The Deposit Diaries: Importance to agents of providing unambiguous tenancy agreements

Welcome to the first edition of The Deposit Diaries, where the director of dispute resolution at TDS, Michael Morgan, discusses a recent decision by one of its adjudicators and sets out the reasoning behind the decision.

In this case, the agent proposed a deduction from the tenant’s deposit to cover the payment of the check-out fee, referencing a clause in the tenancy agreement which outlined the tenant’s responsibility for this payment.

The tenant disputed the payment because an alternative clause in their tenancy agreement required the check-out fee to be paid by the landlord. They also argued that the clause did not specify an amount and they could not be required to pay a charge for an undisclosed amount.

The agent countered this argument by stating that the two clauses, taken together, meant that the landlord and tenant should pay half each. The evidence provided by the agent also included an invoice from the inventory clerk which matched the sum that was being claimed from the deposit.

As the tenancy agreement required both parties to pay, the clauses were deemed to be ambiguous and therefore the adjudicator could not conclude with any certainty that the obligation to pay the check-out fee in full was the tenant’s. As a result no award was made to the agent.

Conclusion

This case highlights the importance of clear and correct clauses in tenancy agreements and reinforces the need for all parties to thoroughly check the tenancy agreement to ensure they fully understand their responsibilities.

The natural path of a tenancy deposit is to be returned to the tenant, the responsibility is therefore on the landlord or agent to provide sufficient evidence to prove that a loss has been suffered and relevant deductions awarded.

If the tenancy agreement is ambiguous, this may well stop a landlord or agent from successfully claiming from a deposit.

* The Tenancy Deposit Scheme (TDS) is the only not-for-profit government approved scheme for the protection of tenancy deposits, offering both insured and custodial protection, plus adjudication for disputes

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One Comment

  1. David M

    This is a great post and highlights the ridiculous clauses that can be found in some tenancy agreements.I am flabbergasted how few Letting Agents actually review their Tenancy agreements regularly.  With the impending fee ban we will see more copy & paste agreements hitting the industry without any expert knowledge being utilised.

    Ironically this particular example will soon become a mute point as Tenants will not be liable for fees such as a check-out fee.   One would imagine that moving forrward as the cost of the Check-in & Check-outs is not split between the parties, that some parties will view the inventory clerk will become an “Agent” or “Representative” of the landlord and as such the reports may not be as impartial as they should be.

    One would suggest that it would be sensible for the AIIC and other bodies to say something in response to the proposed Tenant fee ban; and probably the Landlords associations given they might be losing their ability to ensure fair deductions from Tenant’s deposits still proceed.

    Just saying…

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