What can I use my tenant’s deposit for?

Is an inventory really necessary? And what can, and can’t a landlord claim for at the end of tenancy? The answers are right here, courtesy of deposit experts #AskTDS

Can I claim from a tenant’s deposit if I didn’t provide an inventory?

A tenancy deposit is an amount of money taken by a landlord and held in security against the tenant’s obligations under the tenancy agreement.  Deductions made from a tenancy deposit should be to remedy a loss suffered by the landlord, and is most commonly to pay for cleaning, damage, or to settle rent arrears. If the tenant challenges the deductions, the burden of proof lies initially with the landlord to show that the tenant has breached the tenancy agreement, and that the landlord has suffered a loss due to that breach.

Where the landlord’s claim is related to the condition of the property (as opposed to rent arrears), the starting point for the adjudicator is whether the condition has deteriorated between the start and end of the tenancy, beyond fair wear and tear.

Inventories are a common, tried and tested method of demonstrating the contents and condition of the property at the start and end of the tenancy, and are usually  a key piece of evidence to support a claim.



I have a check-in report and a check-out report, but no inventory – will I still be able to make a claim?

The terms check-in report, inventory and schedule of condition are often interchangeable. In its purest form, an inventory is a list of items. A schedule of condition includes the decorative state of the property, cleanliness, and condition of furniture, fixture and fittings. In the absence of such documentary evidence at both the start and end of the tenancy, it will be difficult to show that the condition has changed.

There are circumstances where other evidence can be helpful, such as detailed cleaning invoices from just before the start of the tenancy, or a receipt for a brand new oven. TDS is not prescriptive about the evidence one must have, but we do recommend that you have a thorough check-in and check-out report as, in our experience, that is the best possible evidence and should assure all parties that the condition of the property has been recorded and agreed upon.

In short, if all parties agree to the deductions, TDS will never ask for any supporting documentation. However, if a dispute is raised over the return of the deposit, you are more likely to be successful in your claim if you have documentary evidence, such as an inventory/check-in report. Typically, where the claim is due to a change in condition of the property (as opposed to rent arrears) we would expect to see the tenancy agreement, check-in and check-out reports and quotations, invoices or receipts to quantify the extent of the loss.


What can I deduct from the deposit?

The deposit is the tenant’s money and should only be kept if you have suffered financial loss. Reasonable deductions could include:

·       Cleaning​​​​​​​​​​​​​​
·       Damage
·       Redecoration​​​​​​​
·       Missing items
·       Gardening
·       Rent arrears
·       ​​​​​​​Unpaid utilities

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Why you must include a deposit use clause in your tenancy agreement

​​Most deposit deductions are agreed between the tenant and landlord without the need of TDS’s dispute resolution service. However, if it does result in a dispute, the adjudicator will start by looking at the deposit use clause or deposit clause.

If there is no deposit use clause, it is unlikely the adjudicator will make an award to the landlord. Therefore, it is essential you include one.

Many free online tenancy agreement templates do not include a deposit use clause, so make sure you check before using one


What should a deposit use clause include?

A good deposit use clause will outline what the tenancy deposit can be used for. Therefore, it is essential you think about what you may want to use the deposit for at the end of the tenancy. This is likely to include cleaning, damage, missing items, gardening, redecoration, outstanding rent and unpaid utilities.

Our guide to Prescribed Information and Clauses provides an example deposit use clause for landlords to use as a starting point in their tenancy agreement.

How much can I take from the deposit?

You should only charge a reasonable amount from the deposit and you should provide evidence of the costs you incurred.

If you are charging for damaged items, you should account for reasonable amounts of wear and tear. For example, if your tenant damaged your carpet after living in the property for five years, you would not be able to charge them for the cost of a brand-new carpet.

We have a guide to product lifespans available for landlords to help you understand how adjudicators factor in wear and tear.


What other clauses should I include in my tenancy agreement?

In certain circumstances you may wish to add unique clauses to a tenancy agreement.

For example, if you have agreed that the tenants may keep a pet in the property you might want to add a clause stating you can use the deposit for any damage caused by the tenant’s pet.

You might even want to name the pet in tenancy agreement, quantifying that this is the only pet allowed to live at the property. This prevents you agreeing to one dog, and later discovering that the tenant also had 3 cats and a gerbil!

Our guide to Prescribed Information and Clauses includes example clauses you may also want to include in your tenancy agreement.

Remember, you can only make a deduction from the deposit if you have suffered financial loss. You must also make sure you include a deposit use clause in the deposit, otherwise if you end up in a dispute the adjudicator may not be able to make you an award.

For more essential landlord tips please view our landlord FAQ page.

How Howard can help Landlords

If you a landlord and need help or advice about deposits, or any other lettings related matters please do not hesitate to contact the Howard Lettings Team on 0117 9238238 (opt2). We will be happy to help!

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0117 9238238
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