Here we highlight the Tenancy Deposit Protection Scheme process and an adjudicators approach to deposit disputes.

When should a Deposit Protection Scheme be used?

Deposits for Assured Shorthold Tenancies must be protected in a Government approved scheme within 30 days of receiving the deposit.   

Can the deposit be paid by someone other than the tenant?

The person paying is considered to be the ‘relevant person’.  This can be a person, company or organisation who has made an arrangement with the tenant to pay on their behalf ie local authority, parent, guarantor.  This does not have to be noted in the scheme.

When to serve Prescribed Information?

Prescribed Information must be given to the tenant (and ‘relevant person’) with scheme leaflet within 30 days of receiving the deposit.  

This time scale runs from when part or all of the deposit is deemed to have been received. 

Why is it so important to conduct an inventory report?

It’s imperative a concise inventory report is conducted at the beginning of the tenancy so you can demonstrate, if needed, to an adjudicator the changes that have occurred to justify any deductions required at the end of the tenancy.  If there is a dispute, the adjudicator will consider evidence from both parties regarding the change in condition.  Without an inventory, and subsequent check-in and check-out reports, it can be extremely difficult to demonstrate changes to an adjudicator and these documents can also be used in discussion between the agent/landlord/tenants.

How do I comply with the Tenant Fees Act?

The Tenant Fees Act came into force on 21st June 2019 and prohibits landlords and letting agents from charging certain fees and excessive deposits.  It’s vital the deposit amount taken is checked and to review permissible tenant fees.  

Included in the legislation is holding deposits to be capped at 1 weeks rent, security deposits capped at 5 weeks rent when annual rent is less than £50,000 or 6 weeks above this thresh-hold.  

Default fees (fees which can be charged during the tenancy) are limited to the reasonable costs incurred in replacing a key or lost security device or interest on rent overdue by 14 days or more, capped at 3% above the Bank of England base rate.

Should I keep records of communication during a tenancy?

All forms of communication should be documented throughout the tenancy – texts, whatsapp messages, emails et.  Doing so can help avoid disputes if tenants make you aware of issues and action was taken, record the who, what, when.. Also, ensure you always have up-to-date contact detail for your tenants and document any contact change details.

What do I do with the deposit at the end of a tenancy?

If a tenancy ends without dispute, it’s a simple matter of logging into the Deposit Protection Scheme and arranging the return of payment.  However, once you have spoken to the tenant about making deductions from the deposit, a repayment request will need to be made at the provider.  They will then contact the tenant for agreement.

What happens if my Tenant is disputing the deductions?

If both Tenant and Landlord have discussed issues and cannot come to an agreement over deductions, the deposit scheme will then get involved.  They are impartial, authoritative and their decision is binding.  This will only cover proposed deductions from deposits and not any counterclaims or matters unrelated to the deposit.

What is the deposit dispute process?

An adjudicator can only work with the information they are provided.  They will contact both parties and request information with supporting evidence along with details of what is being claimed and how much is being claimed from the deposit.  As a Landlord, include check-in inventory, schedule of condition report and check-out report.  If claiming rent arrears, send a rent statement clearly showing what’s been paid in and what hasn’t along with dates of when rent was due.  Previous communications, receipts/quotes for works carried out and dated photographs will also help an adjudicator to assess the claim.

We understand keeping all records is time consuming and having to do to dispute resolution can be stressful but if done right, will be just and fair.