How can landlords increase the percentage of deposit adjudications that go their way?
Deposits are, and always have been, a key part of the letting process. So we all know what they are, and how they should work. However, it’s rarely that black and white; perhaps more black and white, with a few stains and marks.
However, during the lifecycle of a tenancy, the biggest challenge often comes when the tenant moves out of the property and a dispute arises over the deposit, as the TDS have in the past confirmed themselves – few in the industry would disagree with this.
The Burden of Proof
When disputes do arise, the burden of proof now rests on the landlord or agent to establish the tenant was in breach of the obligations, and sums claimed from a deposit are reasonable costs incurred as a result of the tenant’s breach.
To enable an adjudicator to make a decision the following must be provided:
- Proof the landlord has acted honestly, fairly and without any undue bias
- Full signed tenancy agreement
- Robust, complete and defensible inventory
- Open and transparent supporting evidence.
Since its inception in 2007, the DPS has seen over 9,000 adjudications completed, and when you take a closer look at these further trends present themselves. Recent statistics emerging from the DPS show the outcomes of these adjudications: 44% were split, tenants won 38% of cases and landlords just 18%.
So why are landlords losing so many dispute cases?
The short answer is evidence. But there are ways in which landlords can redress the balance.
Spotlight on Inventory
The fact is the current paper-based inventory system favoured by most landlords and letting agents is hopelessly outmoded, and crucially, is failing to support landlords in disputes. Just take recent comments by the Association of Independent Inventory Clerks (AIIC) who brandished the non-digital approach as “not worth the paper they are written on” and “completely inadequate”.
The traditional means of collecting information presents a problem when trying to present the key details in a single report. The final output is then frequently found to be subjective and fails to stand up to the scrutiny of an adjudicator. However, with the aid of new technologies, landlords can now arm themselves with digital alternatives to aid their fight in tenancy deposit disputes.
The answer lies in digitising the process. By using digital inventory reporting systems downloaded to their smartphones or tablets landlords can begin to turn the tide, by guaranteeing the following is documented:
- All data is date/time stamped
- Photos are geo-located (latitude/longitude)
- Spaces, rooms, objects and observation are linked up
- Complete audit trail is logged of every step and process
- Everything is securely stored in the cloud.
Digital inventory systems also provide more opportunity to share information and allow comments from tenants, providing a platform for a more democratic and collaborative process overall.
This collaboration helps avoid claims from tenants of inherent bias in favour of the landlord. An adjudicator will look more favourably at a report where the tenant has actively been given the opportunity to add comments over one produced by the landlord alone.
With the spotlight glaring down upon it, the paper-based system is now under scrutiny, especially after AIICs comments. It is now time for the industry to make the move to wake up to the benefits of technology and redress the balance in the letting process.