Tenancy Deposit Protection - Resolving Disputes

If a dispute occurs and no agreements can be reached about how much of the deposit should be returned, there will be a free service, offered by the scheme protecting the deposit to help resolve any disputes – the Alternative Dispute Resolution (ADR) service.

What happens if there is a dispute?

When a dispute occurs, and if landlord and tenant both agree to use the service to resolve disputes offered by their scheme provider, they are agreeing to be bound by its decision.

Custodial scheme

A landlord or tenant does not agree to the release of full or part of the deposit so ADR will be the default way in which to resolve a dispute. If there is a dispute, the scheme will continue to hold the amount until the ADR or courts decide what is fair.

Insurance schemes

If the landlord is refusing to co-operate with the scheme to resolve the dispute, it will be mandatory for the case to be referred to the scheme’s ADR service.

If there is a dispute and the deposit is safeguarded by an insurance-based scheme, the landlord must hand over the disputed amount to the scheme for safekeeping until the dispute is resolved.

The scheme administrator will divide the disputed amount in accordance with the ADR service's, or court's decision.

If the landlord fails to transfer the disputed amount into the scheme then the scheme will pay the amount due to the tenant as a result of the ADR service's or court's decision. The scheme will then recover the money from the landlord.

Crown copyright material retrieved from http://www.direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/RentingAHome/