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What Can a Landlord Claim From a Tenancy Deposit?
When renting a property, tenants are usually required to pay a tenancy deposit at the start of the tenancy. This deposit acts as financial protection for the landlord if the tenant breaches the tenancy agreement.
However, many tenants and landlords are unsure what a landlord can legally deduct from a tenancy deposit at the end of the tenancy. Deposits are not a general payment for repairs or upgrades; deductions must be reasonable, proportionate and supported by evidence.
In this guide, we explain what landlords can claim from a tenancy deposit, what they cannot claim, and how tenancy deposit disputes are resolved.
What Is a Tenancy Deposit?
A tenancy deposit is a sum of money paid by the tenant at the beginning of a tenancy to cover potential losses incurred by the landlord.
For most Assured Shorthold Tenancies (ASTs) in England, the deposit must be protected in a government-approved Tenancy Deposit Protection (TDP) scheme within 30 days of receipt.
At the end of the tenancy, the deposit should be returned to the tenant unless the landlord can demonstrate a legitimate reason for making deductions.
What Can a Landlord Deduct From a Tenancy Deposit?
Landlords can only deduct money from a tenancy deposit if the tenant has breached the tenancy agreement or caused financial loss.
Common legitimate deductions include the following.
1. Unpaid Rent
One of the most common deductions from a tenancy deposit is rent arrears.
If a tenant leaves the property owing rent, the landlord can deduct the outstanding amount from the deposit. However, the landlord cannot claim more than the actual amount owed.
2. Damage to the Property
Landlords may claim for damage caused by the tenant beyond normal wear and tear.
Examples may include:
- Broken doors or windows
- Holes in walls
- Damaged appliances provided with the property
- Stained or burned carpets
Importantly, landlords cannot charge tenants for normal deterioration caused by everyday use, often referred to as fair wear and tear.
Factors commonly considered include:
- Length of the tenancy
- Age and condition of the items at the start of the tenancy
- Number of occupants
3. Cleaning Costs
If the property is not returned in a similar level of cleanliness as at the start of the tenancy, landlords may deduct reasonable cleaning costs.
Examples include:
- Professional cleaning where the property was left excessively dirty
- Removing rubbish or abandoned belongings
- Cleaning heavily stained carpets
However, landlords cannot usually charge for professional cleaning if the property was not professionally cleaned before the tenancy began, unless the tenancy agreement clearly permits this.
4. Missing Items
If furniture, fixtures or other items listed in the inventory are missing at the end of the tenancy, landlords may deduct the cost of replacing them.
Examples include:
- Missing furniture
- Missing keys
- Lost appliances provided by the landlord
5. Unpaid Bills
If the tenancy agreement requires the tenant to pay certain bills, the landlord may claim for outstanding utility bills or council tax where the landlord becomes liable due to non-payment.
What Landlords Cannot Deduct From a Tenancy Deposit
Landlords cannot use the tenancy deposit for costs that are not caused by the tenant.
Examples of deductions that are generally not permitted include:
- General property maintenance
- Improvements or upgrades to the property
- Replacing old items with brand-new ones without accounting for age and condition
- Damage caused by previous tenants
- Fair wear and tear
For example, replacing a 10-year-old carpet with a brand-new carpet and charging the tenant the full replacement cost would usually be considered unreasonable “betterment”.
How Are Tenancy Deposit Disputes Resolved?
If tenants disagree with deductions, disputes can often be resolved through the Tenancy Deposit Protection scheme in which the deposit is registered.
All government-approved schemes provide free Alternative Dispute Resolution (ADR) services.
The decision will typically be based on evidence such as:
- The tenancy agreement
- Check-in and check-out inventory reports
- Photographs of the property
- Receipts or repair quotations
Without proper evidence, a landlord may struggle to justify deductions.
Tips for Landlords and Tenants
For Landlords
- Carry out a detailed inventory at the start of the tenancy
- Take dated photographs
- Keep receipts for repairs and cleaning
- Ensure the deposit is protected within 30 days
For Tenants
- Review the inventory carefully before moving in
- Take photographs of the property at the start and end of the tenancy
- Clean the property before leaving
- Keep records of rent payments and communications with the landlord
Good record keeping can help prevent disputes and strengthen your position if a disagreement arises.
Key Takeaways
- Landlords can deduct money from a tenancy deposit where the tenant has breached the tenancy agreement.
- Common deductions include unpaid rent, property damage, cleaning costs, missing items and unpaid bills.
- Landlords cannot charge tenants for fair wear and tear or use a deposit to fund property improvements.
- Tenancy deposit disputes can usually be resolved through a Tenancy Deposit Protection scheme’s free dispute resolution service.
- Evidence is essential when challenging or defending deposit deductions.
Need Legal Advice About a Tenancy Deposit Dispute?
Whether you are a tenant challenging unfair deductions or a landlord seeking to recover legitimate losses, obtaining legal advice at an early stage can help protect your position.
Our landlord and tenant team advises clients on tenancy deposit disputes, deposit protection obligations and compensation claims arising from breaches of tenancy deposit legislation.
Contact our team today to discuss your circumstances and understand the options available to you.
0151 306 3694