Most people prefer to use Tenancy Deposit Scheme (TDS) because they feel that this way of dispute resolution will be quicker, cheaper and less stressful than going to Court. Like the Courts, TDS is independent and authoritative, however TDS can only resolve a dispute if the tenancy has ended, the deposit is registered with us, and the dispute is about the deposit. Both landlord and tenant must agree to alternative dispute resolution (ADR).
Either the landlord or the tenant can decide to take their deposit dispute to Court if they prefer this form of dispute resolution. This is because there may be other areas in dispute that do not relate to the deposit or the tenancy, for example, counterclaims by a tenant, complaints by a landlord against an agent or contractor due to their conduct, or disputes between landlords/tenants themselves. TDS is unable to consider these wider issues and therefore the dispute may be better taken to appropriate redress schemes or court, where all issues can be dealt with together.
If using our Insured scheme, which is where the agent or landlord holds the deposit, at the end of the tenancy and prior to raising a dispute with TDS, you obtain a Court Order, you will need to act upon the directions set out in the Court Order, without referral to TDS. Once the issue has been resolved by the Court it is important for the agent or landlord to then end the protection in their TDS Insured account.
If a party tells us after a dispute is raised with TDS, and the disputed deposit has been sent to us, that the dispute is being resolved through the courts, unless the Court refers the dispute back to us or there is evidence that the proceedings have been discontinued, we will not be able to resolve the dispute. In this instance, we will retain the disputed deposit until we receive a copy of a Court Order informing us that the dispute has been resolved by the Court and the outcome of those proceedings.
If using our Custodial scheme, where TDS holds the deposit, if a Court Order is obtained, you will need to provide TDS with a copy of the Court Order.
On receipt of a copy of a Court Order, we will need to see that the Court Order makes a specific statement about what is to happen to the disputed deposit held by TDS and to whom it should be paid. We will also need to ensure that the Court Order is final, that the time to appeal has passed, and whether any payments have already been made under the Court Order.
If you are interested in further guidance relating to deposit disputes, visit the Information Lounge at TDS to browse further guides and case studies.
Sandy Bastin is head of dispute resolution at TDS.