Agents who have above average levels of tenancy deposit disputes will no longer have to pay a surcharge to The Dispute Service.
The decision, announced after a TDS board meeting on Tuesday, means that the 339 firms who were to have had extra charges imposed will now get new invoices.
However, regardless of how many tenancies are registered, all letting firms will have to pay a basic subscription of £750 per year, up from £583 last year.
The charge per property will range from £6 (the biggest ‘no claims’ discount’) to £15, with an average of £11.22. These charges will be set by the agent’s number of disputes.
The fees can, as a result of Tuesday’s meeting, now be paid in four instalments.
However, the sheer scale of problems facing TDS has not gone away.
It will adjudicate on between 14,000 and 15,000 disputes by the end of the current financial year – after budgeting for 9,000.
The figures were revealed in an email sent yesterday afternoon to ARLA and NAEA members from Robert Jordan. The former ARLA president said the earlier forecast had seemed sensible until last August, when TDS began receiving 500 disputes a week.
He said that by October it was clear that “the rate of disputes and the resources to deal with them (meaning money) were seriously out of alignment, which would mean that unless some changes were made the TDS would literally run out of money before their year end”.
Currently, disputes are coming in at a rate of 65 a day.
Jordan said this Tuesday’s TDS board meeting was ‘frank’.
Jordan ended his email, asking NFoPP members not to write to him further (he says he received over 250 emails).
He added: “All I have been is your mouthpiece. I am sorry I have not been able to negotiate deeper cuts.”
He ended: “I am now confident that with your support TDS will go from strength to strength.”
Comments
i think i have been thinking too much about this TDS debacle but however i look at it i cannot see how ARLA's actions on the matter can in any way be regarded as a fulfilment of their role to champion the interests of their members. as i see it they have hidden behind robert jordan (is he an elected and accountable member of the ARLA board?) and charged around saying 'we are where we are, lets be realistic'. well we dont know we are, we dont know where we are going and we certainly we dont know why we got in the mess in the for which we now have to pay for. if ARLA wants to protect its credibility it can answer all these 3 questions whenever it chooses. this is a far more serious crisis of credibility - i think i will be looking at the ARLA/NFoPP accounts a little more carefully this year too!
To Industry Observer: Talking of TDS Ltd Rules, what is you take on the rule 10.1.1 - the requirement for 6 months notice of resignation ....if that includes renewal season, they're doomed?
To Industry Observer your post today 14.26 refers – The role of the ADR (Greenberg) is, I am advised, separate to that of the administrative function i.e. charging and general administration. In fact, I have it on excellent authority that the TDS Ltd Board is, constitutionally, quite separate from the Council which oversees and seeks to preserve the independence of the ADR. The TDS Ltd Board on which Messrs, Hornsey, Lindo (FD), Bolton – King & the RICS representative sit, must have been aware of charging intentions and communications, that is their corporate duty. If they weren’t it is gross negligence. Further, it seems certain that Board approval must have been given to vary the charging structure. On the fees and particularly the Rule 10.1.2.b, I totally agree with you – no one has any idea what the second tranche might be – renewing ‘blind’ would be like writing a blank cheque. The custodial route must be the prudent solution in these uncertain economic times. Renew with TDS Ltd at your peril ......
Can you imagine any other profession allowing this to happen? What hope do we have of being taken seriously and elevating the status of the profession when something like this can crop up so unexpectedly. Anyone who manages an office or runs a firm has to plan for the future and expect the unexpected. Is it not forseeable that a dispute resolution service which makes no charge for its operation will be abused? I feel powerless to do anything and thanks ARLA for fighting so hard to protect your members interests! Now where's my cheque book.....
Kevin. Yes, this is true. But it may make her think twice about using the TDS ADR and would she really want to wait all that time for it to get to court and then be referred back again? Its a bit of a naughty suggestion really but it might work and, if it does, then great!
That sounds great Nicki, but anecdotally, I have heard of judges in the county courts who have refused to hear cases because the parties did not use ADR.
I repeat part of my previous post.
'THIS is the real problem. Tenants pay nothing to dispute just about everything, however frivolous, therefore as with all things FREE there will be abuse. THAT is what has to be resolved.'
ARLA get moving on our behalf.
Kevin, tell your tenant you wont agree to ADR and you'd rather take any claim of hers through the county court. She may then feel that she can't be bothered to go down that route as it would be time and effort, not to mention a cost, on her part.
Kevin – this is easy the Landlord is your client not the tenant so if the tenant wants to raise a disute she does that on her own. However here everyone can see where the excess and minimum claim is now really going to come in. Originally it was very informal and maybe anything below £50 was not worth arguing and if the Landlord wouldn’t pay it then the agent should. Any dispute has to cost the agent at least that much in time and photocopying. But now the stakes are raised. If for example a single dispute raises your fee from £6 per tenancy to £9.75p a tenancy (my company has an ARLA member office in that position) then if you have say 100 tenancies registered that one dispute costs you almost £1000 on your next fees. Still want to turn the page Alan? This whole affair just stumbles from appalling to unbvelievable. The comments on the Board and Council below are interesting – did they know what Mr Greenberg had in mind for letter content and invoices? If they did they should all resign. If they didn’t Grennberg should be sacked. Those thinking of leaving had better consult the TDFS Ltd rules because it is not that easy to escape. Look at rule 10.1.2.b – this is why everyone should be very wary of the second invoice system (and now quarterly payments). This to me reads that if an invoice has already been issued (and in the original letter it was just that you only had to pay half by March 31st) or even if it hasn’t been the member can be liable for further payment in terms of the membership fee if they then decide to leave. Initial informed advice I have sought comes to the same conclusion. Bit like car insurance, pay monthly and have a bump but if you go to another company at that point you have to pay the balance of the current year premium (which if you had paid annually in a lump sum up front you would already have done). I really do not like the look of this rule at all as if TDS Ltd loses income by agents mass emigration to DPS I can see them enforcing it if it says what I am certain it does – or at least implies. Anyone contemplating leaving also needs to be very aware of rule 10.1.2.c as if you leave the scheme but leave the already insured and paid for deposits behind with TDS Ltd you remain liable for any subsequent dispute costs. At probably £500 + VAT per case - at least!!
Can somebody help me please? I have a deposit dispute that as Agents, we have spent weeks trying to negotiate to bring to a settlement. The hours we have spent on it are disproportionate to the value of the dispute - just £80! The case for my landlord is 'black and white' and the tenant is being frivolous. However, she wants me to refer it to the TDS for dispute. She had a friend who referred a dispute and her friend only had to pay 50% of the amount being claimed.
My landlord client doesn't want to back down either and I don't see why he should. After all, the tenant caused the damage. She admits she caused the damage. She just doesn't want to pay for it until she has exhausted all possible 'free' avenues of wriggling out of her responsibilities.
In light of the absolute farce surrounding the TDS at the moment, what are we as Agents supposed to do.
Could this dispute be the one that tips the scale of charges that we now have to pay to TDS. It could end up costing me £100's.
Maybe we should pay the £80 to the Landlord client ourselves. But won't this give the tenant a sense of victory, and in turn she'll tell lots of her other friends to argue their case if ever the landlord wants to make a deduction from their deposit.
The entire legislation surrounding Deposit Protection is a joke. It doesn't work for Landlords or Agents.
I am perfectly certain that the price increases are very necessary, as the business model was profoundly flawed in the first place. A charge per office as opposed to properties included in the scheme, was a recipe for disaster. The issue here is not about that, it relates to the management of the non ADR TDS Ltd function. Thankfully for all concerned, the independence of that (ADR) is monitored by Prof Martin Partington, so no problems there. You say you understand the charging structure? - I would venture to suggest that until TDS Ltd publishes what it calculates to be the 'Average' dispute level, expressed as a percentage of tenancies the agent has within the scheme, no one can make that statement. It is also curious that the ‘Average’ includes all users i.e. presumably including RICS, NALS & The Law Society – wouldn’t you only do that if the ‘others’ improved your statistics? The general consensus of opinion based on 'posts' etc is that the handling of all this has been a disaster - turn over the page if you wish - this still provokes more questions than answers.
My invoice increased considerably and I was fairly hacked off about it. Everybody wanted to know the formula for working out the subscriptions - ARLA, through R Jordan, have got that information. Its expensive but it has to be paid (I might add that it is still hugely cheaper than mydeposits). We all know that it costs money to run a business so can we all just 'turn the page' and get on with doing the job right!
Agency Insider, let’s get this straight, ARLA created this mess starting back in 2005/6 when its then President ( R Jordan) & CEO (Adrian Turner) orchestrated the allegiances with RICS & NAEA and in conjunction with its then insurance broker, John Hornsey (now Chair of TDS Ltd) and its then internal disputes guru, Lawrence Greenberg (ICE or Chief Executive of TDS Ltd), set out to obtain a license from ODPM to operate what became known as TDS Ltd. The original intention was to exclude the rest of the letting agent industry, including NALS on whose board ARLA, RICS & NAEA sat.NALS were subsequently included at a loaded rate. ARLA was a founding shareholder and director in TDS Ltd and until the merger with NAEA, had its own seat on the TDS Ltd Board. Under the NFoPP banner, according to the Jordan e mail 3/2/10, Peter Bolton-King is one of the four directors. As such he formally represents ARLA and is legally responsible for the corporate governance, a responsibility which encompasses all aspects of the running of the business including the problem areas of finances and external communications. Robert Jordan is a fellow director of PB-K's on the NFoPP board. So the pretence that this is some kind of arms length arrangement over which ARLA has had no control is utter rubbish. I am not aware of Mike’s ‘clubs’ constitution, but they presumably have voting rights and probably even the right to call an EGM in certain extreme circumstances - such as this? A vote of no confidence might stun a few ARLA / NFoPP grandees out of their stupor? Final comment, as there were apparently four directors in attendance (including Hornsey as Chair) little comment about RICS – how many of their members will be receiving reduction, presumably in addition to the 339 ARLA / NAEA participants?
QUOTE from Robert Jordans mail: ‘charge for the dispute – the answer is simple’. It is; the big problem is that the CLG will not permit that. The contract under which TDS works has a clause which is in the contract of all three organisations offering Deposit Protection, which forbids direct charging for the dispute resolution.
THIS is the real problem. Tenants pay nothing to dispute just about everything, however frivolous, therefore as with all things FREE there will be abuse. THAT is what has to be resolved.
Well said Agency insider. About time people got their facts right and stopped throwing the dirt around in the wrong direction.
I believe ARLA are one Board Member out of five on the TDS Board? They don't therefore have control of the company or the day to day running. Back off Mike - stop blaming ARLA and let them get on with their job. I for one think that, by and large, they do a good job at representing us and fighting our corner.
Not so Mike. ARLA are board members of TDS, they don't have control of the day to day running. The question that should be asked is what were the executives of the TDS doing in letting matters get so far out of hand and then handling it so badly? They should be considering their positions.
this a disaster for the lettings industry. the myth that many of us belonged to a professional body - ARLA - that could or would stand up for our interests has finally been exploded. The 'horse has bolted' on the TDS affair and individual agents are merely left to work out whether to run with the scheme until the next disaster or use the limited alternatives. Meanwhile ARLA, in whom members placed their trust, has slept on the job and then reacted with too little action too late. This is a very sad day for our industry.