What if a tenant does more damage than a security deposit?

A tenant’s security deposit serves as protection for landlords, helping to cover the cost of damages or repairs during and after a tenancy. While it’s not legally required for landlords to collect a security deposit, it’s a common practice and highly recommended.

But what happens when tenant damage exceeds the deposit? This can quickly become a challenging situation for any landlord. Let’s break down what you can do in this scenario.

What should I do if the tenant damage exceeds the security deposit?

If the tenant damage exceeds the security deposit, the best case scenario is that you let your tenant know and they agree to cover the extra costs. Of course, however, it’s not always quite that straightforward.

Sometimes, landlords may need to take legal action and go to the courts to recover that extra money. If this is the case, you will have to prove that your tenant caused the damage and that the damage was more than normal wear and tear. You’ll also need to prove that the cost of fixing the damage is more than the security deposit.

Alternatively, you could consider mediation with a professional mediation company with your tenant to resolve the dispute. All tenancy deposit schemes offer Alternative Dispute Resolution (ADR) that you can utilise in this situation.

Steps to take when tenant damage is more than the deposit

It’s really key that you record everything if the tenant damage exceeds the security deposit. Take photos of all damage and record any communication that you have with your tenant about the damage. It’s also a good idea to get some quotes from tradesmen to fix the damage in question and to get these in writing. These will all build your case should you need to take legal action.

Next, let your tenant know in writing that there are repair costs needed that exceed their deposit. Include a breakdown of the damage, including photos, and the copies of the repair quotes.

What happens next depends on how they react. If they agree to cover the extra costs then it should be straightforward to resolve. If they dispute this, then you will need to choose whether to take legal action or try mediation or ADR.

In what instances might tenant damage cost more than the deposit?

In the UK, the average cost of a tenancy security deposit is £1,434. With that in mind, tenant damage that could potentially cost more than the deposit could include multiple broken appliances, holes in walls and heavily stained carpets.

It’s unlikely that just one or two damaged items or areas of the property would cost more to repair than the security deposit, but if the property has been left in disrepair and you are left with multiple damages to contend with then this could result in legal action to recover the extra cost.

Is there anything that cannot be deducted from the security deposit?

Yes, you cannot deduct money from the security deposit for repairs on anything that can be considered fair wear and tear. Fair wear and tear is anything that can be defined as reasonable damage through everyday use, such as worn carpets, faded curtains or minor scuffs and scrapes on the walls.

Essentially, you cannot expect your property back in the same condition that it started a tenancy in. It’s important to keep a photographic inventory of the condition of your property and the furnishings provided within it in order to determine what can be classed as fair wear and tear at the end of the tenancy and what can be classed as damage. This will help your case should you be in a position where you are trying to recover extra money for damages in court.

How can I prevent tenant damage?

How your tenant treats your property is often out of your control. However, there are a few preventative measures that you can take to avoid your tenant damaging the property.

Firstly, screen your tenants thoroughly. Finding the right tenant is the best step that you can take in ensuring a smooth tenancy. When carrying out tenant screening, conduct credit checks, criminal record checks and gain references from previous landlords where possible. All of these steps will minimise risk.

Secondly, carry out regular property inspections to catch issues early before they become bigger. At the start of a tenancy, carry out a property inspection after three months to see how tenants are treating the property. If all is well, you may only need to inspect the property every six months. If you have any concerns, consider inspecting the property every three months.

Lastly, clearly define the expectations and clauses around property care and maintenance within the tenancy agreement. That way, there can be no misunderstandings around responsibilities.

It would be naive to assume that significant damage would never happen to your property – accidental or malicious. By taking out landlord insurance, you can rest assured that should the worst happen, you’re covered.

To find out more about how we can protect your property, contact us today. Call us on 01788 818 670, get a quote online or request a callback.