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MAY 2011

The Tenancy Deposit Scheme (“TDS”) was created in 2007 to deal with the return of deposits at the end of a residential tenancy.  Prior to the introduction of the scheme, there had been many problems surrounding the return of such deposits. 

Tenants found that some landlords would unreasonably withhold all or part of the deposit and, in some cases, not even have the funds to repay the deposit at the end of the term.  There was limited redress for tenants as their only option was to take a landlord to Court if the landlord failed to return the deposit.  Take up of the scheme was initially slow (in the two years following the introduction of the scheme, surveys suggested that as low as 30% of landlords were not properly protecting the tenants’ deposits).  However, as lettings continue to rise across England & Wales, more landlords, tenants and agents are seeking compliance with the scheme.  As a result, this new guidance will provide welcome clarification to all parties.

The Guide to Tenancy Deposits, Disputes and Damages

The guide recommends that landlords and agents take certain steps prior to and at the end of the tenancy to minimise the scope for disputes.  It suggests that:-

• landlords and agents remind tenants of their obligations under the tenancy agreement prior to the tenancy ending;
• tenants, where possible, attend the check out process; and
• landlords should take into account fair wear and tear in order to manage their expectations of what they can claim from the deposit. 

The guide also lists the type of evidence which will be required to be produced to an adjudicator in any dispute.  Evidence such as tenancy agreements, inventory reports and invoices and receipts may all seem rather obvious but the guide suggests that these are not always produced in disputes between the parties.  The guide says that the adjudicator can only make a decision based on the documents provided to it so it is crucial for each party to ensure that all relevant evidence is provided.  The guide also provides a useful summary of the definition of fair wear and tear and what a landlord should expect at the end of the tenancy.

Finally, it reminds the parties that the deposit is regarded as the tenant’s money and says that the tenant has no obligation to prove his argument because the deposit remains his property until successfully claimed by the landlord.  As a result, the landlord must ensure that he proves he has “on the balance of probabilities” a legitimate claim to keep all or part of the deposit.  If he cannot, the adjudicator must return the disputed amount to the tenant.

Lynne Horay
Senior Solicitor

If you would like any further information about the issues raised in this article please contact Lynne Horay (lhoray@gdlaw.co.uk) or any other member of Goodman Derrick LLP’s property team on 0207 404 0606.

This guide is for general information and interest only and should not be relied upon as providing specific legal advice.