With the social distancing measures introduced in response to the COVID-19 pandemic, many landlords have found it difficult to carry out normal processes associated with tenancy.
As a leading tenancy deposit protection (TDP) provider, Tenancy Deposit Scheme (TDS) have received many questions from the private rented sector (PRS), since the lockdown came into force, on how to manage tenancy deposits from a distance.
Tenancy Deposit Scheme is supporting landlords, letting agents and tenants with a dedicated TDS COVID-19 FAQ web page. Our online resources help to answer some of the more frequently asked questions surrounding pretenancy, mid-tenancy and end-of tenancy situations.
Will the deposit cap be an issue?
Many landlords are confused about how the deposit cap legislation will affect them if they offer a temporary reduction in rent to tenants suffering financial difficulties as a result of Covid-19. You should be clear with the tenant whether this is a temporary or permanent measure.
If you intend to absorb the shortfall of the temporary rent reduction, the deposit amount is still based on the original annual rent value when the agreement commenced. The deposit cap affects any new or renewed tenancy agreements at the time the agreement is made, which means that you wont fall foul of the legislation in this circumstance unless you agree a new rent amount under a new tenancy agreement.
TDS recommend, in many of these cases, to keep a comprehensive audit trail of communications between landlord and tenant. The aim is to protect yourself from a dispute down the line, so be crystal clear about the action you have taken and the motivation behind it. Collate as much evidence as you can to support any future claim.
What about delays to check-out inspections and deposit returns?
Landlords are naturally concerned about how and when to conduct check-out inspections when they can’t easily be carried out during lockdown.
It may be that the landlord and tenant agree to do a virtual walk-round of the property via video to complete the check-out before the tenant leaves the property. It’s certainly not ideal but it will give a general sense of the property’s condition that will suffice for the return of the deposit. Again, TDS advise the landlord to keep details of how the check-out was conducted remotely and what it covered.
If there are delays to the end-of tenancy check-out inspection, this will affect when a deposit is returned, too. It is clear that agents/landlords should not be conducting checkout inspections with tenants in the property and the landlord/agent will need to consider whether it is safe to conduct a property inspection of the empty property. The Government’s guidance suggests that inspections of empty properties are possible in urgent cases.
TDS suggest that any such inspection should only take place sometime after the property has been vacated to minimise the possibility of any virus transmission. Agents will also have their own health and safety policies to consider.
If there is a dispute between the landlord/agent and the tenant about the condition of the property where there is not yet a checkout report, TDS will review what evidence, if any, is available. In recent weeks we have been successful in negotiating a settlement between the parties in the absence of a checkout report.
These are just some of the many questions being answered each day by the customer operations team at TDS from landlords, letting agents and tenants. They are keen to stress that the answers may well change as new government guidance is issued on a day to day basis, and that they can only offer guidance. As an impartial organisation, TDS can’t give any advice beyond which is clearly stated by the government or law. It is ultimately up to the parties in the tenancy agreement as to how they wish to proceed in any given situation.
Tenancy Deposit Scheme advises all parties to visit the TDS COVID-19 FAQs web page regularly for updates.
To support the FAQs, TDS are running a series of #AskTDS blogs about each stage of tenancy in light of COVID-19.