How to handle a tenancy deposit scheme dispute

Unfortunately, tenants sometimes leave the property in a bad condition, which gives landlords no option but to deduct money from the deposit. In an ideal situation, the tenant will accept the deduction and move on. However, sometimes, landlords have to deal with a tenancy deposit scheme dispute.

The deposit protection scheme dispute can be a nightmare, especially when landlords want to focus on getting new tenants in, so there isn’t a long void period. Although it’s unlikely to prevent new tenants from moving in, solving the landlord deposit dispute as early as possible is important to give landlords one less thing to worry about.

This guide will help landlords resolve disputes related to tenancy deposit deductions under a Tenancy Deposit Scheme (TDS). We’ll cover some common causes of tenancy deposit scheme disputes and offer practical advice on preparing evidence.

A brief guide on deposits

Taking a tenancy deposit is optional, but it is strongly advised. The deposit can provide a safety net for landlords should any issues arise at the end of the tenancy, and landlords can use it to offset any costs.

Landlords cannot take a deposit and simply keep it in a personal savings account. Instead, the deposit needs to go into a government-approved tenancy deposit scheme. We’ve put together a general guide to tenancy deposits for more information.

Common causes of tenancy deposit scheme disputes

Common causes of a deposit dispute usually centre around rent arrears, cleaning, property damage, missing or damaged items or gardening. It can sometimes be a combination of those problems which result in a deposit protection scheme dispute.

Rent arrears and unpaid bills

Your tenant may have missed some monthly payments or may not have paid in full. This is a common reason for landlords to deduct from the deposit, but it’s unlikely to cause a landlord deposit dispute because it’s usually black and white. If the landlord has evidence of the missing payments, the tenant will find it hard to dispute this.

Cleaning

Tenants are responsible for ensuring that the property is clean and left in the same condition they found it in. If the property is not in the same condition as the tenant found it, then the landlord has the right to deduct from the deposit to pay for professional cleaning services if the property requires it.  

This is more likely to result in a tenancy deposit scheme dispute because it’s more ambiguous. Landlords need to have a photographic record of the property before the tenants move in to prove the property’s cleanliness at the start of the tenancy.

Property damage

Tenants are responsible for looking after the property. The tenant should report any damage to the landlord as soon as possible. The landlord can deduct from the deposit to pay for the repairs. Landlords need to be careful, though: if the problem is just fair wear and tear, the tenant is not responsible for paying.

Again, the damage can be ambiguous, so landlords must have photographic evidence to prove damage has occurred.

Missing or damaged items

Landlords can use the deposit to replace damaged or missing items. In a furnished property, this can include appliances such as white goods. The landlord should replace like for like where possible. 

If the tenant has a deposit protection scheme dispute surrounding missing items, the landlord should use the inventory list to prove the item was there at the start of the tenancy.

Gardening

If your tenant fails to keep the garden well-maintained and fulfil their tenant garden maintenance responsibilities, you may be able to deduct money from their deposit. This is likely to result in a tenancy deposit scheme dispute because it’s more ambiguous. It’s important for landlords to have a photographic record of the garden before the tenants move in. This can be compared to the situation at the end of the tenancy.

How does the TDS adjudication process work?

If there is a dispute with the tenancy deposit scheme, the TDS asks the landlord and tenant to try to negotiate together first. They suggest that nearly all disputes are resolved by negotiation, and they may reject the dispute if they feel both parties haven’t tried to resolve the issue. The TDS has laid out a guide to showcase the dispute process.

The party raising the tenancy deposit scheme dispute must complete the required form and submit it to the Tenancy Deposit Scheme (TDS). This form outlines the details of the deposit protection scheme dispute and identifies the parties involved. At this stage, the TDS requests evidence. If you include photographs, videos, or digital recordings, you must sign them, note the date they were taken, and specify which aspect of the dispute they address.

If the submission is complete, the adjudicators will confirm receipt of the tenancy deposit scheme dispute and share the form with the other party for their response. This allows the other party to present their perspective in the deposit protection scheme dispute. It’s critical that they also provide evidence to support their position. For instance, if a landlord or agent seeks to retain part or all of the deposit due to claims of property damage, dirt, the need for decorating, or missing items, they must provide clear evidence to substantiate these claims in the tenancy deposit scheme dispute.

An adjudicator is assigned to consider the evidence and decide how the disputed amount should be paid. They aim to complete the adjudication process within 28 working days of receiving all the evidence they need.

How to prepare evidence for a tenancy deposit scheme dispute

The majority of evidence gathering should already be complete. It’s good practice for landlords to keep records before and during the tenancy. This should include photographic evidence with dates. Landlords should try to submit the highest quality photos possible. Conversations with the tenants should also be included, whether written conversation notes, emails or a letter.

How to avoid a tenancy deposit scheme dispute in the first place

It’s not possible to guarantee that there will be no landlord deposit dispute, but there are measures a landlord can take to reduce the chances. Most of this requires work prior to the tenant moving into the property.

Landlords should create a highly detailed tenancy agreement. The landlord can explain the tenant’s responsibilities and define their own responsibilities. If it is clear to the tenant, there is a greater chance of a smooth tenancy.

Landlords should also complete a comprehensive inventory list. The list should include photographic evidence. If there is a dispute, the landlord can show this photographic evidence to the tenant. It should already be enough to prevent an escalation. The inventory list must be updated throughout the tenancy, with the landlord conducting property inspections.

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