Tough but Successful First Year for the Tenancy Deposit Scheme

The first year of operations for the Tenancy Deposit Scheme proved tough due to the very tight inaugural deadlines. However, it was successful and had nearly half a billion pounds in deposits covered and 2,000 disputes resolved. This is shown in the Annual Report of The Dispute Service published today, Tuesday 25 November.

The Dispute Service is the not-for-profit organisation responsible for the Tenancy Deposit Scheme. It also runs the independent complaints scheme for ARLA, the Association of Residential Letting Agents, and during the inaugural year ran a similar scheme for the Ombudsman for Estate Agents. The Tenancy Deposit Scheme is one of the three Deposit Protection Schemes authorised by government.

Initially, registration of tenancies covered by the Scheme was more gradual than expected. Registrations came into the system as new tenancies came on stream after April 2007 when tenancy deposit protection became mandatory. However, since then the housing market has seen a less mobile population. People in rented accommodation are moving less often and tenancies that started before deposit protection became mandatory have often been extended.

It is also believed that there may have been some under-reporting of new tenancies, although it is impossible to quantify.

During the first year, the dispute rate was 1.76% of the total number of registrations. This is less than predicted. All cases were closed within an average time of 28 days, from receiving the consent of both parties to adjudication, as demanded by government.

Although the number of cases handled was low, the percentage suggests that there will be as many as 6,000 disputes during the year 2008-09. Disputes can involve complaints about members of professional bodies, as well as Alternative Dispute Resolution on behalf of the Tenancy Deposit Scheme. This arises at the end of tenancies when landlords and tenants cannot reach agreement.

To cover this projected increase in the workload, staffing levels have been increased. The number of casework staff is expected to rise from 54 to 67 during the second full year of operation.

Already during the current year 2008-09, over £700 million of deposits have been safeguarded, an increase of 50% and the volume of dispute has risen to 750 a month and climbing.

Commented John Hornsey, Chairman of The Dispute Service, There is still widespread ignorance and non-compliance with Tenancy Deposit Protection. Along with the professional bodies and the other protection schemes, we are doing what we can to address the issue. Hopefully by the time of our next annual report, there will be an even greater degree of compliance with the legislation.

The annual report of The Dispute Service provides full details of the operation of The Tenancy Deposit Scheme and includes case studies of typical disputes. A hard copy of the report has been circulated to all members of the Scheme together with a new TDS window sticker.

To view the full report please click here.

25th November 2008

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