What are the biggest causes of deductions from rental deposits?

When renting out a property, most landlords – or their letting agents – opt to take a deposit from the tenant(s) prior to the tenancy starting.

Deposits offer a level of protection to landlords, meaning that, if the tenant breaches the terms of the tenancy agreement, they can them make appropriate deductions from the deposit.

Clear property damage, poor cleanliness or anything that is different from the property’s original state, which is easy to identify if there is an inventory management report and a schedule of condition in place at the start of the tenancy agreement, will enable the landlord or their agent to rightly off-set the compensation from the tenant’s deposit.

Research by interior specialists Hillarys, part of ongoing research into the habits of Britons and their attitudes towards renting, showed that top reasons that tenants were given for why they had lost part, or all, of their tenancy deposit.

Marks on the walls, carpet stains, the need for redecorations and mould were among the five most common reasons listed as to why tenants had had money deducted.

Broken furniture29%
Marks on walls24%
Carpet stains21%
Redecorations12%
Mould9%

Spokesperson for Hillarys, Tara Hill, said:

Security deposits are an unavoidable part of renting a property, and can be an essential way for landlords to deal with damage caused by tenants. But they can result in disputes and are a major cause of distrust among tenants.

Whilst there appears to be an issue around the lack of trust when related to deposit protection, according to the research, Paul Carr Residential Lettings use The Tenancy Deposit Scheme (TDS), which is run by The Dispute Service under a government awarded contract.

For further details in regards to The Tenancy Deposit Scheme and the guidelines Paul Carr Residential Lettings follow, please see our Tenant’s Guide.

What is the Tenancy Deposit Scheme?

You may be wondering what on earth the Tenancy Deposit Scheme (TDS) is and how it affects you. Let us explain.

The Tenancy Deposit Scheme (TDS) is run by The Dispute Service Ltd. It is an insurance-backed tenancy deposit protection scheme authorised by the government.

The TDS has two main roles:

To protect deposits and to help resolve disputes about deposits

What is tenancy deposit protection?

Tenancy deposit protection applies to all deposits for assured shorthold tenancies that started in England or Wales on or after 6 April 2007. By law, a landlord or agent who receives a deposit for such a tenancy must protect the deposit.

Most residential tenancies in the private rented sector are assured shorthold tenancies, with some exceptions. For example, a tenancy cannot be an assured shorthold tenancy if:

  • the tenant is a company;
  • the rent is more than £100,000 a year;
  • the tenancy is for a holiday let; or
  • a university or college rents the accommodation to its students.

Tenancy deposit protection means:

  • protecting a tenant’s deposit with a government-authorised scheme such as TDS;
  • providing the tenant with prescribed information about where their deposit is being;
  • protected and how it will be managed.

Tenancy deposit protection schemes can be one of two kinds:

Custodial – this is where the scheme itself holds the deposit during the tenancy.

Insurance backed – this is where the landlord or agent holds the deposit during the tenancy, but must give it to the scheme at the end of the tenancy if there is a dispute. The scheme is insured because this guarantees that tenants will always get back the money to which they are entitled.

The TDS is an insurance-backed scheme.

Paul Carr Residential Lettings use the Tenancy Deposit Scheme. You will be provided with a certificate to confirm that your deposit is held within the TDS.

Tenancy Deposit Scheme Member logo
If you are looking to rent a property, contact our Residential Lettings, team who are committed to making the application process, and your tenancy, as stress-free as possible.