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Property Damage Liability (Landlord V Tenant)

If you’re a landlord, the last thing you want is a call from a tenant talking of property damage. Even if your tenants are normally no trouble at all, damage to your building or its fixtures and fittings can cause you all sorts of problems, not least the inevitable headache of working out who’s responsible for the repair costs – you, the tenant, or whoever caused the damage?

Who’s responsible for reporting damage to a rental property?

It’s the tenant’s duty to report any damages to you or your letting agency. With the damage reported, you then need to work out with your tenants how replacements or repairs are going to be arranged and paid for – but agreements aren’t always reached amicably. That’s why it’s best to clearly state and highlight the policy on property damage in the tenancy agreement. But even the most robust tenancy agreements will have grey areas. If this is the case, or a tenant has damaged your property and not told you, or is refusing to pay for repairs, here are some things you can do to resolve the situation. 

What damage is classed as wear and tear?

It’s important to make a note of the difference between what is ‘fair wear and tear’ and what is actual damage, and make sure your tenants are fully aware of this from the outset. It’s important to note the difference between ‘fair wear and tear’ and actual damage. The law is becoming more defined in regard to fair wear and tear, so with more rigid guidelines in place it’s no longer down to your own discretion to classify what counts as wear and tear, which should take some of the pressure off you. 

You need to make sure you’re fully aware of what’s been set out in law.  

Such as the fact that a tenant can no longer be charged – or have any money deducted from their security deposit –  for damage that would have inevitably occurred as a result of the property being inhabited. If, for example, the walls of your property appear to be lightly scuffed at the end of a tenancy, you can’t reasonably accuse the tenant of causing the damage – minor marks such as these are to be expected in a property that’s been lived in.

Genuine damage is considered to be any which could reasonably have been avoided. This is more than simple wear and tear, and would include incidents like a burn in the carpet or a hole put in a wall. To cover for wear and tear, your tenancy agreement should contain a clause with worded similarly to this:

‘The tenant shall keep the interior clean and well maintained and the property is expected to be found in the same state as when the tenancy first began – the exception being fair wear and tear.’

When should you deduct from the deposit?

If any damage has been caused that can’t be attributed to wear and tear, then you have the right to retain part or all of the security deposit to cover the cost of repairs. If a tenant has caused serious damage to your property, you may be within your rights to evict them for breach of contract, but you should always take legal advice before doing so.

The Landlord and Tenant Act 1985 sets out the responsibilities of both landlords and tenants. Section 11 deals with the issue of repairs and states that tenants should: 

‘Make good any damage to the property caused by the behaviour or negligence of the tenant, members of his/her household or any other person lawfully visiting or living in the property.’

This means that any damage caused by the tenant, or by anyone the tenant invites to the property, will need to be repaired or paid for by the tenant. If, for example, if your property is rented out as a cafe, and a customer somehow smashes a window, it would be the tenant’s duty to get it repaired, or the money could be deducted from their deposit.

How do you deduct from the deposit?

If you need to take money from your tenant’s security deposit, your tenant has the right to see receipts and can even dispute any costs. If the damage is less than £3,000, you can write to the small claims court and you won’t need a solicitor. The deposit should – by law – be placed into a deposit protection scheme. This money will be made available to you if anything is damaged during the tenancy.

How to prevent future tenancy issues

At the beginning of each tenancy, you should take an inventory of the property – along with photographic evidence of its condition – before the tenant moves in. The inventory should include all walls, carpeted areas and any furnishings – for example furniture and appliances. Make it clear that, by signing the tenancy agreement, the tenant is acknowledging the current condition of the property, and agrees to maintain this state until the tenancy terminates. 

If, at the end of the tenancy, you can’t come to a mutual agreement with the tenant in regards to the condition of the property and the cost of any repairs, then the third party holding the security deposit can act as an independent adjudicator. It’s worth noting that the decision of the third party is final – after the decision has been made, you cannot take the claim to court. 

To minimise the risk of lengthy dispute processes, make sure your tenancy agreement clearly states the consequences of causing damage to the property – and that your communication channel with your tenant stays as open as possible. You should always keep evidence of any communication regarding damages for instances where a claim needs to be made against your landlord insurance policy, or a dispute is escalated to litigation.


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