Landlords need fair rules when calculating compensation

AFS Team·12 January 2015·4 min read
Landlords need fair rules when calculating compensation
Landlords could save themselves lots of trouble if they could calculate the correct compensation charges when a tenancy comes to an end rather than entering an unnecessary dispute with a tenant, says one leading organisation.
The Association of Independent Inventory Associations (AIIC) says that landlords, as well as letting agents, should have knowledge of what the acceptable principles of calculating compensation charges are.
By doing so they will avoid disputes and be able to explain to their tenants how they came to the compensation calculation.

Claimed compensation should be ‘fair’

The Association says that the compensation claimed should be fair and reasonable though everyone's expectations of what the figure should be, they state, is likely to be different.
The AIIC's chair, Pat Barber, said: “All parties would be happier to accept proposed deductions if landlords and agents could prove how they arrived at their figure. This would mean fewer disputes and headaches and less time, effort and money being wasted.”
Ms Barber says there are some details that landlords and agents need to begin their calculations; the item’s original cost as well as the age and condition of it when the tenant checked in.
They also need to know the life expectancy of the item they are claiming for, the circumstances for the damage and the length of the tenancy.

Floor coverings are source for compensation disputes

One big issue for disputes is that for floor coverings with accidental damage accounting for 42% of insurance claims.
Ms Barber says that many landlords and agents would consider tenant damage of laminate or vinyl flooring if there are scratches, burn or drag marks or stains and that these would be chargeable issues.
However, some of these scratches and indentations could be considered as fair wear and tear depending on the floor's original condition and the length of the tenancy itself.
The AIIC is recommending that landlords and agents give tenants care instructions for such flooring surfaces.

Things to consider when calculating deposit deductions

The Association is also highlighting that any final compensation amount agreed will also be influenced by things such as previous wear and tear issues, household circumstances and whether the tenant has pets.
Ms Barber explains: “Tenants and landlords should put all the evidence together to reach a conclusion that can be justified in writing, if required. Landlords should also provide written evidence of the original item’s cost and the age as well as anything else in the property to enable a compensation figure to be calculated.”
To help agents and landlords, the AIIC has published a book entitled 'Understanding fair wear and tear' which costs £9.99.