Padraig Hyde & Sons,
Auctioneers, Valuers & Estate Agents,
Property Management & Maintenance Services.
117 North Main Street, Youghal, Co. Cork.
TEL: 0818 555 700
 024 - 91355
Email: info@hydeproperty.com

Security deposits and the end of a tenancy.

{ Posted on Nov 15 2010 by admin }
Categories : Property

The return of security deposits is often an area where conflict between tenant and landlord arises. Undoubtedly, it affects most parties at some stage and getting it right first time is of the utmost importance.

Nowadays, both tenants and landlords can refer disputes to the PRTB, who can either mediate or adjudicate on the issues involved. According to the most recent figures available, they registered 95,969 tenancies during 2009 with 234,582 tenancies registered altogether. This can be broken down into 116,000 landlords and 399,000 tenants. (Dublin had the highest concentration of tenancies at approximately 40% of the registered total and Cork County came next with 12%.)

Of the 234,582 registered tenancies, 1,859 dispute resolution applications were received in 2009, equivalent to approximately 0.79% of all registered tenancies annually. Whilst less than one in a hundred registered tenancies are therefore referred to the PRTB, the breakdown of these figures sheds some light on the issues involved – 4% relate to the standard or maintenance of dwellings, 9% relate to the validity of termination notices and a further 23% relate to rent arrears issued lodged by Landlords.

But by far the largest category relates to deposit retention issues, accounting for 51% of all applications received. Normally, deductions from a security deposit revolve around three or four main issues – outstanding rent & utilities, cleaning fees and damage to a property. It is the latter two which most often provoke disagreement and minimising the likelihood of disputes is in the interests of tenant and landlord alike.

Although one of the most common, cleaning issues are also one of the most avoidable. Prior to moving out, the tenant should always ensure that the property has been cleaned from top to bottom – this means cookers, fridges, microwaves, kitchens, baths, showers and toilets are all spotless. Floors should be swept, polished or hovered. Rubbish bins both internal and external should be empty as should any fireplaces or stoves. Furniture should be wiped clean including any countertops, shelving and fireplaces. Cushions should be removed from sofas and armchairs and any dirt underneath removed. Beds and furniture also need to be cleaned underneath and the property aired thoroughly.

Leaving an unkempt, unclean property behind means it is far harder to rent and prospective tenants will usually object to having to clean someone else’s mess. For the sake of a few hours work, departing tenants can save an enormous amount of hassle by cleaning the property methodically and avoiding any subsequent deductions from a security deposit in this regard.

However, the issue becomes far more complex when assessing potential damage to a property. Normally, tenants are expected to return a property to its previous condition at the end of a tenancy, excepting ‘wear and tear.’ But the issue of what exactly constitutes ‘wear and tear’ causes endless problems between tenants and landlords. As a term, it is open to interpretation and opinions unsurprisingly differ between tenant and Landlord over what constitutes damage as opposed to wear and tear to a property.

The first thing to note for tenants and landlords alike is that all objects depreciate over time. This includes houses and furniture. Outright damage however is usually far more noticeable such as cigarette burns in carpets, broken window glass or cracked mirrors.

Common sense usually dictates the difference between the two. Good quality, brand new furniture should not be in pieces after a six month tenancy. Small marks in walls from hanging pictures can be allowable – fist sized holes are not. Carpets can become worn from heavy use however several random rips and tears can often indicate carelessness. Tiled and timber flooring can innocuously suffer scratch marks from high heels or moving furniture. Cracked tiles or broken floorboards can indicate abuse. Whilst one light switch or plug socket may break during the course of a tenancy, having to replace them all would be unreasonable.

In deciding between wear and tear vs damage, it is vital to apply common sense, even if the working relationship between tenant and landlord has already been impaired. In the event that deductions are made for damages to a property, these should be reasonable and itemised to show what the deduction is for and what the cost of getting it repaired or replaced will be. Receipts or quotes should be included. Deductions are not a source of profit for landlords and the PRTB and courts will take a dim view of such instances.

One of the easiest ways to actually avoid problems is at the beginning rather than at the end of a tenancy. Before the tenancy begins, landlord and tenant should inspect the property and any defects noted in a property report signed off on by both parties. A report can often include items such as – “hole in carpet by living room door” or “black stain in couch on right hand arm rest.” Whilst it may seem excessive or pernicky, such a report can often alleviate disagreements over wear and tear after a tenancy has ended. In particular, such a report is useful when the recollection of a property’s original condition may differ between Landlord and tenant after a lengthy tenancy. Photographs should also be taken of all rooms and / or any defects found.

Generally, landlords will have to account for some wear and tear at the end of a tenancy. Tenants are usually more hardwearing on property than a homeowner is and whilst regular maintenance of a rental property is a financial drain on resources, it is also a long term necessity. Not alone will it keep existing and prospective tenants happy, it generally makes the property easier to rent whilst helping to maintain its eventual sale value.

The Irish Revenue also allow relief for wear and tear on furnishings & fittings. Based on the cost of the items, an allowance of 12.5% per year for eight years can be made (with effect from 4th December, 2002). This means that if furnishings and fittings for a property cost €7,000, an allowance of €875 may apply when calculating your annual taxable rental income.

The full PRTB report can be viewed here.

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