Most disputes between landlords and tenants happen at the end, not the start. Rent is overdue, the unit is dirty, a wall is damaged, and the deposit becomes the battleground. A clear process, followed the same way every time, prevents most of it. This guide is general information; always read your own tenancy agreement and take advice before acting on a disagreement.

Start with the agreement

Everything begins with what was signed. Check the notice period, how notice must be given, whether the tenant must pay up to the end of the notice and what the agreement says about the deposit. If your agreement is vague, tighten it for the next tenant; how to screen tenants and write a tenancy agreement covers the clauses worth including.

Notice from the tenant

When a tenant gives notice, acknowledge it in writing and confirm the date they will leave and the date the rent stops. Ask them to arrange a time for the final inspection and to settle any utility bills. If you need to give notice yourself, for example to sell or occupy the unit, follow the period and form in the agreement and the law. Keep proof that it was delivered. Increasing rent or changing terms has its own rules, covered in how to increase rent fairly and legally.

Prepare for the final inspection

Take out the move-in inspection list, the inventory and the photographs from the start of the tenancy. They are your baseline. The list you made when handing over the keys, described in handing over a rental to a new tenant, is the document you compare against now. Give the tenant a chance to attend and, if possible, agree the condition together.

Compare condition fairly

Normal wear and tear is not damage. Faded paint, minor scuffs and worn carpets after years of normal use are the cost of owning a rental. Damage beyond that, such as holes in walls, broken fittings or missing items, can reasonably be charged. Take dated photographs of anything you intend to deduct for, and get quotes or receipts for the repair. Be reasonable: charge the actual cost, adjusted for the age of what was damaged, not a new item every time.

Work out the deposit refund

Start with the deposit and subtract only what is justified: unpaid rent, unpaid utilities and the cost of repairing damage beyond normal wear. Present the calculation in a short statement listing each deduction with its supporting document. Our guide to rent receipts and tenant deposits explains what to record. The sum should be transparent enough that a neutral person could follow it.

Refund promptly

Return the balance within the time stated in the agreement, or within a reasonable period, and pay it by a traceable method with a receipt. Delaying a refund breeds mistrust and can lead to a dispute that costs more than the amount held. If the repairs are not finished, give the tenant an estimate and refund the balance when the final cost is known.

Update your records

When the tenant leaves, close the account in your register and note the dates, the final rent paid, the deposit position and the keys returned. The rental property and tenant register keeps these details, and the rent receipt book holds the receipts. Keep the whole file for at least five years; records every landlord should keep gives the list.

Tax at the end of a tenancy

A gap between tenants is a period without rent, but your obligations continue. Monthly rental income tax applies to rent received; see how to file a monthly rental income return, and if you file annually, repairs between tenants are allowable expenses, as explained in repairs vs improvements. Record the costs in the rental expense and deduction ledger. Estimate the tax for the year with the rental income tax calculator.

When you cannot agree

If the tenant disputes the deductions, put your position in writing with the evidence and offer to discuss it. Many disputes end once both sides see the documents. If you still disagree, use the dispute process in your agreement or the formal tribunal set up for rent matters, and get professional advice. Never remove a tenant's belongings or lock them out; that can make you the party in the wrong.

Finish well

Say thank you, return the deposit fairly, ask for a forwarding address and keep a friendly tone. A good tenant who leaves on good terms is a source of references and referrals. Then prepare the unit for the next occupant, and start the cycle again with the same careful record keeping.