What is the biggest cause of deposit disputes?

What is the biggest cause of deposit disputes?

Deposits can be a huge source of tension for those in the private rented sector and a dispute over a deposit being withheld can cause the most harmonious tenant/landlord relationship to turn sour.

A new study carried out by Ome, the deposit alternative scheme by the insurance provider Hamilton Fraser, has explored the most common causes of deposit disputes and found that poor communication was the biggest cause. The study looked at the 9,323 disputes that were raised with Hamilton Fraser’s deposit protection scheme mydeposits and looked at the reasons that they were raised. Some 30% of the disputes raised were because landlords had withheld their tenants’ deposit without giving an explanation. This was closely followed with disputes regarding the cleanliness of the property upon check out (23%), and disputes involving damage to the property (18%). Other common reasons included general decoration of the property, missing items and rent arrears.

On the plus side, it seemed that Ome saw a reduction in disputes escalating to the adjudication stage from the previous year. Out of all the disputes raised, whilst the number that escalated to the adjudication stage was still high (62.1%) – it was a reduction from the previous year’s 64.7%. These results suggest that a quick resolution can happen once the tenant and the landlord start communicating effectively.

Matthew Hooker, co-founder of Ome, said of the findings: “The return of a deposit can often be a cause for an otherwise fantastic tenant-landlord relationship to sour and the stats show that the leading reason for this is poor or lack of communication.

“The sector is starting to provide solutions to these friction points and technology is helping to create a more transparent end of tenancy process.”

So, what can both parties do to avoid any disputes when it comes to deposits? As the study suggests, poor or lack of communication between tenants and landlords can cause a lot of problems down the line, so it’s important that everyone involved communicates properly. A lot of the time, a landlord can minimise the chances of deposit dispute by giving clear reasons for withholding a deposit. It’s very rare for landlords to keep all or part of the deposit for no good reason, so it’s better for tenants to be clear about the reasons from the offset.

Additionally, Landlords should also have the tenant present when they go through the inventory at the start of the tenancy and at the end when the tenant checks out of the property – this way, both parties are present when any damages or issues become apparent so there won’t be any miscommunication when it comes to the deposit being handed back. During tenancy, it’s important that tenants make their landlord aware of any issues as soon as they arrive and if they want to decorate or do anything cosmetic to the property, they will need to run it past the landlord first.

Ultimately, it’s important for both tenants and landlords to be open and honest throughout the tenancy to avoid any hassle after it ends.

Do you need further advice or information regarding deposits? Download our tenant guide today.

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