Tenancy Deposits : Why Landlords Can't Win

An unfortunate tale here, but one in which all landlords should be interested. It shows the challenges we (landlords and their agents) face on a daily basis, and also demonstrates why some 'accidental' landlords become so fed up with the whole process so quickly. With my lettings agent hat on, this is the sort of thing we often get a lot of criticism for, when in reality it's completely outside our control.

At the end of the tenancy, there's often a dispute between landlord and tenant regarding the allocation of the deposit. We encourage both parties to negotatiate and ultimately encourage landlords to settle - for reasons that are clearly visible below. Since 2007 all deposits have to be registered (by law) and if landlord and tenant can't agree at the end there's an 'independent' adjudication process. Here's what happened recently to one of our landlords - I've tried to be as objective as I can.

• The tenant had taken on a modern 3 bed property in very good order. It was decorated magnolia throughout.
  
• During the course of the 18 month tenancy, he had painted the whole place white, despite there being a crystal clear clause in the tenancy agreement prohibiting this. There was no need to redecorate - just personal choice.
  
• The paint job was patchy in places (more coats required). And he had splashed emulsion on the woodwork in every room.
• There was a tenancy deposit of about £800. The landlord sought the whole deposit on the basis that 1) they'd breached the tenancy agreement and 2) they'd made a right mess in the process.
• The tenant disputed the landlord's entitlement to any of the deposit.
• The adjudicator gave just £150 to the landlord, leaving him to foot the rest of the bill himself. 
• The full adjudication (with personal details removed) is viewable here.

From the landlords perspective, this is an absolute nonsense - the property has been fundamentally damaged by the tenant, but the award against the tenant is only £150.00. For the record, the tenant didn't pay the rent either and whilst this was eventually recovered through the courts, the costs of the proceedings were practically the same as the amount awarded. Whilst it's quite right that a landlord shouldn't be able to run off with a tenant's deposit, we now appear have turned full circle and ended up in a situation where a tenant can do pretty much what he wants and get away with it! Organisations such as Shelter who argue tenants need more protection really should be treated with a degree of skepticism!