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Calculating the right compensation charges at the end of tenancies is the holy grail of lettings and getting it wrong can lead to unnecessary disputes with tenants, it is claimed. Many landlords and agents are responsible for calculating the cost for compensation charges against a tenant and in doing so, should ensure it is reasonable and fair. However, everyone’s expectations are different. If landlords and agents have to calculate compensation charges themselves, it vital that they have a working knowledge of accepted principles, if they are to avoid a dispute, says the Association of Independent Inventory Associations (AIIC), adding that landlords and agents should also explain to their tenants how they have worked out the compensation deductions. ‘If agents and landlords can prove how they arrived at the proposed deductions from their tenants’ deposits, all parties involved will be happier to accept the decisions. Fewer disputes cause less headaches in terms of wasted time, money and effort all round,’ said Pat Barber, chair of the AIIC. ‘There are a few bits of information that agents and landlords need from the start to aid their calculation, namely the original cost of an item, the age and condition at time of check in, the length of tenancy, average life expectancy of the item and any extenuating circumstances,’ she explained. She pointed out that floor coverings are major bone of contention for landlords, agents and tenants and recent research also shows that accidental damage to flooring is the main cause of insurance claims for tenants at 42%. ‘So for example, if a tenant damages vinyl or laminate flooring with drag marks, deep scratches or scrapes, burn marks and stains, these are considered to be chargeable issues. A small number of surface scratches, nicks and minor indentations are considered to be consistent with fair wear and tear depending on the length of tenancy and original condition,’ said Barber. ‘It is always recommended that care instructions for surfaces such as vinyl and laminate floors be provided to the tenant by the landlord or agent. Laminated flooring can vary in quality from surface ‘photo’ coatings to a thicker laminate top layer. Laminates with a thin surface coating are prone to edge lifting, although excessive washing can also exacerbate the problem and could be chargeable if this can be proved,’ she added. She also pointed out that household circumstances, location, environment, quality, pets, previous wear and so on will all have an effect on the final compensation amount. ‘Landlords and tenants need to put all the evidence together to reach a safe conclusion, one which can be justified in writing at some point if required. Landlords should be able to provide written evidence of the original cost and age of the laminate flooring, or anything else in the property, to enable proper compensation to be calculated,’ Barber concluded. Continue reading →
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