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09
Dec
2015

Deposit Disputes – The Process Every Landlord Needs to Know

In the unlikely event you become embroiled in a deposit dispute, it’s important to know what approach you can take in order to achieve the best outcome. If it becomes necessary to negotiate a deduction from the tenant's deposit, or even withhold the full amount, being clued up is essential.

Continue reading to find out more about deductions, disputes, and the procedure used if the dispute with your tenant continues to remain unresolvable.

Property punctuality

If, at the end of the tenancy agreement, you find it necessary to make deductions from the deposit, the first thing you should do is talk to your tenant.

You should outline exactly what the issues are, and use your tenancy agreement and inventory to point to the reasons why you need to make a deduction. You should be prepared to listen to the tenant’s response and be prepared to compromise where it is reasonable to do so

 The deposit clause in the tenancy agreement will list the reasons for withholding any part of the deposit as compensation and will include, for example:

  • Any outstanding bill payments at the end of the tenancy agreement
  • Where the property is found in a worse condition or standard of cleanliness than  it was in at the start

REMEMBER - Damage to the property has to be beyond “reasonable wear and tear” and the amount you are claiming must be proportionate (e.g. towards replacement of a damaged item where it is severely damaged or repairs where replacement is not justifiable)

However, you and the tenant will not always agree with your claims or valuations which brings us to the next part of our recommended protocol in deposit disputes.

Dispute resolution

On the 2nd July 2012, it became a legal obligation for landlords with properties in Scotland to lodge their tenant's deposits with a government endorsed tenancy deposit scheme such as mydeposits Scotland. All schemes offer an impartial dispute resolution service.

At mydeposits Scotland we have an Award Winning Alternative Dispute Resolution Service, which our members can use free of charge.

The first thing you should do if you cannot reach an agreement with your tenant, before deciding to raise a dispute, is to review all the Guides on our website to make sure you are fully informed.  Want to see case study examples? Browse our series here: Dispute Case Studies.

If you raise a dispute then you'll need to submit any evidence necessary to support your claim, such as the inventory, tenancy agreement or any receipts for damaged items. You can find out more about this with our guide on the rules of claiming for deposit deductions.

Get the verdict

Adjudicators have to strongly rely on the evidence submitted during the process in order to analyse the situation, consider inevitable “wear and tear” versus excessive damage, and ultimately make their decision.

The deposit is held by the scheme provider until the dispute is resolved (however it's never too late to continue to try and come to an agreement with the tenant, even during this process). Dispute outcomes are determined by an independent adjudicator and are completely impartial.

It’s important to be aware that, once the decision has been made by the adjudicator, the decision is final and no appeals can be made.

Once the adjudicator reaches a decision, they will notify you and the tenant. Then, the scheme will distribute the disputed money according to the outcome of the decision.

A proven formula

If the deposit dispute is to be resolved in your favour, knowing your stuff is vital. If you've prepared relevant evidence and considered all the available information from your scheme then you have given yourself every chance of obtaining a favourable outcome

 

Interested in expanding your knowledge further? Take a look at our Guide to Deposits, Disputes and Damages.