Most tenants you ask have a story to tell about an unreasonable landlord. Disputes over repairs, deposits and rent increases are part of life for those in the private rental sector. But this one was different. “WITHOUT PREJUDICE AND SUBJECT TO CONTRACT,” his email began, ominously. “THESE DAMAGES WILL USE UP YOUR DEPOSIT AND MORE TO WHICH I WILL BE LOOKING TO YOU ALL.”
Over the next month, we fired dozens of emails back and forth. Mine were long, poised, imploring: surely we could come to an agreement based on the proper process? His were brief, rude, often capitalised: we were terrible tenants, the neighbours were glad to see us go, what did we expect?
Each week this went on the number only grew. First it was the whole deposit of £5,500 – six weeks rent on our six-bedroom house. By the end of the month it was more than £10,000, including £4,550 to redecorate the entire property and £5,089 on refurnishing the house, including complete sets of high-end furniture in eight bedrooms (two more had appeared since we’d left). This was “with out Legal Cost” he told us, solemnly.
Throughout our exchange he declined to provide inspection reports or photos to support his claims, instead attaching invoices drawn up by his contractors. “It’s down to you to make me an offer,” he said. “Litigate or negotiate.”
So we went to arbitration – your only option as a tenant with an unresolvable dispute short of a trip to the small claims court. The companies that protect your deposit are legally required to offer you a free dispute resolution service. You each submit a document: your landlord sees yours; you don’t see theirs. You have one shot – and no right to appeal.
I submitted our case on a Friday evening. It had taken quite some time to put together – and I’d benefited from the advice of friends with legal experience (“less righteous”). Four months on – half a year after we moved out – the ruling came back. The landlord had provided no evidence of anything more than “fair wear and tear”, the adjudicator confirmed. He was seeking what’s known in the industry as “betterment” – to use our tenancy to end up in a better position than when we moved in. We got our deposit back. After a moment of celebration and relief, I asked what they would do about our unscrupulous landlord. The answer was clear: nothing.
When I’ve told friends and colleagues this story I’ve discovered that, while my landlord’s behaviour was extreme, such experiences are common. After she moved out, one friend’s landlord splashed mud on the walls of her flat and claimed deductions – without realising she had taken had timestamped photos of the rooms when they were spotless. Another friend was threatened with legal action for disputing that standard end-of-tenancy cleaning and repairs should run into four figures. A former colleague told me they’d been threatened with eviction if they didn’t agree to replace a faulty washing machine.
While there isn’t accurate data, a poll by Tenants Voice suggested 30 per cent of tenancies end in deductions, with 13 per cent of tenants losing their entire deposit. Another found that 29 per cent of tenants lost their whole deposit and estimated that deductions could amount to as much as £1bn per year. A fifth of tenants say that they have had their deposits unfairly deducted.
Why do landlords get away this behaviour?
If a tenant wants to report an errant landlord, it’s not easy to work out where to go. Unlike restaurants owners, market traders and taxi drivers, most landlords in England need no licence to operate (they do in Scotland, Wales and most other countries).
Many are not even registered. My old landlord owns more than thirty residential and commercial properties in my borough, but when I contacted the council they said there was little they could do: I should take it up with my deposit protection company. But while the arbitration system worked well in my case, the three companies created in 2006 to protect deposits are funded by… landlords. According to The Rent Trap, by Rosie Walker, the one chosen by my landlord – somewhat ambiguously called MyDeposits – for a long time had the dubious honour of being the only scheme which allowed landlords to keep their tenants’ money in their own account and earn interest on it. No help there either.
“First and foremost, there is no accountability,” says Ben Yarrow, founder of Marks out of Tenancy, a new platform for rating and reviewing landlords, agents and properties, which aims to fill this gap. Whereas on Airbnb you’d expect to see a rating and several reviews before booking a stay in a stranger’s house, tenants sign year-long contracts without any information about a landlord’s past behaviour. This means landlords might as well try it on. Seeking betterment is a one-way bet.
And it’s a bet landlords often win because tenants in the UK have weaker rights and more limited access to advocacy than tenants in most wealthy countries. Tenancies are much shorter – six to twelve months, on average, compared with four to six years in Italy and Germany – and tenants in England can still be evicted with two months’ notice having committed no-fault, although the government has announced plans to end this. Whereas in Germany renters are organised into powerful unions, with over 3 million members, many in the UK don’t know where to go. The arbitration system seems opaque and risky. Those who are less aware of their rights, unwilling for various reasons to take on landlords or simply need some money back quickly for their next house make for easier targets.
In New South Wales, Australia, deposits are protected by a state-run company entirely funded by the interest earned on them (some AU$56m), which also covers tribunals, free advice and advocacy for tenants. Lloyd Russell-Moyle, MP for Brighton Kemptown – otherwise known for grabbing the parliamentary mace – recently introduced a ten-minute bill calling for the UK to adopt this model, using the £4bn currently held by deposit protection companies. After the speech, a cabinet minister crossed the floor to tell him it was a sensible idea.
Cross-party efforts to improve tenants’ rights such as this are especially overdue because the nature of private renting in Britain has changed: 11 million people in the UK now rent their homes from private landlords. The number of privately rented homes has increased by almost two thirds in the last decade, driven by social housing cuts and rising property prices. By 2025, half of under 40s will still be living in properties owned by private landlords, while, according the Resolution Foundation think tank, a third of millennials face renting from cradle to grave. What was once considered a stopgap has become a long-term reality for many, including families and the elderly. It’s time the law and policy caught up.
Tom Sasse is a senior researcher at the Institute for Government. He is writing in a personal capacity.