Here is a question to the blog clinic ‘rom Lyn who is a landlord
My tenants were responsible for a fire at the property. Cigarette stubs next to flambé liquid on a wooden shelf unit they had placed against the wall next to coal, fire kindling and ashes.
They’ve gone now thankfully, left the house disgusting. I have to pay an insurance excess to have the fire damage repaired (£26k plus vat). Can I take the excess from their deposit?
Answer
It really depends on what your tenancy agreement says.
Contrary to what many people may think, the act of taking a deposit does not of itself authorise the landlord to make deductions. And there are no standard rules about the deductions you can make which apply to everyone.
The deposit is the tenant’s money and the landlord’s right to make deductions comes from the tenancy agreement.
Which incidentally, is why there is no point in taking a deposit if you do not have a written tenancy agreement as there will be no written clause authorising you to make deductions!
So the first thing to do is to read your tenancy agreement and see what it says.
However assuming there is a clause about tenancy deposit deductions you should be all right.
Generally, these clauses say, in one way or another, that the landlord is entitled to make deductions for any loss suffered as a result of the tenant’s breach of the terms of the tenancy agreement.
Presumably, your tenancy agreement will have contained somewhere a prohibition against acts which are likely to damage the property or cause a fire, or prohibited smoking – in which case you should be all right.
They won’t have to pay the total cost as this is covered by insurance but you should be able to deduct the excess. Provided you are able to show that the tenants did cause the fire – which presumably you can.
By this logic is it never worth paying for an excess smaller than the deposit you take.
Only if the excess is the only claim under the deposit. I suspect that with these particular tenants there would be other deductions too.
Thanks Tessa. Interesting point you raise with regard to deposits where no tenancy agreement is in place.
I wonder how this works in reality though. if I give an easy example with a resident landlord situation where no deposit protection is needed – if tenant leaves owing some rent or having caused damage and landlord then deducts money from the deposit because of that, what can the tenant do?
Tenant could take court action perhaps to recover the deposit because no clause/terms were set out detailing how deductions could be made from the deposit. But landlord could then surely counter claim with rent arrears and damages. The conclusion would be the same.
I do wonder how the deposit protection schemes deal with these situations though. My feeling is that if tenant admits liability for damage or rent arrears they will still pay out to the landlord even in the absence of a tenancy agreement/written statement of terms regarding the deposit.
If the deposit does not need to be protected then the situation will be as you describe – if the case goes to court the Judge will no doubt accept the counterclaim.
However, it is very important for deposits protected under one of the schemes as the adjudicator can only deal with the issue of deductions from the deposit. They will not look at counterclaims as a Judge will. So if there is no tenancy agreement or no deposit clause they will reject the claim and the deposit money will go back to the tenant.
This is one reason why it is so important for landlords to have a written tenancy agreement.
If there is no tenancy agreement then the landlord should probably opt for going to court rather than adjudication.
If there was a like button, I’d like your comment Tessa, thanks! :)