This case concerns a dispute over damage to a carpet at the end of a tenancy. However, the dispute ultimately arose at the end of tenancy once the tenant was made aware of the proposed deduction. The undisputed deposit amount was then requested by the tenant, but not released.

The Claim

The landlord was claiming compensation for damage to a carpet due to a large stain that occurred during the tenancy. There was evidence that the stain had not been removed or improved by professional cleaning at the end of the tenancy. This was confirmed as the only claim being made against the tenant’s deposit.

The Evidence

The tenant accepted that they were responsible for the stain and were in negotiations as to the level of deposit to be retained, with the landlord wishing to make a deduction of £150.  In the meantime, the tenant requested the undisputed deposit amount, which equated to 70% of the deposit amount to be returned.The agent retained the undisputed deposit amount of £350, stating that the written consent of the landlord to release the undisputed deposit amount was not forthcoming.

The tenant viewed the retaining of the undisputed deposit as leverage for negotiations surrounding the claim for damage to the carpet.

So what are the key points here?

•  It is beneficial to all parties to reach agreement as early as possible at the end of the tenancy. To do so enables a landlord to carry out any remedial works expeditiously. From a tenant’s perspective, the release of any undisputed deposit amount delays causes issues with tenants, as it delays their ability to use the monies towards their next rental deposit.
• It was clear that the only claim against the deposit was for the carpet, and therefore authorisation for the release of the undisputed deposit amount should have been provided from the landlord. It should not be retained to persuade a tenant to settle proposed deductions.
• In this case, had the landlord allowed the agent to return the undisputed deposit, which represented 75% of the deposit total, to the tenants expediently. The tenants indicated in their dispute response that they would have been inclined to have reached agreement concerning the damage claim. This would have avoided the need for referral to Alternative Dispute Resolution.
• Any undisputed deposit amount (after discussion and agreement with the landlord) must be returned to the tenants within 10 days of their request for it to be returned. Failure to do so allows a tenant, in our Insured scheme, to raise a dispute.
• A recent analysis of disputes submitted to TDS in our Insured scheme, showed that approximately 75% of those sampled disputes contained an element of undisputed deposit amounts, that should have been returned to tenants.
• A significant number of calls made to our Customer Service Advisors relate to the issue of undisputed deposit amounts that have not been returned, after request. It is essential to manage the expectations of the parties.
• From a tenants’ perspective, ensure that bank details are provided to enable the return of the undisputed deposit amount to you and acceptance of the return of the undisputed deposit amount will not be deemed to be acceptance of liability in relation to any proposed deduction.

If you are interested in further guidance relating to deposit disputes, visit the Information Lounge at TDS to browse further guides.

Sandy Bastin is head of dispute resolution at TDS.