Emily Estates

When renting a property, tenants are required to pay their landlords a deposit as insurance against potential damage to the property or non-payment of rent. More often than not the money will be returned at the end of the tenancy, but disputes can arise in those instances where at least part of the deposit is withheld.
While there are provisions made within tenancy agreements to allow for fair wear and tear, such as scuffs on the walls, disagreements regarding the extent of damage to the property during the tenancy are not uncommon: the tenant may feel that the condition of the property is satisfactory, while the landlord does not. Of course, what is deemed to be ‘fair wear and tear’ is wholly subjective and can be affected by the motive of the party in question. In addition to this, some landlords may, intentionally or not, use the funds for other purposes during the course of the tenancy and as a result are not able to return the deposit.
Since April 2007, it has become mandatory for landlords renting their property under an assured shorthold tenancy to protect deposits under a government-approved tenancy deposit protection scheme. There are two types of schemes: the first is a custodial scheme where the deposit is physically held by the scheme operator, who then releases it to the person entitled to it at the end of the tenancy; the second is an insurance-based scheme where the landlord (or their estate agent) keeps the deposit but pays a premium to insure it.
In the latter case, if the landlord doesn’t pay the tenant the amount they are due at the end of the tenancy, the insurer pays the tenant and then recoups the money from the landlord. Landlords should, however, be aware that they are responsible for repaying the deposit even if their estate agent holds the deposit – this can be a problem if the estate agent goes out of business, and so landlords should check what safeguards the agent has in place to protect their deposits.
These schemes have the effect of reducing the number of disputes being taken to court, which is often a lengthy and costly process, as they offer their own dispute resolution services. However, using these services is not compulsory and the landlord and tenant in question must both agree to do so, accepting any decision as final.
There are currently three government-approved schemes operating in the UK. For more details and advice regarding your responsibilities as a landlord, as well as all the latest property news, please visit MeetMyAgent.co.uk. We specialise in estate agent reviews and all things property related to help homeowners find the best local estate agents in London.