The chief executive of the Tenancy Deposit Scheme has hit back at Which? over its suggestions that alternatives would work better.

Steve Harriott said: “Which? and others continually promote the solution of the so called ‘passporting’ of deposits – allowing tenants’ existing deposits to be paid directly to a new landlord

“Our work suggests that this idea is a non-starter without some form of tenant guarantee.

“For example we have analysed the last 20,000 agreed deposit repayments we have made for TDS Custodial and in 42% of cases the tenant agreed some form of payment to the landlord (an average of £275).

“In a deposit passporting world this would mean that the new landlord would not be getting what they expected in 42% of cases.

“If you were a landlord would you take this risk?

“We also agree that there is room in some parts of the market for insurance-style options in deposit protection and this is why we are working with Zero Deposit.

“But we are stressing to the Government the need to ensure that these new providers are properly regulated by the FCA.”

However, Harriott said that some of the criticisms made by Which? were valid and echoed his own concerns.

Which? said that for one in six tenants, it took over four weeks to get their deposits back.

Harriott said that TDS fully recognised the need to resolve deposit deductions quickly, and tenants can raise the issue with TDS once ten days have elapsed from when they first asked for their deposit back.

Harriott went on: “We also share the concern of Which? about the problems that some tenants face (especially in London) of having to find another deposit for their next property whilst still waiting for their current deposit to be repaid.”

He continued: “Which? has also suggested the creation of an independent regulator for lettings and management agents.

“This is something that we can support in addition to its call for a code of practice which reflects our own code of recommended practice which we launched last year.

“It is the Which? criticisms of the existing deposit protection schemes which do need to be challenged.

“Which? says that the most common reason for deposit deductions in their survey was for cleaning and it claimed that many of those who faced deductions for this were unhappy.

“Cleaning is clearly an emotive subject as no-one likes to be told they have left their property dirty but day in and day put we see clear evidence in check out reports are properties being left in a less clean condition by the outgoing tenants.

“But we also see exaggerated claims by some landlords.

“Simply put: if the case goes to ADR and the landlord can’t evidence that a deduction is valid, then the landlord’s claim will be lost.

“We have invited Which? to our offices to see how we deal with cleaning claims so that in future they can base their recommendations on the basis of what really happens in practice.

“Which? asserts that half of tenants who didn’t get their money back in full challenged the decision. This statistic was used to make the point that the deposit protection schemes are not working effectively.

“The facts however do not support this claim as people can and do complain about decisions, all of which are investigated.

“Our statistics show that the tenancy deposit scheme is offering a really simple way for the tenants and landlords to agree who should get what.

“I believe that Which?’s conclusion that it is a system in need of fundamental reform is based on questionable evidence.

“The Which? report also claimed that there was a lack of clarity about what deposit money can be used for.

“In our actual experience, in almost all cases we see, the tenancy agreement does set out for what the deposit can be used and if there is a dispute and the tenancy agreement does not allow a specific deduction, the schemes will reject it.

“Most – 99% – of all deposits we protect don’t end up in dispute.

“Where there is a dispute, we have a robust, impartial process to ensure that the right money goes to the correct party.

“Our adjudicators start from the premise that the deposit belongs to the tenant and it is up to the landlord to prove that a deduction can and should be made.”

Harriott concluded: “Go back to pre-2007 where deposit protection did not exist and tenants regularly got ripped off by landlords and agents and this was what led to deposit protection being introduced.

“In 2018 almost all deposits are now properly protected; tenancy agreements specify what deductions can be taken by the deposit; inventories have become almost universal and of higher quality; deposit schemes have developed on-line solutions to enable tenants and landlords to negotiate the return; and free ADR exists to resolve any disputes.

“The fact is that tenancy deposit protection is a success and is something we should all be proud of.”