Tenant Rights When There is a Deposit Dispute with the Landlord

tenant rights deposit disputeA deposit for a rented property is a financial pledge that, as a tenant, we will follow the terms of the tenancy agreement at the risk of losing money if those terms are broken. For the most part, this isn’t a problem. We pay our deposit and get it back at the end of our tenancy agreement. Landlords call this a damage deposit from which they can subtract the cost of any damages at the end of the tenancy that are beyond reasonable wear and tear. Generally, most tenants get their deposit back with no problems, but this isn’t always the case. So what do you do when you haven’t actually broken any of the terms in your tenancy agreement and your landlord refuses to return your deposit? Here are the rights you have as a tenant in this situation. Don’t feel defeated as there are options out there for you.


Deposit Protection Scheme

The Government introduced new laws in 2007 that landlords must follow regarding tenancy deposits. The law states that a landlord must place your deposit into a deposit protection scheme run by an independent third-party. This protects you if, for example, your landlord is unable to honour the deposit. Your landlord has ten days to return your deposit if you both agree on the amount of money you should receive. The deposit scheme will offer a free alternative dispute resolution service should your landlord be unwilling to return your deposit or you are unable to agree on the final amount owed.  You do not need to contact your landlord to use this service and the contact information for this should be in your tenancy pack.
There are two types of deposit protection schemes that your landlord can use; a custodial scheme and an insurance-based scheme. If your landlord has opted for a custodial scheme then the company will hold on to the disputed amount of money until an agreement has been made. The custodial scheme pays the remaining deposit straight to you once the dispute is over. If your landlord has used an insurance-based scheme then the landlord must pay any disputed amounts to the scheme until an agreement has been made.


Property Law Solicitors

You will need to seek legal advice if you believe that your landlord did not place your money in a deposit protection scheme. Your landlord has failed to follow the law if so, and they could be ordered to pay back not only your deposit but additional fines as compensation by a small claims judge within two weeks of a court decision. We recommend speaking to a property law solicitor before taking your landlord to court so that you get the best advice.

Alternative Options

You still have rights if your landlord has failed to join a deposit protection scheme. If your landlord is refusing to return your deposit then make sure you check over your tenancy agreement carefully. There should be a clause in your tenancy agreement that allows your landlord to keep your damage deposit if damage goes beyond reasonable wear and tear. If this clause is missing then your landlord does not have the right to keep your deposit.

If your landlord is disputing damages to property beyond reasonable wear or tear or missing items then ask them to provide you with an initial inventory from the start of your tenancy agreement. Check the property against this initial inventory. If you dispute the damages or missing items you should support your dispute with photographs of the items/damage or by going through the property and matching the inventory with your landlord.

If you still dispute the withheld deposit, or your landlord has failed to include a clause about your deposit in your tenancy agreement then your next step is to write to your landlord or letting agent. In your letter you should state your evidence, i.e. missing clause, and demand for the deposit to be returned within 14 days. Include in your letter that failure to do so will leave you with no option but to take the case to the Small Claims Court as your landlord has not followed the 2007 deposit protection law. Speak to a property law solicitor or contact your local Citizen Advice Bureau for help with this.