Deposit deductions
Deposit deductions are amounts a landlord proposes to keep from a tenant’s tenancy deposit at the end of a tenancy, instead of returning it in full. In England and Wales, the deposit is the tenant’s money unless you can show you have suffered a loss under the tenancy agreement, so every deduction needs a clear reason and evidence.
Typical deductible items include rent arrears, damage beyond fair wear and tear, missing items, and reasonable cleaning where the rental property is left dirtier than at check-in. Deposit scheme adjudicators must allow for fair wear and tear, so charging for “as new” condition is usually treated as betterment. Where something has a limited lifespan, for example, carpets or paint, deductions are commonly reduced using apportionment for age and condition.
The best protection is paperwork, including a signed inventory and check-in report, dated photos, invoices/receipts, and a check-out report. Keep a repairs trail too, contractor quotes, work orders, and communications showing the tenant was on notice. If you cannot evidence the original condition, schemes often refuse the claim.
Process also matters. Provide a draft proposal promptly, itemised and costed, and try to agree it before escalating. If you are in a Tenancy Deposit Scheme with Alternative Dispute Resolution (ADR), the scheme’s adjudicator will decide based on documents, not opinions, so concise evidence wins.
Finally, remember the wider legal context. Tenancy deposits are capped by the Tenant Fees Act. From 1 May 2026, the Renters’ Rights Act in England removes Section 21 notice and links possession order outcomes to deposit protection compliance: courts can refuse a possession order if the deposit is not protected in an approved scheme or has not been returned. That makes fair, well evidenced deductions and swift repayment of any undisputed balance part of your core risk management.
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