In 2018-19, 14% of disputes handled by SafeDeposits Scotland involved a claim for rent arrears - this was one of the less frequent types of claim made, with cleaning, damage and redecorating all representing higher percentages of overall disputes. But what sets rent arrears apart from other types of claim is the average amount claimed - at £397.63 in 2018-19 rent arrears had the highest average claim of all categories and this figure was over £180 more than the average claim for the second placed category, damage. So where does the issue of rent arrears fit into deposit deductions and the potential disputes that could arise from such deductions?
Details on rent are an important part of any tenancy agreement - the Scottish Government's model agreement for a Private Residential Tenancy (PRT) clearly presents points that should be covered, including the amount of rent, frequency of payments, payment method, rent receipts and rent increases. Point 11 on the same document covers the tenancy deposit (including requirement for the deposit to be lodged with an approved tenancy deposit protection scheme) and has this to say regarding rent arrears:
"Where it is provided in this Agreement that the Tenant is responsible for a particular cost or to do any particular thing and the Tenant fails to meet that cost, or the Landlord carries out work or performs any other obligation for which the Tenant is responsible, the Landlord can apply for reasonable costs to be deducted from any deposit paid by the Tenant.
This would include cases where a tenant has not paid all of the rent payable, any amount in respect of one-off services, or unpaid utility bills, or a sum in relation to breakages or cleaning.
At the end of the tenancy the Landlord should ask the tenancy deposit scheme to release the deposit and the amounts payable to each party. If the Tenant disagrees with the amount, the scheme administrator will provide a dispute resolution mechanism.
Where the Tenant owes the Landlord an amount greater than the amount held by the tenancy deposit scheme, the Tenant will remain liable for these costs, and the Landlord may take action to recover the difference from the Tenant."
If any attempt to make a deposit deduction claim for rent arrears is made, then it is crucial that the tenancy agreement has stated within the deposit clause that the deposit can be used for unpaid rent. If this has not been included then an adjudicator cannot award the landlord any of the deposit due to rent arrears.
Any deposit repayment request - whether that includes a proposed deduction or not - should be made only after the tenancy has ended. If the tenant disagrees with a proposal that includes a deposit deduction for rent arrears, and the parties therefore enter into a dispute, then the adjudicator will need to see evidence that the tenant failed to pay rent. This could be in the form of rent or bank statements, which show a stop in payments or a change in payment pattern - this information would be needed for the entire duration of the tenancy, and not just any periods where rent has not been paid. Any copies of communication between landlord and tenant on the matter of rent arrears can also be helpful in the adjudication process.
For further information on the adjudication process see our guidance documents.
