Deposit Disputes 

Many private rented landlords/agents require students to pay a deposit as a condition of letting accommodation. A deposit is also known as a bond. The deposit acts as security against non-payment of rent, damage to the property, or other breach of the tenancy agreement. Increasingly landlords and letting agents are not charging a deposit, and will instead ask you to pay the last month or sometimes 2 months’ rent in advance. If this happens the landlord or agent may ask you to pay for damages, or non-payment of rent. If you do not, they may pursue the matter through the County Court.

Remember: any disputes concerning your deposit must be raised by you.

What is a deposit?

A deposit or bond is a sum of money which is held against damage to the property, rent/utility arrears, any essential cleaning, removal of large amounts of rubbish, the cost of replacing any locks or keys if not returned on time and anything else the Tenancy agreement might stipulate as appropriate.

There are different rules for deposits if you live in the same building as your landlord. This information assumes you do not.

You will usually be asked to pay a deposit as you sign the tenancy agreement. A deposit can be between one - three months’ rent, though can be more if you are unable to provide a guarantor.

If you share accommodation with other tenants under one tenancy agreement, you will have a joint tenancy. Landlords normally take a single deposit for the whole of the joint tenancy. This means that if another tenant doesn't pay their share of the rent, or if they cause damage to the property, your landlord can deduct this amount from the whole deposit. If this happens, you and the other tenants will have to agree on how to divide up the remainder. The deposit protection schemes will usually only deal with the lead name on the tenancy agreement. This person must accept the responsibility as representative of the other joint tenants at a property.

Deposit Protection Schemes

If you are an assured shorthold tenant, your landlord or agent must protect your deposit in a government-approved Tenancy Deposit Protection (TDP) Scheme. They should do this within 30 days of receiving it. They must also inform you that your deposit has been protected within this time frame. This is a legal requirement. 

There are two types of TDP scheme:

• Custodial scheme - your landlord/agent pays your deposit into the TDP scheme and the scheme looks after your money.
• Insurance-based scheme - your landlord holds on to your deposit and pays insurance to the scheme.

A TDP scheme will help you get your deposit back at the end of the tenancy if you're entitled to it, or help to settle a dispute with the landlord about how much they want to deduct. The three TDP schemes are

• Deposit Protection Service
• MyDeposits
• Tenancy Deposit Scheme

At the end of your tenancy

• Make sure the rent payments are up to date
• Go through your contract and check what it says about leaving the property. Most contracts state that you must leave the property in at least as good a condition as it was in when the tenancy started. Most also say that furniture needs to be in its original position and the property and garden clean and empty.
• If you live in a shared property and you are all named on the same contract, you will all be jointly and severally liable for any damage done and any cleaning not done. This means that the landlord can argue a deduction from everyone’s deposit and pursue all tenants equally. It is really important that you all work together as much as possible because one tenant can cause all to lose money.
• In terms of condition, the next thing you will need to check is your inventory, if you have one. The inventory will be used by the landlord as evidence of the condition and cleanliness of the property when you moved in. If it says that everything was clean and there was no damage, you will need to leave it like that. If you don't, the landlord will have a strong case to argue deductions from your deposit.
• You are normally expected to leave a rental property 'professionally clean', which usually includes cleaning skirting boards, windows, windows sills, removing stains from grout in bathrooms and cleaning ovens and defrosting and cleaning fridge freezers. If you have evidence that the property was not clean when you moved in, you can use this as an argument not to clean as thoroughly on leaving.
• Remove all rubbish from the property (don’t just leave it outside - you may still be charged)
• The last person in the property will need to read the meters when they leave and inform any companies you use that you have moved out. We recommend that you take photographs of these as proof. Some companies, such as broadband providers, may ask for notice to cancel a contract and you will be liable to pay during the notice period. You can avoid paying for services after the tenancy ends by making sure you give the required notice in advance.
• The last person in the property will also need to take detailed photographs of all cleaning done and the condition of the property and its contents when they left. This includes skirting boards, inside the oven/fridge/freezer, under beds, the walls in the hallway and anywhere else where the letting agent may try to say you haven’t cleaned. Send the photos to the others in your group immediately so you have a record of the time and date.
• Each tenant will need to return their key to the landlord or letting agent.
• If your contract says that you need to send proof of all the final bills being paid for the property, make sure this is done or your deposit return could be delayed.
• Request a return of your deposit.

The landlord or agent should meet with one or all of the tenants at the property to agree the condition and any deductions to be made from the deposit. All parties should agree and sign the closing inventory or note where there is a disputed item. Landlords then have 10 days from the agreement of the deposit to return it to the lead tenant, but it can be a much longer process if there is a dispute on the amount to be returned.

What can be claimed from a deposit?

Your landlord should only make deductions from your deposit for things that cost them money. You might not get your full deposit back if you:

• Owe any rent;
• Damage the property or furniture;
• Lose or damage anything in the 'inventory';
• Leave the property in a dirty condition;
• Do not pay any bills for which the landlord may end up being liable for;
• Fail to provide evidence of Council Tax exemption;

You might also lose some or all of your deposit if your landlord has to pay court costs for action against you.

You shouldn't lose any of your deposit for reasonable wear and tear in the property, for example damage that has taken place over time through normal use. This could be the carpet becoming worn.

Anything which needs to be repaired or replaced should be on a 'like or like' basis, so a second-hand desk shouldn't be replaced with a brand new one at the tenant's expense.

You can ask your landlord/agent to show you receipts or estimates for anything they want to deduct from your deposit.

Disagree with the deductions?

At the end of your tenancy you should get your deposit back within ten days if you and your landlord are in agreement. If you disagree how much deposit you should get back, for example if your landlord deducts money for something you disagree with, you should try reasoning with the landlord/agent first. If that does not work, your TDP scheme can help resolve the dispute without going to court.

It is important to make sure that you are aware of any time limit imposed by your TDP as you risk losing their protection otherwise.

Step 1: Write to your landlord. Your first formal email/letter should state:

• A summary of the issue. Is your landlord proposing deductions, refusing to return your deposit, or simply ignoring you?
• If they are proposing deductions, include a breakdown of which issues you are accepting liability for and which you are disputing;
• If the issues you are accepting liability for do not have fees/costs listed in your tenancy agreement, that you will only agree to deductions where the landlord has provided proof of actual and reasonable cost;
• For issues you are disputing, clearly explain why you are doing so (e.g. that the mattress stained when you moved in);
• What timescale you are giving for a response and return of your money;
• Attach relevant evidence. Relevant evidence could be your inventory, photographs taken when you moved in or out;
• Keep a record of everything you send. If you are sending a letter, you should do so by ‘to sign for’ delivery through the Post Office, to make sure you have proof that the landlord has received it.

Step 2: If this does not resolve the matter to your satisfaction, we recommend sending a second formal email/letter and:

• Refer to your first letter;
• If the landlord/agent have responded, address what they say and whether you agree or disagree;
• Give a final deadline in which to return the amount you are requesting, or state that you will be raising a dispute with your TDS.

Raising a Dispute with Tenancy Deposit Scheme

Find the details of the scheme, which should have been given to you within 30 days of the start of your tenancy agreement. Both types of TDP scheme - custodial and insurance-based - offer a free service for landlords and tenants to sort out deposit disagreements. This service is called alternative dispute resolution (ADR).

The ADR service will help you decide how much of your deposit you should get back. Most schemes will have a strict time limit for using ADR and it is important that you are aware of this time limit.

Custodial schemes and Insurance based schemes work differently in resolving disputes. You can find out about the process on the schemes website and there will be an online tool to raise the dispute.

• Deposit Protection Service
• MyDeposits
• Tenancy Deposit Scheme

What to do if your landlord has not protected your deposit

If your landlord hasn't used a TDP scheme, or does not you details of the scheme they've used, you can make an application to court to order that:

• your deposit is protected or returned to you and/or
• you are paid compensation of between 1 and 3 times the amount of the deposit.

1. Send a letter warning of legal action.

You will need to send your landlord a 'letter before action' and give them formal opportunity to put things right before you apply to court. The letter should detail

• when you paid your deposit;
• the fact that the landlord/agent are legally obliged to protect your deposi within 30 days receiving it;
• a reasonable deadline in which to protect your deposit and provide the required information about where it is protected; and
• that you will be applying to the court to have the money refunded or protected and to claim compensation up to the value of 3 x the deposit if they do not do so.

Shelter Cymru offer many useful template letters you can use to help you with this.

2. Issue a claim

If the landlord does not protect your deposit after a letter before action, you can apply to the court. To do so, you will need to

Download an N208 Claim Form and follow the N208A Notes for Claimant.

If you are a joint tenant, all the tenants must make the application jointly. If one of the joint tenants has disappeared, you will need to ask the court to make an order that the claim can go ahead without the missing tenant.

In the ‘Details of claim’ section, set out

• the question(s) you wish the court to decide - this is if and how much of your deposit should be returned to you and if your landlord should pay you compensation;
• the remedy you are seeking - this the return/protection of your deposit and/or compensation;
• the legal basis for your claim - this is your landlord’s breach of sections 213 Housing Act 2004 and the applicable penalties under 214 Housing Act 2004; and
• which Part of the Civil Procedure Rules (CPR) you are making your claim under - this is Part 8.
• You can ask the court to order that your landlord pays your court fee for starting the application. If you win the case the court will usually agree to this.
• If you are claiming a refund of your deposit as part of the claim, you can ask the court to order that your landlord pays you interest on the amount you are owed, payable from the date the deposit/part of the deposit should have been returned to you.

You should include any relevant evidence you have to support your claim. Relevant evidence could include:

• a copy of your tenancy agreement
• evidence that a deposit was paid and when it was paid
• the tenancy deposit protection scheme certificate (if you have one)
• copies of letters and/or emails to and from your landlord
• details of enquiries you have made with tenancy deposit schemes to see if your deposit is protected.

Make copies of your claim, your evidence and the N208C Notes for Defendant for you, the court and each defendant (the defendant will be your landlord(s)). When you have done this, keep your copy somewhere safe and send the copies for the court and defendant(s) to the court office. The court will send your claim onto your landlord, along with a response pack, which includes forms for them to fill in and return.

You will usually need to pay a fee to issue a claim but you may be able to claim money off your court fees if you are on a low income.

3. Outcome

What happens next depends on your landlord:

• If they do not respond to your claim within 14 days, you can ask the court to make ‘judgment in default.’ If this happens, there won’t be a hearing and the judge will make a decision based on the information you have provided in your claim.
• If they admit owing you money, they should complete an admission form with an offer of payment. You can then consider whether you accept their offer and complete the Notice of Admission. The court will then decide whether to list a hearing. You should carefully consider any offers your landlord makes you to settle the case, even if it is not the full amount you have claimed. The court may decide that you should have to pay some of your landlord’s costs for coming to court if you refuse what they consider to be a reasonable offer.
• If the landlord disputes your claim, your claim will progress to a hearing. The court will send you a copy of your landlord’s response and give you a date to attend. You may also be asked to send in extra documents/evidence that you want the court to consider and a written statement setting out the history of what has happened. You will need to include a ‘statement of truth’ on any witness evidence, stating “I believe that the facts stated in this witness statement are true” and make sure it is signed. The same applies if you have asked anyone else to do a witness statement to support your claim. Usually the deadline for getting the information to the court is 14 days before the hearing.

The court hearing should be informal and you should be able to represent yourself. Your landlord may be represented by someone else such as a solicitor. The judge will ask questions based on the evidence provided and make a decision about your claim.

What happens if you decide to withhold your rent?

If you think that you and your landlord are likely to disagree about the return of the deposit, you might decide to withhold some or all of the last rent payment.

It's important to remember that you are legally liable to pay your rent and if you withhold it, your landlord may take court action to recover the debt.

If nonetheless, you decide that you want to withhold the rent, you should keep the money in a separate bank account in case your landlord does try to claim it back.

Contact Student Advice

Advice@cardiff.ac.uk
+44 (0)2920 781410