Deposit disputes have always been a bane of contention, the most common form of dispute between landlord and tenant. Once a tenancy comes to an end, both parties have their own agendas and one man’s idea of what is clean and tidy, broken or usable, damaged or pristine, is not a universal concept or in any way an absolute standard.
Since April 2007, with the introduction of legislation in the 2004 Housing Act, damage deposits in England & Wales (and since in Scotland) have become the subject of statutory rules. Since then, the process of deciding who gets what has been taken out of landlords, agents and tenant’s hands.
Now, a tenant’s damage deposit must be protected in one of the 3 approved government schemes. This is either the custodial scheme, which is free to the users but the money must be paid over, or one of the two insurance backed schemes, where the landlord or agent retains the deposit until such time as a dispute arises.
This process introduces a new dimension as far as the landlord or letting agent is concerned. Whereas before the disputes was handled between the landlord and tenant directly, often ending in a stalemate situation, now, any money amount in dispute is handled and decided by an independent adjudicator appointed by the scheme.
Author, Tom Derrett is a lawyer specialising in the deposit protection system. Having long experience adjudicated in hundreds of deposit disputes, Tom now trains adjudicators himself and operates a deposit protection consultancy – depsoitclaim.com
A common view of adjudication by landlords and sometimes letting agents is that the whole process is biased and heavily staked against the landlord. This view is somewhat supported by the statistics: since the schemes started only around 8% have resulted in an outright win for the landlord, with 43% being a compromise and 49% when the landlord loses the whole amount.
Clearly, there is something amiss, but as Tom points out in this excellent guide for landlords and letting agents, countless decisions have been made in favour of tenants, wrongly. But this is not because of bias on the adjudicators’ part, or any antipathy toward landlords, it’s purely on the basis that the landlord or his...
agent has not produced sufficient evidence.
In any dispute, whether it’s a money claim or deposit dispute in the small claims court, or when before an independent adjudicator, having hard evidence, presented in a concise and clear way, is the key to winning the dispute.
Clearly, many landlords do not appreciate the importance of this and have not developed their skills and processes sufficiently, when managing their tenancies, to make sure that they have sufficient organised evidence available when it is required. Very often the evidence is readily available, it’s just that landlords don’t realise how important it is to collate it, or they just can’t be bothered, believing they are so obviously in the right.
In his book Tom Derrett explains why landlords lose disputes and how to remedy this. He explains in detail the differences between the custodial and insurance based schemes and how to handle claims in both. He also explains the pros and cons of opting to use the small claims court system instead of independent adjudication, and when you should consider this.
The dispute process is explained in detail, setting out how to put your claim together in a logical, clear and systematic way, how to present and process the claim and how to respond to your tenant.
This is a relatively short guide of around 50 pages or so, easy to read and absorb this vital information. I would say its contents are so important that every landlord and letting agent should read it.
This publication is in e-book format and can be read on all computer and mobile devices – buy the book here
Tom Entwistle©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law; always seek professional advice. Legislation changes, so check dates on these articles. If you have questions go to the LandlordZONE® Forums