Can my tenant use their deposit as their last months rent?

At JP Hay we have had situations, where tenants presume that they can leave the property at the end of the tenancy and use the deposit as their last month’s rent. This is despite the fact of clearly explaining to the tenant what the deposit was for at the beginning of the tenancy.

Unless pre agreed at the start of the tenancy tenants should pay their last months rent on the last rent payment day before they move out,  and the deposit is for any dilapidations that need to be taken in respect of any damage to the property. For example if you have fully painted the property before they went in, and they put marks on the walls, etc (that are beyond the scope of fair wear and tear). They should then be paying to have those marks repaired and the walls repainted.

When your tenant has decided to move out and it comes close to the end of their tenancy you should have a polite conversation and make it clear to your tenant that they should be paying their last month’s rent in full. Then what will happen after they leave the property is if there’s no money to be deducted from the deposit, you will then be able to return all their deposit back to them.

If they do not pay the last months rent and try to use this as the final months payment it can create a difficult situation for the landlord who is now without the last month’s rent, a mortgage payment looming and possible damages that need to be repaired before the next tenant moves in.  Leaving the landlord out of pocket whilst they wait for the deposit release process to be completed.

Unfortunately when it comes to the law you can’t really pursue a tenant legally for non-payment of rent until they’re in two full months worth of arrears, but what you can do is pursue them personally. You can find out where they live via certain companies that will trace your past tenants for you, and then you can serve them with some court documents and issue them with a county court judgement if they don’t pay that last month’s rent.

If you are managing your property yourself, always ensure that you speak to your tenant. You must be clear with them and tell them that you will be expecting their last month’s rent and that you won’t be taking the deposit in lieu of this. If you have got a managing agent, they should also be making that clear to the tenants. Often tenants are not educated in this area and if they know someone who has done this before then they will take it that this is the process when it comes to the final months rent.