘end of tenancy clean’.
