Tenancy Deposit Protection FAQs
Can we recharge the subscription?
Agents can recharge the subscription across their portfolio. This will not be onerous to their landlords as it will work out at very little for individual properties.
The service is free to tenants.
How much will it cost for landlords to join the Scheme as members in their own right?
This is still under consideration. The fees for landlords will be announced towards the end of February 2007.
Do agents have to pay for all their offices?
They have to pay a subscription for all of the offices out of which they do any lettings business, however small.
We only manage a handful of deposits?
It would probably be better served by one of the other designated schemes.
Who gets the interest?
It doesn’t matter, but it must be specified in the tenancy agreement.
How do are joint tenancies dealt with?
Money awarded to the tenants equally to each of those named in the tenancy agreement. It’s up to the tenants give written authorisation, signed by all of them, if they want a different allocation. It is also their responsibility to tell the landlord/agent if someone has moved on to make the necessary changes to the tenancy agreement.
Does the agent have to hold the deposit as stakeholder?
Yes. The legislation effectively does away with the ability to hold the deposit as “Agent for the Landlord” and to deploy at the landlord’s discretion. It prohibits the holder of the deposit from disbursing the deposit without the agreement of the landlord and tenant. A disputed deposit can only be paid out following a decision by an adjudicator or the courts. Even if a landlord wishes to insist that the Agent holds the deposit as “Agent for the Landlord”, the agent would not be able to release any of the deposit to the landlord, at any point during the tenancy.
What happens with let-only properties?
Whether the agent or the landlord is going to hold the deposit is a matter for them to determine. Disputes can only be dealt with where the deposit is being held by a Member of Scheme. DPS can’t deal with disputes over deposits held by the landlord because they need to have the money transferred to us to resolve the dispute and pay it out.
Where the agent lets the property and passes the deposit to the landlord, they must ensure that the landlord understands their legal responsibilities concerning deposit protection. The liability for deposit protection then passes clearly to the landlord.
If a tenant leaves without notice or abandons a property, and there is no forwarding address for them, could a Landlord or Agent make a claim and be assured that claim would be upheld in the absence of the tenant?
DPS deal with these cases summarily, but have been told by the Office of Fair Trading that they would have to make some investigation to establish why the tenant had breached the agreement. Very often tenants will have left the agent with a mobile phone number or an employer's contact details, allowing DPS to get in touch with them. Their experience is that they generally own up to being in breach of contract, and the can be settled the matter very quickly. But occasionally they maintain that they had good reason to have behaved as they did, and DPS have to investigate and adjudicate formally.
What if the landlord has disappeared?
If the landlord was holding the deposit, the tenant would have to contact DPS and they would have to treat it as a dispute. It would be dealt with it in the normal way.
If an agent was holding the deposit, they could take a pragmatic view and pay the tenant - but there is always a risk that the landlord will surface eventually and make a case. As long as the paperwork is in order, the landlord/agent will have a strong defence, but they will need the assistance of their lawyers. The landlord/agent may want DPS nevertheless to adjudicate as if there was a dispute. DPS usually do so, but may decline if the amount at stake appears to be trivial.
If a claim is made and is not defended will the claim be upheld and monies automatically be granted to the claimant?
Not automatically. DPS would still need to look at the case and verify everything was in order, just in case the defendant subsequently contacted them and required them to justify their decision e.g. by taking legal action. DP would also want to be sure that their failure to defend was not due to circumstances beyond their control e.g. they were in hospital; had to leave the country to deal with a family emergency; etc. However, DPS may not need to appoint an adjudicator or produce a formal report, which could speed up the adjudication.
What constitutes agreement or dispute between the Landlord and the Tenant?
There is agreement when they decide how the deposit shall be allocated between them. There is a dispute when they cannot agree, despite the mediation of a third party e.g. the agent.
Is it true that agents need to have written agreement or disagreement from the Landlord? Is it true we need to have written agreement or disagreement from the tenant?
Agents actually need neither, as they can instigate a dispute themselves. However, it is useful to get them to write it down because it will help them understand the merit of their case. DPS will always ask the non-complainant for their side of the story.
What happens if the tenants do not respond to our letters at the end of the tenancy? I have heard that currently, we must wait 6 months before assuming agreement and distributing deposits accordingly.
If the tenants do not respond, you will want to establish why. You may perhaps construe their silence as consent, and you will usually be right – but there is always a risk that the tenant will surface eventually and make a case. As long as the paperwork is in order, the landlord/agent will have a strong defence, but they will need the assistance of their lawyers. The landlord/agent may want us nevertheless to adjudicate as if there was a dispute. DPS will usually do so, but may decline if the amount at stake appears to be trivial.
Does the Member have to send the whole deposit?
Yes, if it is all in dispute. If there has been agreement about what will happen to some of it, they must send the full deposit, less any amounts already agreed by the parties and paid over to them. Failure to do so will not delay the adjudication but the company will take appropriate action to recover the deposit and discipline the Member.
Can we send all our disputes to you?
You must try and resolve them first, and you have ten working days to do so.
What evidence do you need?
Whatever you need to make your case. DPS don’t go looking for evidence. Nor is it sufficient for you to say “I know the wall wasn’t damaged at the start of the tenancy, and it is now” without some evidence to back it up. Under those circumstances, DPS may award the disputed amount to the tenant automatically
Are inventories compulsory?
No, but you will find it very difficult to demonstrate that the property has deteriorated during the tenancy if you don’t have inventories and schedules of condition at the beginning and end. Under those circumstances, we may award the disputed amount to the tenant automatically
Are ICE adjudications binding?
Yes. When you agree to the ICE adjudicating the dispute, you agree that his adjudication will be binding.
Are the time scales rigid?
The ICE has the power to be flexible, and generally will be if it is clear that something has happened that genuinely stops you from meeting the timescales e.g. you have to go into hospital; you have exams; you will be on holiday; etc.
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