More private tenants want to protect their deposit from accidental damage charges

By RentSafeUK
In News/Blog
Aug 22nd, 2017

As the amount of private landlords deciding to ditch taking deposits increases, Tenant Referencing UK thought it the ideal time to look into why this is and attempt to bridge the gap to enable a smooth tenancy for all parties involved.

Our partners at Tenant Referencing UK caught up with MyDeposits and asked:

What does a deposit actually cover a private tenant for?

The deposit acts as security for the landlord against any breach of the tenancy agreement by the tenant. However it is important to remember that wherever the deposit is held, it belongs to the tenant and it is for the landlord to prove, with evidence, any entitlement to withhold some, or all of it, at the end of the tenancy.

From the tenant’s perspective, the paying of a deposit highlights the need to look after the property in order to have it refunded at the end.

What is the average deposit taken across the country?

o   England – £1, 235

o   Wales – £756

o   Scotland – £558

What are the most frequent deposit dispute claims?

o   Cleaning – 30% of all claims

o   Property Damages – 28% of all claims

What are the most common accidents you’ve come across?

Whilst it would be impossible to put accurate statistics to this question, common accidents we come across include;

o   Iron/hair straightener burns on carpets

o   Stains to carpets

o   Stains to furniture

o   Condensation/mould on walls

o   Marks on walls

Furthermore, shockingly almost £750k in tenancy deposits have been stolen by letting agents this year alone. (Source)

The Problem

Herein lies the problem more and more UK landlords are facing. Landlords primarily want a foolproof way of finding and keeping tenants, but the deposit system (as it stands) presents a minefield of hassle and hazards for landlords, especially if the property damage exceeds the deposit amount.

At Rent Safe UK, we hear so many horror stories on a daily basis from our landlord clients. Here are some prime examples;

o   My tenant dropped a frying pan on the carpet. The damage is so extensive that I need to re-carpet the whole area…

o   My tenant has cracked a floor tile. It is not possible to match it as it’s a bespoke design…

o   There has been an electricity fault, due to no fault of the tenant, and the entire contents of their freezer (full of food for the Christmas holidays) is now inedible…

With this in mind, as the pay squeeze intensifies coupled with wage growth falling further behind inflation, more and more tenants are asking: Is it possible to protect against the loss of my deposit from charges for accidental damages caused to the landlord’s property?

As Mydeposits have quite rightly pointed out, a deposit acts as a security blanket for the landlord against any breaches of the tenancy agreement. However, if a tenant has an accident similar to those laid out above, more often than not, they will have no way of paying for repairs from extra income or savings. The tenant can then lose their deposit and this means the tenant is caught not being able to move home, unless they save up an entirely new deposit.
In this situation, a landlord may be left with a tenant who has lost their deposit and who also has an additional repair bill. If a tenant cannot meet the damages bill it will immediately put both parties into a difficult position as the tenant may feel frustrated and trapped. This scenario becomes known as the “stalemate impasse” – a position to which neither party can move without great financial pains, becoming almost impossible to agree on an amicable way out and often ends up in a courtroom; inevitably costing the landlord and the tenant dearly.

The cure

However, since Rent Safe UK introduced their specialist Tenant Contents Insurance landlords and tenants are actively recognising the benefits, where the weight of the consequences outweigh any form of cost.

For a very small monthly amount (which can be set up via direct debit), averaging around £9.20 per month, a tenant can protect their deposit and the rental property with a simple click of a button (click to get a quote now).

Landlords and Agents that use the Tenant Referencing UK application form can also nominate their tenant(s) for a contents insurance quote, to ensure that they’re protected from the outset.