Tenancy deposit rules side with tenants, says agent

News Category: Industry News

A letting agent has accused the TDS of failing to address the fundamental problem of tenants raising spurious disputes, knowing that it costs them nothing to do so and they might as well “gamble on recovering some of their money”.

Ian Sanford, managing director of Pennington Properties in Huntingdon, Cambridgeshire, wrote to TDS chairman Professor Martin Partington following the TDS’s latest letter and invoices to its members.

Sanford wrote: “It would appear, reading between the lines, that TDS would rather agents themselves paid for dilapidations to properties to keep their landlords happy and refunded deposits to tenants in full to avoid the likelihood of a dispute being instigated – hardly a fair and equable system.”

He added: “I am also concerned about your comments regarding the fact that you are increasingly relying on your own resources or your insurance policy to return deposits. Surely you should not be accepting an agent into the scheme who does not comply with the strict accounting regime required by ARLA. If you are accepting less than this standard, then I am not surprised that you are experiencing problems.

“Disputes raised by tenants appear to be accepted on face value by your office and once in the system become registered against that agent, whatever their merits, thereby effectively increasing the agent’s subscription.

“We recently had a situation where we initially paid tenants back part of their deposit and advised them that, because of some apparent damage to the carpets, we were having them examined by a carpet contractor, and that, until we received his report, we would be unable to deal with the balance of their deposit. In the event, following receipt of the report, the landlords accepted the damage as ‘fair wear and tear’. The tenants were then refunded the balance of their deposit but in the meantime had raised a dispute with TDS, so another one was ‘chalked up’ against us.”

He said the first he knew that the tenants were disputing the deductions was when paperwork was received from the TDS.

He said: “Would it not be sensible, when receiving disputes from tenants, for your office to email the agent first to ask whether the matter was still subject to negotiation, whether the agent intended to go to adjudication or maybe even settle with the tenant if the amount was deemed to be trivial, before entering the case into the system?”

Sanford also said that, contrary to prescribed procedures, the TDS apparently allows to raise disputes up to six months after the end of the tenancy – “a period which is totally unreasonable and disadvantageous to the agent and landlord when monies will have already been disbursed”.

Sanford went on: “It is interesting to note that the other two tenancy deposit protection schemes do not appear to be suffering the same problems as TDS with an escalating number of disputes. Perhaps TDS should consult with them to find out why this is the case.”

He concluded: “Although I agree entirely with the principal of deposit protection, I believe that the scheme is flawed and that you should be lobbying the new Government to change the rules so that tenants and landlords pay a modest fee of, say, £25, when raising a dispute. This fee would be repaid if the dispute was well-founded but forfeited if found to be spurious. The benefits of this arrangement would be to help eliminate disputes raised for small amounts and possibly bring some welcome additional income for TDS.”


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