What is a tenancy deposit actually for?
Most people involved in renting know what a tenancy deposit is;
Money is paid at the beginning of a tenancy and, assuming everything is as it should be at the end, it is returned.
In most cases, it’s fairly straightforward. But what happens when everything isn't quite as it was?
Perhaps a carpet has been damaged, or the property needs cleaning, or something needs repair or replacement.
What is the deposit there to cover?
A deposit provides the landlord with financial protection against certain losses for which the tenant is responsible.
That doesn't make it a fund for returning the property to brand-new condition between tenancies, nor is it a fallback for the tenant to pay the last month’s rent.
A carpet may have been several years old when the tenancy began. If it’s subsequently damaged, the fact that it wasn't new doesn't necessarily mean there has been no loss.
Equally, damage to an older carpet doesn't automatically entitle the landlord to the cost of replacing it with a new one.
The same distinction works in the other direction.
Paying a deposit isn’t an alternative to returning the property in the condition reasonably expected of a tenant. It doesn’t absolve them of responsibility for how the property is left, nor is it there to pay the final month's rent simply because it’s more convenient.
Landlords and tenants each have responsibilities. Where a tenant’s responsibilities haven’t been met, the landlord may have suffered a legitimate loss. The landlord is entitled to protection against that loss, not to be put in a better position at the tenant's expense.
Properties require maintenance. Items age. Decoration deteriorates. Normal occupation leaves its mark.
The purpose of a tenancy deposit isn't to fund everything that needs attention at the end of a tenancy.
It protects against legitimate loss arising from the tenant’s responsibilities.
Some costs belong to the tenancy, while others simply come with owning a property.
If you’d like to discuss having your rental property professionally managed by Property23, get in touch by phone or email.