Leading tenancy deposit scheme to provide dispute resolution for new deposit replacement company

TDS has entered into an exclusive contract to provide dispute resolution services to Zero Deposit, run by former ZPG chief commercial officer Jon Notley, when it plans to commence trading later in 2017.

TDS, as one of the UK’s leading providers of deposit protection, is the longest-serving and most experienced provider of adjudication services in tenancy deposit disputes. As part of its strategic partnership with Zero Deposit, the Hemel Hempstead based company has made an investment in the new business and takes a seat on the board.

Deposit replacement insurance products involve tenants buying an insurance policy in lieu of a deposit which guarantees to landlords any approved losses incurred as a result of action by the tenant up to a specified value. Tenants remain fully responsible for any damage or outstanding rent payments at the end of the tenancy, but the landlord is protected in case these debts are not honoured by the tenant, with Zero Deposit paying the landlord within 48 hours of the disputed claim being accepted or confirmed by TDS.

Steve Harriott, Group Chief Executive of The Dispute Service, said: “While deposit protection is the core of TDS’s business through our insured and custodial schemes we recognise the merits of a different kind of scheme where no deposit is taken and one that addresses the affordability/mobility issues that may arise with deposits.

“Whatever option tenants, landlords and agents choose, we are determined to ensure that claims can be assessed with impartiality and professionalism. Our experience of dispute resolution and the robust procedures that we follow make us well placed to support this new direction in tenant deposit replacement.

“We chose to partner with Zero Deposit as it is a credible scheme with a number of agents already committed as launch partners. It has raised a significant sum of money in start-up capital and has the backing of Munich Re as the insurer.  “We feel that Zero Deposit’s ethos mirrors our own: their approach is open and transparent for tenants and provides assurance to landlords that they will be able to claim for any losses”

Jon Notley, CEO of Zero Deposit, said: “To have TDS with us as a launch partner is an incredibly important development. The TDS team have unparalleled experience of deposit protection and dispute resolution and their knowledge of the intricacies of the private rental sector gives us a significant edge on our competitors.

“With a company as trusted and respected as TDS providing our adjudication services, tenants, landlords and agents using our new product can be assured that any end of tenancy disputes can be dealt with professionally and fairly.”

The announcement of this strategic partnership with TDS follows the news that Zero Deposit had entered an exclusive, global insurance partnership with Munich Re, agreed a long term promotional deal with Zoopla and had received the financial backing of leading investors including Jamjar, the venture fund set up by the founders of innocent drinks, and Grenville Turner.

Along with a highly-experienced management team, and with further partnership announcements planned in the coming weeks, we believe Zero Deposit is well placed to lead the deposit replacement market following its planned launch later in 2017.

TDS background:

· The Dispute Service (TDS) is a not-for-profit company guaranteed by RICS and Propertymark (formerly The National Federation of Property Professionals). It was formed in 2003 to operate a voluntary Tenancy Deposit Scheme (The Tenancy Deposit Scheme for Regulated Agents) which it ran until 2007 when the statutory schemes commenced in England and Wales.

· For over ten years, TDS has provided tenancy deposit schemes in England and Wales, first with an insurance backed scheme which began in April 2007. Then, from April 2016 is also began offering a custodial scheme.

· With TDS Insured, the landlord or agent holds the deposit money during the tenancy and handles its release directly with the tenant when the tenancy comes to an end.  If there is a dispute at the end of the tenancy the disputed amount is transferred to TDS and only returned by agreement of the parties/adjudicator/court. Dispute resolution is provided for free by TDS. Landlords/agents pay a small fee to TDS to allow them to hold the deposit and to fund the TDS operations. If the tenant is due money back but the landlord won’t repay it, TDS pays the tenant the money they are due and reclaims this from insurance TDS hold. TDS then sues the landlord for its costs.

With TDS Custodial, TDS holds the money during the tenancy and releases the deposit in accordance with the landlord’s and tenant’s instruction when the tenancy comes to an end. No fee is paid by tenant or landlord but TDS retains the interest on the deposits it holds to fund the service.

· The dispute resolution that TDS offers is market-leading and in the last year (2016-17) the company has adjudicated more tenancy deposit disputes than any other UKcompany (over 16,500).

Zero Deposit backgound:

Renting property can be expensive and stressful. On top of rent, fees and the other costs of moving home, tenants are expected to find up to 6 week’s rent for their security deposit; money that’s not sitting in their bank account for the length of the tenancy. Even worse, when moving from one rental property to another, tenants may have to find their next deposit before they get their last one back.

Zero Deposit was created with the aim of solving this problem. Tenants pay the equivalent of one week’s rent for a Zero Deposit policy, which is non-refundable and which gives the landlord the same cover as a 6-week tenancy deposit. Tenants remain fully accountable for any damages or unpaid rents. If the tenant and landlord do not agree on any claim, the case is sent to an independent expert who reviews the evidence and provides a fair adjudication.  Zero Deposit pays the landlord quickly in the event of an approved claim.

Operating as a fully regulated business, and with every policy backed by Munich Re, one of the world’s largest insurance companies, Zero Deposit believe they solve a real affordability problem for tenants while giving landlords protection and peace of mind.

4th September 2017

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