This is a question to the blog clinic from Michelle who is a tenant.
Is my landlord able to lease the property to a new tenant, before refunding my deposit?
He stated that he was keeping my deposit to carry out repairs but someone else is living in the property without any said repairs being carried out?
Is he able to do this? Some of the complaints were dust, water marks, fingerprints dirt patches on the grass.
Answer
First – he’s not your agent. He acts for your landlord, so he’s the landlord’s agent.
A deduction should not be made from your deposit for something which was never done.
A deposit deduction is supposed to be to compensate the landlord for losses they have suffered due to the tenant breaching the terms of the tenancy agreement (and there needs to be a clause in the tenancy agreement authorising this).
However, if no repair or other work has been done and the property has been re-let at the same or a higher rent, then the landlord has not suffered any loss.
I suggest that you ask for proof of payment of the items claimed – if no receipts are forthcoming, then you should challenge the deductions by applying to your tenancy deposit scheme and asking for adjudication.
You will find instructions on the scheme website on how to do this.
hbWelcome says
June 6, 2017 at 8:47 AMI disagree.
It is up to the landlord to decide whether he wishes to repair the loss or not.
Re-let at the same or a higher rent is a complete red herring. By your logic, an outgoing tenant could nick a landlord’s fridge but if it is re-let fridgeless at a higher rent no loss has occurred.
I disagree.
Lawcruncher says
June 6, 2017 at 10:48 AMTo hbWelcome
There are special rules which apply to a tenant’s failure to comply with his repairing oblgations. See section 18 Landlord and Tenant Act 1927. It provides that damages for breach cannot exceed the diminution in value of the landlord’s interest . If a landlord can relet at the market rent without carrying out any repair he has suffered no loss.
Romain says
June 6, 2017 at 12:45 PMI would think that the landlord’s interest includes the value of the property. So whilst the landlord has relet at the same rent, arguably the value of the property has decreased by the amount it would cost to repair it.
Actually, I think that the ‘value of the reversion’ as stated in the LTA 1927 indeed means the value of the property, and I believe this is to be assessed on the date the lease expires.
If so, whether the property is re-let, and the rent, are not directly relevant with respect to s.18.
hbWelcome says
June 6, 2017 at 3:45 PM“If a landlord can relet at the market rent without carrying out any repair he has suffered no loss.”
That doesn’t follow Lawcruncher.
You have also clouded the argument to ‘market rent’.
In a buoyant market, a tenant can smash a place up and a landlord can still get the same rent for it unrepaired, if they are not particularly choosy about tenant. But the value of the property and the rent (or the tenant quality) are less than they would have been had the tenant not smashed it up- the landlord has suffered a loss.
Tessa is uncharacteristically wrong. Suggest she asks one of her deposit adjudicator guest bloggers.
John-Paul Keates says
June 6, 2017 at 4:29 PMThere may be some specific terms in the tenancy agreement – often to have the property or carpets professionally cleaned.
The landlord is entitled to compensation for any loss in value of their asset arising during the tenancy beyond fair wear and tear.
There is no parallel requirement for the loss to be made good – the cost of any repair or replacement is likely to be greater than the “loss” in most cases. The calculation of loss should include an allowance for the lifetime of use, it isn’t simply the cost of a new replacement.
In this case, the examples quoted sound like normal wear and tear. The tenant should dispute the proposed deduction and use the protecting agency’s dispute resolution process if the landlord doesn’t agree.
Tenancy Deposit Scheme says
June 6, 2017 at 4:54 PMDeposit deductions are compensatory, therefore it is the landlord’s choice as to whether they spend the money on repairing the property or not.
With regards to receipts, all deposit protection schemes operate in the same way:
Receipts and invoices are needed to illustrate costs for many types of claim, including, repairs or restoration, redecoration, replacement of damaging goods, gardening, cleaning and waste disposal that has been required. Receipts should be itemised with a breakdown of the costs being charged for each type of work undertaken.
Estimates and quotes may not be as strong evidence as invoices or receipts because they’re not showing a cost that’s actually been incurred. However the adjudicator will still take them into account as they show the extent of charges necessary to rectify any damage or deterioration, as the landlord doesn’t need to have completed remedial work in order to make a claim.
We go into this in more detail in our blog here, https://www.tenancydepositscheme.com/news/blog/ask-tds-is-it-reasonable-for-my-landlord-to-claim-money-from-my-deposit-without-a-cost-breakdown/
Romain says
June 6, 2017 at 5:33 PMI find it strange to say that “Estimates and quotes may not be as strong evidence as invoices or receipts because they’re not showing a cost that’s actually been incurred” if it is indeed “the landlord’s choice as to whether they spend the money on repairing the property or not.”
It would seem to me that the evidence must simply be of the existence of damage and of the cost of repair.
As a side note, an invoice shows that money has been spent but not necessarily that it is reasonable in relation to the required repair.
Anthony Stevens says
June 6, 2017 at 6:01 PMThis contradicts a similar query made to the TDS. A landlord is not obliged to use the award.
https://www.tenancydepositscheme.com/news/blog/ask-tds-can-landlord-keep-deposit-to-redecoration/
hbWelcome says
June 6, 2017 at 7:42 PMThanks Anthony.
For those that can’t be bothered to click the link;
‘The landlord may have decided to accept a lower rent rather than spend the money on replacing the carpet or accepted that the property may be more difficult to let. Regardless of the motivation, the landlord is under no obligation to spend the money making good the damage.’
Lawcruncher says
June 6, 2017 at 6:35 PMTessa’s comments are, for all practical purposes relating to BTL, correct. I would put it slightly differently by saying that if the rent obtainable for the property without the wants of repair is the same as the rent obtainable with the wants of repair then there is no loss. There is judical authority for this – do not ask me for the case name. The judge said that if a tenant leaves the premises basically sound, he can leave it a little tired because an incoming tenant would expect to have to spruce it up. Though the case was commercial, the principles are the same.
What we are talking about here is minor repairs which do not extend too far beyond fair wear and tear and which would not put off the average prospective tenant. There is clearly going to be a loss if the tenant casuses extensive damage.
Romain says
June 6, 2017 at 9:14 PMAs said, IMHO the value of the reversion really is the value of the property. And even without s.18 damage to the property affects the value of the property and thus that is the direct loss.
If the damage is minimal enough not to affect the value of the property and the rental value then fine,
Tim says
June 9, 2017 at 10:27 AMThe principals are not the same between Commercial and Residential use.
I would love to let a residential property on a fully insuring and repairing lease!
hbWelcome says
June 6, 2017 at 7:27 PM“Tessa’s comments are, for all practical purposes relating to BTL, correct.”
Clearly they are not.
As the practical post from ‘Tenancy Deposit Scheme’ practically shows how it works for practical purposes…In practice.
Hope Tessa will have the good grace to concede that.
As for going off on a tangent with an unsourced attempt at side tracking the issue.
– You are losing your touch Lawcruncher.
Lawcruncher says
June 6, 2017 at 8:48 PMTenancy Deposit Scheme’s post does not contradict Tessa’s and my point that a landlord suffers no loss if his rental income is not prejudiced.
Guest101 says
June 7, 2017 at 12:52 PMIt depends, the LL could suffer loss in time rectifying the issues for example.
Romain says
June 7, 2017 at 5:51 PMBut he does suffer a loss, as explained previously.
Guest101 says
June 7, 2017 at 12:51 PMI disagree also. If someone crashes into my car, I’m entitled to be compensated to the value of my vehicle, I don’t necessarily have to replace it. The principle is the same as far as I’m aware.
Lawcruncher says
June 8, 2017 at 11:08 AMSection 18 of the Landlord and Tenant Act 1927 says:
Damages for a breach of a covenant or agreement to keep or put premises in repair […] shall in no case exceed the amount (if any) by which the value of the reversion […] in the premises is diminished owing to the breach of such covenant or agreement […]
(Anyone who thinks I have left out anything relevant to this discussion can go and check the Act.)
Whatever the law may be with regard to anything else, the above is the law relating to breaches of repairing covenants by tenants.
So, at the end of a tenancy the question to ask is: Is the value of the property in its present condition less than its value if the wants of repair were made good? If the answer is “no” then the landlord is not entitled to damages. We are not talking here about a theoretical decrease in the value, but what the position would be in practice. Is it ever going to be the case that if you have a property with “a few scratches on it” that sprucing it up will secure a better price? Almost never.
You have to apply this test when assessing damages if reletting rather than selling. If a landlord, without carrying out, or agreeing to carry out, the repairs he wants damages for relets quickly at the current market rent, he is going to have difficulty persuading a court that he has suffered a loss.
hbWelcome says
June 13, 2017 at 12:19 PMNice theories Lawcrunch but we already have the definitive answer from the experts who actually decide these matters (and who the courts ordinarily defer to);
Tenancy Deposit Scheme says
June 6, 2017 at 4:54 PM
“It is the landlord’s choice as to whether they spend the money on repairing the property or not.”
Couldn’t be clearer.
rentfriend says
June 16, 2017 at 2:31 PMThis is my first comment on this blog and I would like to say thank you for the great articles. Tons of very useful information for each and every landlord.