It’s common practise for a deposit to be taken by landlords at the start of a tenancy, as this deposit protects them against any potential issues that might arise during the tenancy - such as a failure to pay rent, or if the tenants cause damage to the property.
With the rise in new legislation being proposed to try to improve standards within the private rental sector, it’s becoming increasingly important for landlords to keep up-to-date with their legal responsibilities, particularly when it comes to protecting student tenant deposits. However, it’s not just the legal aspects you have to consider, and deposit deductions can often lead to tense tenant and landlord relations – something that’s best avoided, if possible.
We surveyed over 1000 students to find out about their experiences with deposit deductions when privately renting at university. Our research* shows that 25% of student tenants that paid a deposit received deductions from the amount at the end of the tenancy, and the average amount of these deductions was £228.
With this in mind, we’ve shared below the most five common reasons that student tenant’s had deductions made from their deposits, and some tips for how to mitigate these potential issues.
*Private Student Accommodation Explored, ‘Deposits,’ November 2017
5 reasons why landlords keep student tenants’ deposits
1. General cleanliness
Our research shows that the majority of deductions were made because of general property cleanliness at the end of the tenancy. 34% of the students surveyed reported that deductions were made because the general cleaning wasn’t completed to a satisfactory standard. In addition to this, 25% had deposit deductions made because of a dirty oven.
If you’re concerned about the general cleanliness of your property, it might be worth ensuring tenants have access to a vacuum cleaner, and any other tools they might need to keep the house to a satisfactory standard – such as instructions on how to prevent mould build up.
It might also be worth reviewing the types of tenants you rent your property out to. You may find that a family, or long-term professional tenants, are more likely to make those little changes to upkeep the property and make it more homely, such as tending to the garden.
2. Scuffs on the walls
The second most common cause of deductions made from students’ deposits was scuffs on walls, with 24% reporting deductions because of this.
It’s usually a stipulation of the tenancy agreement that tenants aren’t allowed to put nails in the walls, or use materials such as Blu-tac to display posters (which accounted for 17% of deposit deductions). However, it might be worth considering whether it would be useful to allow tenants to make small decorative changes so that they can make their rental property feel more like a home.
Allowing tenants some flexibility with decoration might even make it a more desirable property for prospective tenants, and encourage longer term tenancies.
3. Marks on the carpets
Carpets receive a lot of wear and tear, and so it’s not surprising that marks on carpets accounted for 18% of deposit deductions. If you’re renting a property with carpets, it might be worth considering installing wooden or laminate flooring instead – not only is it considerably easier to clean for tenants, it will also save you the hassle of having to hire a professional carpet cleaner should they look a little scruffy at the end of the tenancy.
4. Overgrown garden
For most of us, the garden isn’t really a consideration until the sun starts shining again. If your rental property does have a garden, then it will usually be the responsibility of the tenant to maintain this, and this will be included as part of the tenancy agreement. Usually this will only cover off basic tasks, such as cutting the grass, and trimming back hedges.
We found that 13% of deposit deductions were due to an overgrown garden - so if this is included if your tenancy agreement, it’ll be worth making sure that your tenants have access to the tools they’ll need to keep the garden up to scratch – such as a lawnmower, or shears.
5. Damaged furniture
It can be a difficult decision, deciding whether to rent a property furnished or unfurnished. Our research found that that 12% of deposit deductions were due to scuffs or marks on the furniture, with a further 20% caused by broken or missing inventory items.
Whilst renting a property furnished could lead to a higher monthly rental income, and is more likely to attract student and professional tenants, it does also increase the potential for damage caused by general wear and tear. However, you don’t need expensive furniture to make your property desirable – it just needs to be clean and fit for purpose. It’s also a good idea to keep an inventory of all the furniture in your rental property, as this will help to avoid deposit disputes at the end of the tenancy.
What else do landlords need to consider when it comes to tenant deposits?
Keep up-to-date with changing legislation
The last few years have seen a number of legislative changes imposed on the lettings industry, including the need to protect tenant deposits in one of three government run schemes.
Landlords that fail to protect their tenants’ deposits in one of these schemes could end up being taken to court by their tenants, either during the tenancy or up to three months after it has come to an end. If they’re found to be at fault after a court appearance, then this could result in a fine of up to three times the deposit amount, which would need to be paid to the tenant as reparation within days of the court making the order.
Aside from protecting deposits, it’s a good idea to have a general understanding of what your legal responsibilities are as a landlord – such as what documentation needs to be provided to tenants at the start of the tenancy. This will help you to avoid any potential fines or penalties, and will also help you to keep an eye on what’s happening in the industry.
Make sure you’re covered
If you’re renting out a property to tenants, it’s important to make sure you have suitable landlord insurance in place to protect your investment against a variety of risks. With a number of different landlord insurance policies to choose from, it’s important to assess what cover you might need for your particular circumstances so that you can choose the cover that’s right for you. Landlord buildings and contents insurance, for example, will cover for damage to your property. Rent guarantee insurance, on the other hand, will cover the rental payments should a tenant fall into arrears. If you’d like to find out more about our specialist landlord insurance, please visit our website.
Sources: All research provided is based upon the ‘Private Student Accommodation Explored’ (November 2017), a report commissioned by Endsleigh that focuses on student tenants.
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