Damage and compensation
Paul Jager

Paul Jager

Damage and compensation

What do you need to do if tenants have damaged a property? Paul Jager considers the agent’s obligations.

Agents who manage property have to deal with the return of the deposit at the end of the tenancy. This isn’t always as easy as it sounds.

An agent must be in a position to ascertain what the tenant was obligated to do under the terms of their tenancy agreement. Then there is the question of assessing whether they had failed to undertake these obligations in any way.

This can include:

  •  defining fair wear and tear
  •  assessing damage
  •  ensuring neither landlord nor tenant is unfairly disadvantaged at the end of the tenancy

Obligations

These depend on the initial terms of business with the client. What were the role and responsibilities of the agent? These are usually to:

  •  establish if the tenant has been in breach of any requirements of the tenancy
  •  assess any damages to the property, and prepare a schedule of costs for their restitution
  •  assess whether those damages are the responsibility of the landlord or the tenant

The requirements that the tenant must fulfil will be listed in the tenancy agreement that was signed at the commencement of the tenancy. This, together with any agreed addenda added during the course of the tenancy.

These requirements will deal with the obligation to:

  •  look after the property
  •  return it and all of its contents in a clean and orderly fashion
  •  return it in a comparable position to when the tenant took it on (subject to issues of fair wear and tear)

In addition, there will be the requirement to pay the rent as agreed, plus any other charges and costs (such as utility bills) which may have arisen during the course of the tenancy.

It is the agent’s job, if managing a property, to be aware of all the relevant clauses in the tenancy agreement and thereby be in a position to judge if the tenant has failed to adhere to any of them, for example:

  •  a failure to pay all due rent
  •  a failure to leave the property clean or the garden neatly trimmed
  •  damage that the tenant has caused to the fixtures and fittings

If it can be proved that the landlord has suffered a loss as a result of a failure of the tenant to adhere to any of the conditions of the tenancy, the landlord may be entitled to compensation from the tenant’s deposit.

The primary pieces of evidence when attempting to prove a loss will be:

  •  the tenancy agreement
  •  the inventory and schedule of condition
  •  the check-in and check-out reports.

Rent arrears are simple to calculate. However, the Dispute Service has published these figures showing what issues occur most frequently in disputes:

  •  cleaning – 52% of disputes
  •  damage – 45%
  •  redecoration – 28%
  •  gardening – 12%
  •  rent arrears – 18%
  •  other issues – 56%

(Source: The Dispute Service Annual Review 2012)

These issues are more complex to resolve than non-payment of rent, and usually require recourse to further evidence and documentation. This may include the following:

  •  addenda to the tenancy agreement agreed during the tenancy, relating to changes to the property, such as permission to redecorate
  •  inventory and schedule of condition
  •  reports of property visits
  •  communications from tenants during the tenancy, regarding the state of the property
  •  receipts and invoices from the landlord showing age and cost of items
  •  evidence of work undertaken on the property during the tenancy

This is just a short primer to the subject of tenancy damage and compensation. There is still the question of fair wear and tear, remedies for damage and ‘betterment and apportionment’.