There are a number of simple steps landlords can take to help make sure they avoid getting into disputes over deposits.
One of the easiest ways to handle deposits to ensure both the landlord's and tenant's interests are looked after is to use a deposit protection scheme, something which many residential lettings agents can assist landlords with.
Such schemes can help tenants and landlords resolve disputes over the withholding of deposits without having go through costly legal proceedings.
However, it is recommended that landlords take a number of precautions to avoid disagreements or allow them to be resolved as quickly as possible should they arise.
The Deposit Protection Service (DPS), the only free to use deposit scheme available, advises that landlords' first priority should be to create a legally binding signed tenancy agreement.
They should also provide a thorough inventory of the property's contents for the tenant to sign, as well as a schedule of condition report.
DPS also recommends completing a check-in and check-out with the tenant present and keeping hold of all correspondence, invoices and other admin that may be relevant.
In the event that a dispute does arise, both landlords and tenants will need to submit evidence to back up their claims, meaning it is essential to keep detailed records.
"We're always advising landlords that for deposit dispute claims to be successful they have to provide as much relevant evidence to support their claim as possible, as this is absolutely crucial for adjudicators to make educated and informed decisions," commented DPS director Kevin Firth in a recent post on the company's blog.
Mr Firth also noted that a common problem is the failure by tenants and landlords to submit evidence within the deposit scheme's established deadlines.
"Landlords have 14 days to submit all the evidence they would like considered in relation to their claim. If we don't receive anything within the two weeks, we will repay the full amount to the tenant as we have nothing to assess the claim against," he said.