Suzy Hershman, Head of Dispute Resolution at NRLA partner mydepositsm explains the main reasons for student deposit disputes, how landlords should approach negotiations, and how can disputes can be avoided.  

Letting your property to students can be rewarding both financially and in knowing that you are providing a young adult with a safe and comfortable home. For most, this will be a whole new experience, so it is important that, as their landlord, they understand exactly what you expect from them right from the start and throughout the tenancy.  

NRLA deposit protection provider, mydeposits, is the preferred scheme for a growing number of letting agents, corporate landlords and student accommodation providers who specialise in renting to student tenants.

This article aims to inform landlords who rent to students, or are considering the idea, about the most common causes for end of tenancy disputes, the best way to avoid them or what to do if you do find yourself in dispute. 

This guide will cover: 

• The main reasons for student disputes 
• A case study with learning points  
• Approaching negotiation by using supporting evidence with the aim of avoiding a dispute  

While purpose-built student accommodation has increased over the last few years, demand still far exceeds supply. HMO rents are likely to continue rising due to these supply constraints, yet privately rented HMOs and other privately rented student properties remain the more affordable option for most UK students compared to new purpose-built student accommodation, which exceeds most budgets.  

In fact, there has been an increase in the proportion of students renting from private landlords, with 46% of students saying they rent from private landlords in 2023 in the annual National Student Accommodation Survey, compared to 40% the previous year. If you have a property in an area with a large student population, letting to students offers landlords a stable and reliable income. But it does come with a higher possibility of issues needing negotiation when the tenancy ends.  

Given the continued popularity of rented properties, it is important for student landlords and agents to make sure they comply with all their responsibilities, providing a safe living environment and reducing the potential for any dispute when the keys are returned at the end.  

Being prepared and knowing what the most common causes of disputes are puts you in the best position for a smoother transition to the next tenancy. 

The most common reasons for student deposit disputes 

Around 30% of tenancies end with landlords claiming some level of costs from the tenant, but as few as 0.3 per cent end in a dispute. While disputes occur for a variety of reasons, mydeposits’ research shows that where the tenant is a student these tend to be for the same reasons as any other tenant, which could be avoided or at least reduced, by good communication and diligence from both landlord and tenant.  

Top tip: Giving your tenants advice on how to look after the property before and during the tenancy shows them you care about their welfare and is proven to make them a more considerate tenant. 

The top three reasons for student deposit disputes are: 

1. The required standard of cleaning - 27%

Cleaning is the most common reason for end of tenancy negotiations and disputes across all tenancies (27% of mydeposits Custodial disputes were caused by cleaning at the time of writing - September 2023), and this is significantly higher for student tenancies. Cleaning is very subjective, and it’s important that the student tenant understands their responsibility, which is to leave the property cleaned to the same standard as when they moved in. 

It’s your responsibility as the landlord to make sure they understand this. Just offering your student tenants the following advice, right at the start, can help to keep things in check. 

Read the check-in inventory report carefully 

The inventory/check-in report is important for both parties as it contains evidence of how clean the property is at the start. Tenants should then be given the first seven days to check the report for any differences in writing, which is usually by email. Tenants need to understand that this is important and in their best interests to protect them and it will kept on record. 

Set up a cleaning rota 

The lack of regular cleaning nearly always causes problems, especially in a shared property. The secret, for everyone’s benefit, is to recommend that your tenants: 

• Create a cleaning rota for shared areas like the kitchen, bathroom and lounge 
• Have a shared fund for cleaning materials like bin bags, bleach and detergent 

Look out for damp 

Poor ventilation, cooking or drying clothes on radiators can often cause condensation. Remind tenants that when they cook or shower/bath to open windows, always use vents or extractor fans and wipe down any condensation afterwards. Encourage tenants to buy clothes drying racks if there is no other option for drying clothes and ask them to make sure the air can circulate near the radiator. 

If left, condensation can result in damage to the property, presenting as damp and/or mould, which they may be responsible for putting right.  

Ask them to keep an eye on other rooms too and report any damp or mould as quickly as possible to help reduce damage and to avoid the likelihood of a compensation claim. 

Top tip - Mid-term property visits can help to spot and minimise any on-going problems. 

Clean before they move out 

Once you know the tenancy is ending, remind the tenants to check the standard of cleaning noted in the check-in report so they have every opportunity to leave everything clean, to the same standard. Some landlords/agents offer a pre-end of tenancy inspection to discuss what may need doing.  

Tenants may agree to attend the checkout inspection but if not, and they have any issues they want to raise, they should take digitally dated photographs as evidence. 

Communicate 

If there is a good relationship with the tenants during the tenancy, and good comparative evidence from the beginning and end, any negotiation on proposed cleaning costs is more likely to end in a compromise, allowing everyone to move on.

2. Repairs and redecoration (including damage) - 38%

As we have commented, many students play hard as well as study hard! Having fun, and simply not looking after the property often causes some damage, no matter how small. If we combine repairs and redecoration (which includes damage), they actually total a higher percentage of disputes than cleaning (38% in total - with repairs accounting for 21% and redecoration 17%). 

Most student accommodation in the private sector will have multiple occupancy, so the level of wear and tear in the property will be higher, with the need to replace certain items such as carpets, curtains, blinds and beds, as well as redecorate, more often than normal.  

Reasonable wear and tear does not apply to damage caused by accidents or neglect, so here’s a basic list of things you should tell students as soon as they move in: 

Read the check-in inventory 

Carefully inspecting the entire property and making sure any issues or damage are included in the check-in inventory is crucial, no matter how small they seem. If there is anything to add, the tenant should advise you or the agent as soon as possible, in writing. This should include any evidence of smells. 

Avoid smoking in the property 

Most, if not all, tenancy agreements contain a ‘no smoking’ clause for the rooms in the property, and no smoking is allowed in any communal areas at all. If there is any smell or other signs of smoking when the tenancy ends, this should be described in writing in the check-out report and can be classed as damage. Tenants may be responsible for the cost to make good, whether it is décor, replacement sofa or cleaning to remove smells, which can all add up. 

Beware the blu-tack! 

To make a property feel more homely, students often put up posters or pictures on the walls using blu-tack or a similar product. While they seem relatively harmless these products can pull paint or even paper off the wall and even if they don’t, they almost always leave an unsightly greasy mark. Make sure you mention it in the tenancy agreement, draw the tenant’s attention to it, and manage everyone’s expectations.  

Note: White-tac and sticky pads can all cause similar damage. 

Own up to any damage  

The property belongs to you, the landlord, and tenants must ask for permission to do any alterations or throw anything away that isn’t theirs. If they break something, they should report it in writing immediately and discuss how it will be repaired or replaced. Anything agreed should also be confirmed in writing so there is a full audit trail. 

Top tip: Provide stronger than normal furniture in your student properties. It doesn’t need to be expensive, but it should be practical and durable. 

Other reasons for retaining the deposit - 14%

‘Other’ reasons account for 14% of student disputes, where all or part of the deposit has not been returned. A quick search of the internet will reveal numerous blogs and articles by, or about, students that have ‘lost’ their deposits. Whether they have grounds for complaint or not it can be damaging to the reputation of the rental sector. 

As a landlord, if you are proposing any compensation for a tenancy breach your tenant should be informed what your reasons are, and everyone should be open to discussion in a calm and transparent way. If negotiation is unsuccessful and the tenant does not agree with your reasoning, they may be able to raise a dispute. At this formal stage you will need to provide the reasons for your proposed deductions, as well as supporting evidence, otherwise your case will be rejected out of hand and the adjudicator will return the deposit to the tenant.  

It’s vital that, as a landlord, you have the basics in place, including a robust tenancy agreement and a detailed inventory/check-in. 

Checking out of the property 

Student tenants rarely leave the property at the same time as their co-tenants, and this can cause problems. Make sure the tenants understand that they are jointly responsible for leaving the property in the same condition as when they moved in, and they should make sure they all agree how to achieve this. A pre-checkout inspection to highlight any obvious areas in need of attention can help to prevent any shocks and unexpected costs to all. 

Example case study - mould and damp

Deposit amount: £1,200    Amount disputed: £550 

The tenant said: 

• Mould was already present in the bathroom at the start of the tenancy and got worse over time because the extractor fan did not work 
• Mould started showing in the bedroom a few months into the tenancy, which I reported to the agent, but no one came to see it or do anything about it 
• I did my best to ventilate the property and clean the mould where I could, but it kept coming back 

The agent responded, saying: 

• The landlord was aware of the mould in the bathroom, but this has got significantly worse during the tenancy, so the landlord would like a contribution towards removing the mould and re-painting 
• They have no record of the tenant reporting the mould in the bedroom. This was only discovered at the pre-checkout inspection, by which time it was too late to remedy the problem before the tenant moved out 
• The decorator has said that the mould in the bedroom appears to have been caused by a lack of ventilation and not allowing airflow between items of furniture and the walls 

What evidence was provided? 

Tenancy agreement, check-in and check-out reports with photographs, mid-term inspection reports, quotes. 

• The check-in report noted mould spots on the right-hand side of the bathroom ceiling at the start of the tenancy. Décor in all other areas was recorded as being in good condition and the bathroom extractor fan was ‘not tested’.
• The check-out report showed mould spots over the whole of the bathroom ceiling and large patches of mould in the bedroom beneath the window and to the far wall.

Bathroom 

• The bathroom ceiling was left in a worse condition. However, mould was there at the start and mid-term property visits reported the slow spread of the spots, which would be expected from unattended mould spores and normal use of the bathroom.
• There was no evidence of any investigation or work carried out at any point to address the problem; the tenant was not found responsible, and no award was made.

 Bedroom 

• The tenant did not provide any evidence showing that they reported the mould on the bedroom walls when it started.
• On balance, the adjudicator decided that this allowed the problem to escalate, resulting in increased costs for the landlord, so it was reasonable for the tenant to contribute to the work required.
• The decorator’s quote said that in their opinion the mould was due to a lack of ventilation and that the furniture had been pushed too close to the wall. The tenant was found responsible for not reporting the issue and (after taking into account fair wear and tear) the landlord was awarded 30% towards redecorating the bedroom. 

 Learning points 

• Tenants should be encouraged to always report any issues not already present at the start of the tenancy, to give the landlord an opportunity to investigate and address the matter at the time, to avoid it getting worse. It is important to do this in writing so there is an audit trail if, at any point, this becomes an issue.
• Damp and mould can occur through a lack of ventilation and/or a structural defect. An adjudicator is not qualified to assess the root cause and good evidence must be provided to show why the problem has arisen and why the tenant should be held responsible.
• Where there is an issue such as mould, the landlord is responsible for showing that it was caused through the tenant’s actions or inactions, which must be objectively assessed by a specialist with those areas of expertise. 
• Any issues highlighted on check-in, or at any point in the tenancy, should be addressed by the landlord as soon as possible to avoid increased costs due to the problem escalating. 
• Carrying out mid-term property visits is a great way to spot anything out of the ordinary, that should have been reported and is getting worse.

How to approach negotiations and avoid a dispute

Negotiation is something we do every day, without even realising it, so it is good to remind yourself of a few basic rules which can help you achieve a successful outcome. For more information, read our guide to negotiating with your tenants.    

Prepare: Decide exactly what it is that you are asking for, and know what you’ll settle for, making sure you can back it up with evidence. Once you are ready to proceed be prepared to listen to your tenant’s point of view and be willing to compromise.  

Start the process early: Any discussion should begin as soon as possible after your tenant has moved out and the check-out report has been shared. If they disagree with the amount you are proposing to deduct, early discussions are often very successful and can reduce the likelihood of needing to use a formal dispute resolution service.  

Arrange a meeting: Face-to-face discussions are the optimum way to reach an amicable solution, however telephone discussions at a time, and date, that suits everyone can work equally well although emails are still the most common and convenient.    

Aim for a ‘win-win’ outcome: Approaching a negotiation should be seen as a mutual attempt to solve a problem and if your tenant understands that this is your aim, it can be most productive.  

Explain your position: Explain your position from the start and what you think is reasonable in the circumstances, clearly explaining the costs and why you believe they are necessary. If you have evidence share it with your tenant.  

Listen to the tenant’s perspective: … without interrupting. We all like to be heard, so listen, even if you disagree with some points or what they are saying is inflammatory. Just listening can diffuse a situation before it even starts.  

Be flexible: If the tenant raises any valid points, be prepared to re-assess your claim if it is appropriate. You can suggest you need time to go away and consider what has been said.  

Stay calm: Never react impulsively or emotionally. Keep calm and measured to diffuse any emotion and show the tenant you are reasonable. 

Document your negotiations: Whatever method is used to negotiate, make sure that verbal communications are followed up in writing to confirm what was said or agreed and shared with your tenant. This can then be used as evidence to support your claim if you end up in a formal dispute.  

Using evidence to support your case

Where negotiation is unsuccessful at the end of the tenancy, and there is a dispute, you will need to provide relevant evidence to support your claim. The checklist below details the key evidence you’ll need and the best order to provide it in.  

Top tip: Highlight relevant clauses in the tenancy agreement, and the differences in the check-in and check-out reports with photographs, invoices, receipts and anything else you can, showing your tenants how you have reached the proposed deduction. Remember, fair wear and tear must be included in your calculations on anything relating to condition, to avoid betterment. Fair wear and tear does not apply to cleaning but betterment may.  

The three critical documents 

1. Tenancy agreement: The legal contract between the landlord and tenant should be fair, clear, easy to read and concise. It sets out exactly what the tenant’s responsibilities are and what the landlord is responsible for – such as certain repairs. 

Top tip: Include a clause about nuisance, noise and disturbances for you and the benefit of your rental property’s neighbours. Outline what is considered a nuisance, noise, how to be considerate of neighbours, what is an annoyance or even anti-social behaviour. 

2. Inventory report: Inventories are crucial when looking to negotiate a cost or providing evidence for a dispute. It should be a complete record of the property’s fixtures, fittings and décor, with both their condition and standard of cleanliness, before a tenant moves in. It should include good quality photos and/or videos that are clear and digitally dated. It should also be dated and you must be able to evidence that the tenant received a copy and had the opportunity to comment. 

3. Check out report: The check out report should be a comparison with the check-in report, which highlights all the differences, taken just after the tenant has moved out. 

Additional useful supporting documents 

4. Relevant communications: Any emails and letters between the landlord/agent and tenant, which might include any tenant reported issues, any responses, negotiation attempts or agreements etc.  

 5. Mid-term property visit reports: Records of: 

• How the property was being maintained  
• Any issues that needed attention that should have been reported 
• Tenant actions that need changing, such as drying clothes on radiators, wiping down condensation 

6. Invoices, receipts, estimates and contractor reports: This evidence needs to be dated, clearly break down the cost, showing the work needed, materials, labour and any minimum call out fee  

7. Rent account statements: Accurate records of rent payments should be kept, with any outstanding amounts clearly noted.

In summary 

Maintaining a good relationship with your student tenants from the start and giving them practical advice on how to look after the property can only be beneficial. Let them know what you expect of them during their tenancy, the best way to communicate with you, and ask them to report any issues as soon as they notice them.  

Conducting mid-term inspections (i.e. every three to six months) can help you spot any issues, as and when they occur. This will allow you to carry out any repairs promptly or give appropriate advice on problems such as condensation, without waiting until the end of the tenancy, when problems may have got worse and proposed costs will be higher, making a successful negotiation less likely. Read more in our guide to property inspections.   

Where all attempts to negotiate and reach a settlement have been unsuccessful, making sure you have quality, detailed and written supporting evidence, will be persuasive to any claim. 

Should things escalate to that stage, mydeposits offers a tried and tested free dispute resolution process.  

NRLA members get a 30% discount on the deposit protection fee when they protect a deposit with the mydeposits insurance-based scheme in England and Wales.