The Tenancy Deposit Scheme (TDS) has ordered Cedar Estates in West Hampstead, northwest London, to return a tenancy deposit to tenants which was being used to cover what the agency saw as rent arrears.

The TDS ruled that Cedar Estates of North London was wrong to retain the deposit to cover rent arrears, cleaning and the cost of damages to a two-bedroom flat in Camden, The Mirror reports.

Charity worker Hadley, 34, spent months fighting Cedar Estates to get the money back after they kept £1,725 of their £2,225 deposit to cover supposed rent arrears, cleaning fees and damages

Hadley and her flatmate won back £1,655 from their letting agent after taking their deposit dispute to the Tenancy Deposit Scheme (TDS)

Hadley lived in a ground floor two-bed flat in Camden with her friend, who is a teacher, but the duo decided to leave after spending nearly four years there as their rent was set to rise by more than £400 a month.

Hadley explained: “The letting agent rang us in April to tell us the rent was going up from £1,928 a month to £2,383. We just couldn’t afford that. We had been thinking about moving since the start of the year, but with the rent rise, we couldn’t justify staying so we agreed to leave.”

The pair told the letting agent, Cedar Estates, on 13 April 2023 that they would not be renewing their contract, which was due to expire on 24 June, and they began their search for a new home. But a few weeks later on 4 May, the estate agent called Hadley and asked whether they could move out 20 days earlier than originally agreed as a new tenant was keen to move in.

After agreeing, a Deed of Surrender was drawn up and delivered to the pair on 17 May to sign.

After three follow-ups from Cedar Estates across multiple days, Hadley and her housemate signed the contract on 19 May.

Hadley added: “We signed and received confirmation that it was completed. Everything felt settled. We had the new flat secured, we started to plan the move and start packing, and as sad as I was to be leaving, I was looking forward to getting settled in a new place. Before we left, my mum travelled from the West Midlands and spent an entire day deep cleaning the flat with us, and we also hired a professional gardener.”

But a few days Cedar Estates informed the tenants that due to “unforeseen visa issues” the new tenant could not move in. This was when Hadley found out that her landlord never signed the Deed of Surrender, with Cedar Estates telling her that they were now liable for the rent until the contract ended on 24 June.

The pair moved out on 5 June as originally planned as they had only paid rent until this date. Hadley requested their deposit, but this was refused by Cedar Estates. They flagged a “rent arrears” issue on their tenancy, which meant the pair were also not able to receive a full refund on their overpaid council tax from Camden Council.

Hadley commented: “At the end of our tenancy, we should’ve received our entire deposit back, but we were told that £270 was needed to cover cleaning fees, £150 was needed to replace a broken bathroom sink, and £1,305 to cover rent arrears, but we had paid all of our rent, there were no rent arrears whatsoever.”

Hadley continued: “Why should we be responsible for the rental or council tax shortfall that resulted from something that was completely outside of our control as outgoing tenants?

“We were given just 14 working days to collate all of our evidence, all our counterarguments to their claim and submit. I was lucky to have my dad to help us because he has a background in construction and some understanding of the law. He was able to help us map out our case and tell us what language and evidence we needed.”

Hadley gathered a mass amount of evidence for her TDS case which included a timeline of events, rent payment history, pictures, videos, and all communication between the two parties including emails, and phone calls. She added: “This wasn’t my full-time job, so I was putting together our case pretty much at every spare moment I had. It was a lot of pressure mentally and at this time, my housemate wanted to forfeit the entire deposit as she couldn’t cope with the stress, anxiety and arguments it was causing.”

TDS published its conclusion on 14 December and sided with Hadley. This meant Hadley and her housemate would receive most of their money back, apart from £70 to cover cleaning fees. In total, the pair received back £1,655.

The decision report noted that Hadley and her housemate signed the Deed with the full understanding that they would leave early – and even though the landlord had not signed, the TDS was “satisfied” that Cedar Estate follow ups gave the pair confirmation that they had.

The TDS said it “acknowledged” Cedar Estate’s argument that as the new tenants did not sign onto a new tenancy, the Deed was invalid – however, this term was “not included” within the written agreement so couldn’t be argued. The TDS also stated that no evidence was provided by Cedar Estates to show the tenants had pulled out before a new contract was signed, and they were not in breach of their obligation.

The TDS decision meant that Hadley was able to also recover £98 that was missing from her council tax overpayment due to the rent arrears dispute. However, this took two months because Cedar Estates raised an appeal.

A spokesperson from Camden Council said: “We will always look to assist our residents as swiftly as possible with any issues or queries they have with their council tax. We appreciate the difficult position faced by the former tenants, however, Camden had to hold them liable until the original end date of the tenancy because the landlord continued to dispute this and did not sign the deed of surrender. This was despite the separate Tenancy Deposit Scheme decision.”