Cleaning is the number one source of deposit disputes in the 12 months since the Tenancy Deposit Scheme received its first disagreement to be resolved between landlord and tenant.
The scheme, for regulated letting agents and their landlords, went live in May last year, and so it took six months before the end of a tenancy to a deposit dispute that needed independent resolution.
Lawrence Greenberg, chief executive of TDS, says cleaning is not the only dispute.
He says: “Referrals to the scheme generally contain more than one area of dispute. As well as opinions differing over what is clean or not, we are most often called upon to adjudicate on the costs of small amounts of damage where redecoration is needed.
“Also damage caused by pets, especially when they have not bee specifically allowed under the terms of the tenancy agreement is often a bone of contention.”
Gardens are another area for difficult judgements. Outside the property there are three elements not two the landlord, the tenant and nature as well. Natural causes can often force the need for an impartial decision from an independent adjudicator.
On the first anniversary of the first adjudication arriving at the TDS, the Scheme reports over 80 cases arbitrated over the 12 months, with a further 40 current. The values of the disputes range from 70 to 12,000.
Greenberg says: “The causes of the disputes are all broadly similar. It is just that sometimes the sums involved vary from small to large.”
The three professional bodies whose membership is active in the rental market back the TDS. They are the Association of Residential Letting Agents, the National Association of Estate Agents, and the Royal Institution of Chartered Surveyors. These organisations account for about 3,000 letting offices, more than half of all the mainstream letting agents.
Since the beginning of this year, the TDS has made particular efforts to increase student awareness of the safeguards offered by the scheme. Deposit problems can often make it difficult for students and many other young people to move on, as the amounts involved in a withheld deposit can be substantial. Following a TDS adjudication, all deposit money due to the tenant is returned within five working days. The adjudication itself takes no more than 10 days.
Use of the scheme can benefit landlords too, as it requires all rent to be paid up-to-date before independent dispute resolution can be used. This is expected to help abolish the culture of withholding the final return for fear of deposit being retrained unfairly.
So far, the majority of disputes have been referred to the scheme by letting agents, followed by tenants and then landlords referrals. Most adjudications end by partly favouring each side.
Greenberg says: “We are very pleased with this first year of dispute resolution. The scheme is working well and allowing people to move on quickly. We are doing away with the protracted disputes that can hang over peoples heads for months. These often cause severe financial hardship to tenants and can be damaging to landlords as well.”
Last month the government announced the bidding process for two types of scheme to be in place when the compulsory use of TDSs comes into force next year. One type will be run like the TDS as an insured scheme. The alternative will be a custodial scheme with a government appointed agency holding any deposits where a landlord is not joined to an insured option.
Both types will have to contain dispute resolution process of the type that has proved itself over the past year.