Introduction

Many tenants in the private sector give their landlords a deposit against possible non-payment of rent or damage to property. When a tenancy comes to an end, there is usually no disagreement about the return of the deposit. But sometimes there is, and this can cause much hardship and inconvenience to both landlord and tenant. The Housing Act 2004 (Chapter 4, sections 212-5; & Schedule 10) made provision for both the protection of tenancy deposits and the resolution of disputes over their return. The Dispute Service was awarded a contract by the Government to run one such scheme: The Tenancy Deposit Scheme (TDS). The legislation came into effect on 6 April 2007. Since then all deposits taken for Assured Shorthold Tenancies have had to be covered by a tenancy deposit protection scheme.

 

What is TDS?

TDS has been developed to ensure that the deposits are protected and that disputes about their return are resolved swiftly, inexpensively and impartially.
Under TDS:

deposits will be protected during the tenancy.

where there is no dispute at the end of the tenancy, the deposit should be returned promptly by whoever is holding it.

where there is a dispute about the return of the deposit it will be dealt with fairly by the Independent Case Examiner (ICE).

the ICE will make his decision quickly, and the deposit will be paid out without unnecessary delay.

What is The Dispute Service Ltd?

The Dispute Service Ltd is an independent, not-for-profit company established in 2003 to resolve complaints and disputes arising in the private rented sector speedily, cost-effectively and fairly. As well as TDS, the Company deals with complaints against members of The Association of Residential Lettin

g Agents. Agents who wish to join must be members of one of the Approved Bodies mentioned below.

How are the deposits held and protected?

The member firm holds the deposit, in a separate client account. In most cases the tenant and the landlord will decide between them, assisted by the agent if one has been involved, how the deposit should be allocated. If there is a dispute, the landlord or agent has the opportunity to resolve it. If that fails, any of the parties – landlord, agent or tenant – can approach the ICE. He will appoint an adjudicator to assist him in considering the evidence they provide, and will aim to issue his decision within 28 days of receiving all the necessary papers.

 

If there is a dispute, what happens to the deposit?

The member will transfer the disputed amount to The Dispute Service. It has a special cash fund which enables the ICE to carry on with an adjudication and to pay out the deposit evenif the member has not sent it. The Dispute Service will pay out the deposit according to theinstructions of the ICE following his award.
If the member does not send the disputed deposit, The Dispute Service will take legal actionto recover it. The company will claim it from its insurers if the member is unable to pay e.g.
because it has become insolvent.

 

How are disputes resolved?

The tenant has 20 working days to tell the member that they wish to dispute their proposed allocation of the deposit, and the Member has 10 working days to resolve it.

If not, the parties decide if they want to go to court, or to have the ICE deal with it – which is what most people prefer. Either way, the disputed deposit must be sent to TDS.

Send details of the dispute on form TDS 2 Notification of Dispute, together with relevant documentation, to TDS.

Whoever is holding the deposit must send the amount in dispute to TDS.

The ICE will copy the details of the dispute to the other parties, giving them 10 working days to send in their side of the story.

The ICE will appoint an adjudicator to assist him, with a view to issuing an adjudication within 28 days of receiving all the necessary paperwork.

The disputed amount will be paid out in accordance with the adjudication within a further 10 working days.

Information provided by the TDS www.thedisputeservice.co.uk