Main causes of deposit disputes and how to prevent them
Recent insights from the Tenancy Deposit Scheme's (TDS) 2022 Statistical Briefing show there has been an increase in end-of-tenancy deposit disputes over the past year, although the overall figures remain relatively low.
The Increase Explained
During the 2021-22 period, the TDS Insured and TDS Custodial schemes in England and Wales witnessed a total of 31,276 adjudications, marking an increase of 1,579 compared to the previous year. This rise in disputes can be attributed to the lingering effects of COVID-19, as fewer tenancies ended during the lockdown period throughout 2020-21. Despite this increase, it is important to note that disputes are only raised in a small percentage of cases, accounting for 0.7% as of March 2022.
Primary Causes of Deposit Disputes
TDS findings reveal that the main reasons behind deposit disputes remain consistent across the UK. The data from all TDS schemes in 2021-22 shows the following patterns:
Cleaning claims - 50%
Damages to fixtures and fittings - 46%
Rent arrears - 13%
Preventing deposit disputes
For over 14 years, TDS has been assisting agents, landlords, and tenants in resolving deposit disputes. The TDS customer support team and adjudicators have years of experience in handling disputes, and are familiar with key factors that can help prevent them. Here are some essential tips from our team to avoid deposit disputes:
Start with a clear tenancy agreement: The terms of a tenancy agreement can vary from one property to another, so having unambiguous clauses that establish responsibility is crucial for avoiding disputes in the future.
Comprehensive inventory reporting: A detailed inventory report sets clear expectations for both tenants and landlords. It is vital to capture the condition of items at check-in and check-out, as this helps eliminate ambiguity when the tenancy ends. Inventory Hive inventory software is a notable provider that offers an accessible solution for inventory clerks, letting agents, and landlords, contributing to a reduction in deposit disputes.
Mid-tenancy inspections: Regular inspections provide insights into how well tenants are maintaining the property and offer an opportunity to address any concerns that may arise. Performing these inspections is highly recommended.
Prioritise communication: Open communication about deposit-related issues can prevent many disputes from escalating to adjudication. Agents have found success in using the Deposit Deductions template provided by TDS, specifying the desired deduction from the tenant's deposit to facilitate reaching an agreement.
Gain insight through CPD Certified training: By participating in the TDS Adjudication Workshop, which is conducted by experienced adjudicators, one can gain an understanding of the evidence adjudicators consider in tenancy deposit disputes. This knowledge can aid in resolving disputes before involving a third-party adjudicator. Understanding the common causes of disputes can be utilised to develop more comprehensive tenancy agreements, inventories, and communications.
By following these guidelines and utilising the resources provided by the TDS, agents, landlords, and tenants can significantly reduce the likelihood of deposit disputes and foster a more harmonious tenancy experience.
View and download the full TDS report here.
If you have any questions that need answering, please get in touch with our Lettings team at 0191 243 1000.
