Assessing Damages at the End of a Tenancy

17 January 2024

At the end of a tenancy, the property must be assessed for any damage and fair wear and tear.

Relevant Documents

Agents should consult various documents when looking at damage claims at the end of a tenancy:

  • Tenancy agreements
  • Inventories and schedules of condition – the inventory sets out the condition of a property, fixtures and fittings and contents at the start of a tenancy and should be approved by the tenant
  • Check-in and check-out reports – it is best practice for the tenant to be checked-in with an inventory provider. Likewise, the tenant should be invited to attend the check-out which should happen as soon as possible after the end of the tenancy (although the tenant does not have the right to attend). Check-out is conducted against the inventory. Any damage, missing items, changes to original condition and cleanliness level must be noted.

Fair Wear and Tear

Fair wear and tear is the gradual deterioration or 'damage' that occurs to the rented property and its contents, fixtures and fittings through a tenant's normal and reasonable use.

Agents and landlords must allow for fair wear and tear when assessing damages. Tenants cannot be expected to be liable for wear and tear unless it was caused by negligence or misuse. Fair wear and tear is based on the number and ages of occupants, the length of the tenancy, the age and condition of items at the start of the tenancy and the life expectancy of the item concerned.

The Agent’s Role

The agent should, if part of their terms and conditions, assess damages at the end of a tenancy. If a check-out report is prepared, the agent should compare this with the original inventory to identify discrepancies. There must be a clear distinction between:

  • Fair wear and tear
  • Repairs that are the responsibility of the landlord
  • Damages that are the responsibility of the tenant – these items should be assessed for cost taking into account fair wear and tear.

The agent should prepare a schedule of costs for the landlord.

Allocating the Deposit

An agent can only hold the deposit for the landlord if:

  • There is no AST, and
  • The provision is provided in the agent’s terms of business.

Where the agent holds the deposit, they must await instructions from the landlord regarding disposal of the deposit.

Where there is an AST, the deposit must be protected. If the agent is a member of an insured deposit protection scheme, the deposit must be held as a stakeholder. If the tenancy is not an AST the deposit can also be held as a stakeholder if stated in the terms of business.

If the deposit is held as stakeholder, the agent is obligated to dispose of the deposit in line with the written agreement of both the landlord and the tenant. Once the landlord has reviewed the schedule of costs provided by the agent, it should be forwarded to the tenant. If an agreement is not reached, the matter will be decided by the tenancy deposit protection scheme adjudicators, independent arbitration or a court application.

Any undisputed amount of deposit should be passed to the relevant party as soon as possible.

A landlord may decide to waiver costs for missing or damaged miscellaneous items, which should be confirmed in writing. If not, the courses of action are:

  • Cleaning or repair
  • Compensation for reduction in value of an item
  • Replacement of damaged items - the agent should calculate the amount that the tenant is liable to pay.

About Domus Software

This article is published by Domus Estate and Letting Agency Software.

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