When a tenancy ends, one of the most common sources of friction between landlords and tenants is the deposit. Tenants want it back. Landlords want to recover costs for damage or unpaid rent. The law allows deductions, but only in specific circumstances and only with proper evidence. Here is what you can and cannot deduct.
Unpaid Rent
If the tenant owes rent at the end of the tenancy, you can deduct the outstanding amount from the deposit. This is usually straightforward provided you have clear records showing what rent was due, what was paid, and what remains outstanding. Keep a rent schedule or ledger that shows every payment received throughout the tenancy. Bank statements alone may not be enough if the tenant disputes the figures.
Damage Beyond Fair Wear and Tear
You can deduct the reasonable cost of repairing damage that goes beyond fair wear and tear. This is the area that causes the most disputes. Fair wear and tear means the normal deterioration that occurs through everyday use. Scuff marks on walls, slight carpet wear in hallways, and minor marks around light switches are all examples. You cannot charge the tenant for these. However, holes in walls, burns on carpets, broken fixtures, and stained worktops from misuse are damage beyond normal use. You can deduct the cost of repairing or replacing these items, but you must account for the age and condition of the item at the start of the tenancy. If a carpet was already five years old when the tenant moved in, you cannot charge for a brand new carpet — you must apply a reasonable reduction for its existing age and wear.
Cleaning Costs
You can deduct cleaning costs if the property is returned in a worse state of cleanliness than at the start of the tenancy. If the property was professionally cleaned before the tenant moved in and that standard was documented in the inventory, you can reasonably expect it to be returned to a similar standard. If the tenant leaves it significantly dirtier, you can deduct the cost of professional cleaning. You cannot charge for cleaning that simply returns the property to a better condition than it was in at the start.
Missing Inventory Items
If items that were present at the start of the tenancy are missing at the end, you can deduct the replacement cost. This includes things like keys, remote controls, curtain poles, light fittings, and any furnishings listed on the inventory. The deduction should reflect the value of the item at the time of the tenancy, not the cost of a brand new replacement, unless the item was new at the start.
Breach of Tenancy Terms
You may be able to deduct costs arising from a breach of the tenancy agreement. For example, if the tenant was responsible for maintaining the garden and left it in a severely overgrown state, you could deduct the cost of restoring it. If the tenant redecorated without permission and the work was done poorly, you could deduct the cost of putting it right. The tenancy agreement should clearly set out the tenant's obligations.
What You Cannot Deduct
You cannot deduct for fair wear and tear under any circumstances. You cannot charge for improvements or upgrades to the property. You cannot deduct costs that are your responsibility as a landlord, such as structural repairs or appliance breakdowns due to age. You cannot make deductions without evidence, and you cannot make blanket charges that are not tied to specific items of damage or loss.
The Importance of Evidence
Every deduction you make must be supported by evidence. This means you need a detailed check-in inventory with photographs and descriptions of the property and its contents at the start of the tenancy, a check-out report at the end of the tenancy, dated photographs showing the condition at both stages, and receipts or quotes for repair or cleaning costs. Without this evidence, any deduction you propose is likely to be rejected if the tenant disputes it through the deposit scheme's alternative dispute resolution process.
Check-In and Check-Out Reports
A proper check-in report is the foundation of any deposit deduction claim. It should document every room, every surface, and every item of furniture with written descriptions and photographs. The check-out report should mirror this so you can compare the two side by side. Without a check-in report, proving that damage occurred during the tenancy is extremely difficult.
Take Action
Protect yourself with proper documentation from day one. Generate your complete document pack including inventory templates and tenancy agreements that clearly set out tenant obligations. Read our guide on How to Return a Tenancy Deposit Correctly and use the Deposit Cap Calculator to ensure your deposit amount is within legal limits.