Deposit reductions 'must be justified'

News Category: Legal

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Reductions made to a letting applicant's deposit need to be justified by the landlord or letting agent, an expert has suggested.

Speaking at the Landlord and Buy to Let Show held at the Birmingham National Exhibition Centre this month, learnletting property management consultant Paul Farndon advised landlords that they can only deduce a reasonable cost from a potential tenant's deposit at advanced notice.

However, tenants should be penalised and landlords cannot just state that the deposit is non-refundable, Mr Farndon continued.

"It is a penalty on the applicant to say you will take £200 off them and if they don't go ahead, you will keep it," he said.

Property owners might be required to justify their deposit deductions if a tenant complains to their local Trading Standards office, the expert noted.

Statistics published by mydeposits.co.uk last month showed that 38 per cent of deposit disputes between landlords and tenants involve cleaning costs.

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