We bought a property with tenants in situ. Do we owe them their deposit?

We purchased a property with tenants in situ in a bank sale in December 2018. We did not take over debts. They were there for 3½ years and not registered with Residential Tenancies Board. I back paid the RTB for four years. We will continue to rent it for a further year until December 2019 and then we want the property as we retire.

The place is in a very, very untidy state and there is also damage to the patio door glass and a shower fan etc which the tenants say is there since they moved in in 2015. I have arranged for the damage to be fixed and they are due €1,250 deposit back. I have two questions:

1. Do we pay this back as it was not paid to us?

2. Can we insist they clean the apartment before they vacate, because we don’t know the state it was in when they rented it?

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I have no doubt that the position you find yourself in is similar to many others who have purchased in the same circumstances. Thousands of properties have been acquired in this manner since 2010. I do not quite understand when you say you did not take over debts; when you purchase a property you inherit all the rights and obligations that go with it. I take it you mean you did not inherit the bank debt but you effectively took it with the tenants in situ.

The issue you raise regarding the deposit is a legacy of the crash. When I acted on behalf of receivers at the onset of the financial crisis, I insisted that they stand over the deposits for the existing tenants. In this case, the conveyancing process should have ensured that the tenants’ deposit was deducted from the purchase price in the apportionment account when closing the sale.

The adage of “Doctor’s differ and patients die” is worth considering here. If I found myself in this position, I would try to avoid the legal route and instead stand over the responsibility of the deposit as I would feel that there is still a moral obligation as the current landlord.

In relation to the damaged patio door, this would most likely be identified during a pre-purchase condition report. If on the other hand you did not commission one then you possibly have an exposure in this matter.

Next tenancy

Landlords hold a damages deposit. It is not a deposit held in respect of cleaning. This is a moot point and in a number of RTB adjudications that I have been involved in they only allow for cleaning in excess of what you have spent for cleaning in the event of preparing for the next tenancy.

Thus, the standard clean is somewhere between €150 and €250. If it was excessively dirty and it ended up costing you €500 then the RTB would invariably allow you the difference. You would have to back this up with photographs, receipts, etc and photographs at the origin of the tenancy which of course you don’t have.

Please remember some tenants are tidy, some are not and you cannot penalise them for that while they are in situ. When they vacate you should have an expectation that the property will be left in a tidy state.

You are at a disadvantage as you were not the landlord at the onset of their tenancy but on the other hand, it could be argued that as the new owner, it would be expected that the purchase price factored a discount as you are acquiring with tenants in situ and not with vacant possession.

You are entitled to deduct for damage that occurred in the property after you purchased it but you are treading water in relation to what occurred before that.

I would not accept the property being returned with rubbish strewn around or the tenant leaving personal belongings like clothes etc. I would charge for this type of removal. I would also not accept the tenants returning bathrooms and kitchen filthy, they would not have accepted this at the onset of the tenancy nor should you when the property is returned.

Given the circumstances of your purchase I would not nitpick. I feel your approach should be to try to achieve a fair outcome for the tenants and yourself.

Kersten Mehl is a chartered residential agency surveyor and member of the Society of Chartered Surveyors Ireland, scsi.ie.