#AskTDS: “What happens to undisputed deposit amounts?”

AskTDS_09.03.18

This article has been written in response to a letting agent’s query: “What happens to any undisputed deposit amounts?”

If there is no dispute about the return of the deposit at the end of the tenancy, the landlord or agent must pay the deposit to the tenant without delay, less any deductions that the tenant has agreed.

If there is a dispute about the return of the deposit or about proposed deductions, the parties should try to reach agreement without delay. Most disputes are resolved informally in this way.  If the deposit has not been returned to the tenant within 10 days of the tenant asking for it, any of the parties can ask TDS to resolve the dispute.

Remember, an agent or landlord can make a payment from the deposit if:

  • both landlord and tenant have agreed; or
  • the court has ordered the deposit to be paid; or
  • TDS directs them to send the money to TDS.

Once TDS has been asked to resolve a deposit dispute, the landlord or the agent must send the disputed amount to TDS.  By this time, the landlord or agent should have paid the tenant any part of the deposit that is not an agreed deduction or in dispute. Keeping the full amount of the tenancy deposit when not all of it is in dispute is likely to make it much more difficult for a tenant to agree to deductions. Sending that full deposit to TDS is also likely to cause distress to the party otherwise entitled to receive it. TDS may not be able to repay any of the deposit until the report of adjudication has been completed and published.

When a dispute is raised with TDS, it is important that the agent/landlord gives a full breakdown of the tenancy deposit, showing what is in dispute and what has happened to any undisputed amount.  This ensures that TDS is able to confirm with the parties the amount in dispute and that the agent/landlord sends the correct disputed amount to TDS (if not already received).

Where part of the deposit has already been distributed with the tenant’s agreement, or returned as an undisputed amount, the parties should make sure that they keep a clear record. This should include written communications with the tenant confirming their agreement.

It is also best practise to let TDS know the full picture about all claims made against the deposit, whether agreed or not, and also when claims for more than the deposit are made. The adjudicator needs to have all the relevant facts available to them.  If they are unaware of all claims or which claims agreed deductions relate to, this can affect the adjudication outcome.

If a TDS member starts a tenancy deposit dispute but does not send TDS the disputed amount, the dispute will not move forward until either the money is received or the tenant engages with TDS to requests that the case is progressed.

Remember: keeping good records and ensuring that TDS knows what has been disputed, returned or paid out will help to avoid future disagreements and confusion. Returning any undisputed sums quickly and efficiently can build bridges to help with resolution.


About TDS:

Tenancy Deposit Scheme (TDS) is a government approved scheme for the protection of tenancy deposits; TDS offers both Insured and Custodial protection and also provides fair adjudication for disputes that arise over the tenancy deposits that we protect.

We provide invaluable training in tenancy deposit protection and disputes for agents and landlords through the TDS Academy as well as joining with MOL to provide the Technical Award in Residential Tenancy Deposits.

TDS Insured Scheme: where a TDS member can hold the tenancy deposits as stakeholder during the term of the tenancy.

TDS Custodial Scheme: where TDS hold the deposit for the duration of the tenancy.

TDS Academy: TDS provides property professionals with invaluable training in tenancy deposit protection and tenancy deposit disputes.

TDS can only comment on the process for our scheme, other deposit protection schemes may have a different process/require different steps. Content is correct at the time of writing.

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RLA: If you are a Landlord and would like to keep up to date with any changes that may affect you or your responsibilities, you can contact the RLA at: info@rla.org.uk and quote reference: dg715 to receive 25% off your first year’s membership.