The only way to appropriately return a tenants deposit is by using the necessary evidence based processes. This includes ensuring all inventory inspections are up-to-date from the 'unbiased third party' initial inventory check-in though to the check-out. This is the only way that the deposit can then be appropriately returned in the best interests of the Tenant and Landlord. If there is a dispute then the adjudicators can then fairly assess based upon the evidence provided.
But How Should You do the Assessment When You Have Received the Check-Out?
Normally a good check-out report will summarise all actions for the agent/property manager, breaking it down into sections;
Typically we should deal with the tenant items first as the deposit should normally be returned within 10 days.
If there is a dispute and neither party can agree then the disputed amount must be retained by agent/landlord with required evidence submitted to the adjudicator for review.
If there is a dispute and neither party can agree then the disputed amount must be retained by agent/landlord with required evidence submitted to the adjudicator for review.
Some Terminology Used in Deposit Assessment
Deposit - A tenant deposit, also known as a security deposit or rental deposit, is a sum of money paid by a tenant to a landlord or property owner at the beginning of a tenancy. The purpose of the deposit is to provide the landlord with financial security against any potential damages, unpaid rent, or other breaches of the tenancy agreement by the tenant.
Dilapidations - Tenant dilapidations refer to the repairs, alterations, or reinstatement works that a tenant may be responsible for carrying out at the end of a tenancy, or during the tenancy term as specified in the tenancy agreement. These will be specified in the check-out.
Betterment - When assessing damage a landlord cannot improve or enhance the value of a specific item over what it is worth, they must 'apportion' the damage see below.
Apportionment - This is the process that must be used when an item is partially damages taking account of its original condition and expected useful life - see product lifespan. The apportionment formula must be used.
Use the apportionment formula if an item has to be replaced, see below example.
Check-Out Report - The back to back audit of the original inventory noting differences and allocating responsibility.
Dilapidations - Tenant dilapidations refer to the repairs, alterations, or reinstatement works that a tenant may be responsible for carrying out at the end of a tenancy, or during the tenancy term as specified in the tenancy agreement. These will be specified in the check-out.
Betterment - When assessing damage a landlord cannot improve or enhance the value of a specific item over what it is worth, they must 'apportion' the damage see below.
Apportionment - This is the process that must be used when an item is partially damages taking account of its original condition and expected useful life - see product lifespan. The apportionment formula must be used.
Use the apportionment formula if an item has to be replaced, see below example.
- Cost of similar replacement carpet/item = £500
- Actual age of existing carpet/item = 2 years
- Average useful lifespan of that type of carpet/item = 10 years
- Residual lifespan of carpet/item calculated as ‘3)’ less ‘2)’ = 8 years
- Depreciation of value rate calculated as ‘1)’ divided by ‘3)’ = £50 per year
- Reasonable apportionment cost to tenant calculated as ‘4)’ times ‘5)’ = £400
Check-Out Report - The back to back audit of the original inventory noting differences and allocating responsibility.
Understanding these terms and applying a process to assess the tenants deposit to return will result in a fair conclusion to the tenancy.
If you need help with check-out assessments or deposits just ask us.
[email protected]
+44 7932 760 563
If you need help with check-out assessments or deposits just ask us.
[email protected]
+44 7932 760 563
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