Tenancy deposit scheme

When tenancies come to an end there is usually no disagreement about the return of the deposit.  However, sometimes there is, which can cause hardship, delay and inconvenience to all parties concerned.

The Housing Act 2004 makes provision for both the protection and return of tenancy deposits and the resolution of disputes over their return; all deposits taken for Assured Shorthold Tenancies must be covered by a tenancy deposit protection scheme, of which there are three.

We have chosen to join The Tenancy Deposit Scheme which is an insured option and every tenancy where we hold the deposit, regardless of whether it is an Assured Shorthold, will have the deposit protected by the scheme.

How the tenancy deposit scheme works

In the event of a dispute that cannot be resolved between the landlord and tenant, either party (or KFH) can instigate adjudication with the ICE (Independent Case Examiner).  This must be done within 28 working days of the tenancy ending and the ICE must be sent the following:

• The signed tenancy agreement
• Inventory and schedule of condition for both check in and check out procedures
• Evidence that the claimant has tried to negotiate a settlement
• Tenancy registration number and details (Assured Shortholds only)

We must send the deposit (less any amount agreed by the parties and paid over to them) to the ICE within ten working days of the dispute being registered.

Once the ICE receives the documentation and deposit, the dispute will be adjudicated with 28 days. Once the adjudication has taken place the deposit monies will be distributed within ten days.

Where the amount of the deposit in dispute is £5,000 or more, the ICE does not generally adjudicate these cases, although he may do so at his own discretion and with the consent of the parties.  Alternatively the parties must agree to submit to formal arbitration through the engagement of an arbitrator appointed by the ICE, the cost of which will be borne equally between the landlord and the tenant.

In all probability you will not need to call on the ICE.  However, if you do, it is important that before the tenancy commences we organise a professionally prepared inventory and schedule of condition for the landlord.  The schedule of condition must be signed personally by the tenant at check in and check out.

What the tenancy deposit scheme costs

There is no cost to the tenant.

Benefits

• The deposit is fully protected and insured
• The deposit is returned promptly if there is no dispute
• In the event of a dispute it is quicker and less stressful than going to court
• The property can be re let whilst adjudication is taking place
• There is a guaranteed reimbursement of loss if the dispute is found in the landlord’s favour
• There is a guaranteed reimbursement of loss if the dispute is found in the tenant’s favour

More Information

Should you wish to find out more about The Dispute Service, please visit www.thedisputeservice.co.uk or call 0845 226 7837.

Talk to us about finding your next property to rent