The subject of lodger deposits has always been one of a great many grey areas for both landlords and tenants.
Given the fact that every penny of the deposit money technically belongs to the tenant or lodger, and that deposit disputes can take time and money, it is in everyone’s best interest to ensure both sides fully understand their rights and obligations.
From carrying out a comprehensive check-in inventory at move in, to knowing your rights as a landlord, letting agent or lodger – we explore how to negotiate the return of the lodger deposit.
What is the Difference Between a Lodger and a Tenant?
The difference between a lodger and a tenant is:
- A tenant pays rent and lives in a property you own but do not live in
- A lodger lives in the same property as you and pays rent
Negotiating the return of a deposit if you are a lodger, living in student halls or living at the same property as your landlord is a slightly different process to that of the standard rental property tenant.
The most important difference in regard to rights, is that landlords and letting agents are not required to place a lodger deposit into a deposit protection scheme.
In comparison, lodger agreements are called licenses rather than tenancy agreements and landlords are legally permitted to give a reasonable notice period anywhere from 14 days to 28 days. The time period should be set out in the original license and agreed upon by both landlord and lodger.
How Much Is A Deposit?
A standard lodger’s deposit tends to be one month’s rent. However, this isn’t fixed and some landlords and letting agents demand up to 6 weeks.
Negotiating the Return of a Lodger Deposit: First Steps
When the time comes to begin negotiating the return of a deposit, the first step is for the lodger to request the return in writing. Lodgers should write directly to the landlord and ask them to return the deposit, being sure to keep copies of all correspondence in both directions. You may be required to produce evidence of such requests at a later time, so it’s a good idea to hold onto them.
The best time to return the deposit to a former lodger is after they have moved out with their possessions and you have checked the room thoroughly for any damage.
Lodger Deposit Protection
What’s different about this particular scenario is the way in which lodgers are not considered short-hold tenants, which means the landlord is not under any legal requirement to protect deposits using an appropriate tenancy deposit scheme. This doesn’t necessarily affect lodger’s actual rights when it comes to the deposit in general but can affect the negotiation and deposit return processes.
Establish a Deadline
Most professional landlord inventory services in the UK agree that problems generally occur when lodgers are not direct and/or demanding enough when it comes to requesting what is rightfully theirs. If the deposit should have been returned but has not, the best course of action is to begin with a written request for its immediate return with a specified deadline – something like two weeks.
Lodgers can also take the opportunity to ask in the letter why the deposit has not yet been refunded, along with whether or not they can expect any deductions to be made and the respective reasons.
If unsure how to go about this, there are plenty of useful templates available online.
Lodger Deposit Disputes and Deductions
As a lodger landlord, you are required to clearly list and explain any deductions to be taken from the deposit. If you fully agree with your lodger that the deductions are fair, you can confirm your agreement and arrange for the remaining deposit to be refunded.
If deductions are made, though no breakdown or explanation is provided, lodgers can request that this is done urgently. And if there are any deductions you do not agree with, you may need to dispute the deposit.
What are Reasonable Deductions?
Landlords and letting agents can deduct money from the lodger’s deposit if the lodger has any outstanding rent or if they have caused any damage to their rented living space. Damage above the level of fair wear and tear could include damage or stains on furniture or furnishings or missing items from the inventory.
Lodger Agreement Deposit Return: Court Action
From time to time, disputes cannot be resolved through talking alone and you may find that your lodger takes court action. Lodgers can also claim online through the Courts & Tribunals Service.
For a claim to be successful, it will need plenty of documented evidence of attempts to recover the deposit manually, as well as evidence in regard to the condition of the rented space at check-out.
Landlords do have the option of making an offer before the case proceeds any further.
Don’t Skip the Inventory Report
One way to ensure the return of the lodger deposit goes smoothly, without resorting to the courts is to have a detailed inventory report in place.
- Provide evidence of the condition of the room or property at the start and end of the lodging period
- Provide evidence of the condition of furniture and furnishings
- Provide lodgers with check-out information to minimise disputes
If you’re a resident landlord or a letting agent looking to take the stress out of the inventory process, find out how No Letting Go can help with our wide range of property inventory services.