The Deposit Protection Service (The DPS) keeps deposit money safe for letting agents, landlords and renters during the course a tenancy. Its free, government-accredited custodial tenancy deposit protection scheme has protected over five million deposits over the last decade.
Its Dispute Resolution Service allows landlords, letting agents and tenants to resolve disputes without resorting to lengthy or expensive court procedures, and over the last decade has adjudicated over 60,000 disputes.
In our adjudication case study series, The DPS’ head of adjudication, Alexandra Coghlan-Forbes, is going to share examples of recent, real-life case studies with us.
She talks us through the guidelines that affect the way her team reaches decisions to help agents and landlords understand the process.
Our fifth case study looks at charges levelled at what happens when a landlord attempts to claim a re-protection deposit from a tenant leaving a joint tenancy…
One tenant was leaving a joint tenancy of four people. The landlord claimed £1,299 to re-protect the deposit for the three tenants still living at the property.
The tenant responded that the landlord had not given a sufficient reason why they were claiming the money.
The leaving tenant disputed the claim, arguing that the remaining tenants had agreed their deposit shares would be carried over to the new tenancy.
The leaving tenant also argued that they were not given any information by the landlord about re-protection.
The landlord did not supply any evidence to support the re-claiming of the deposit.
The landlord’s claim did not show that the tenants had breached their contract. The adjudicator can only make awards to compensate the landlord or letting agent for losses incurred as a result of a breach of obligation by the tenant.
As a result, the adjudicator had no choice but to return the deposit to the tenants.
For the deposit to be re-protected, the landlord would need the tenants remaining in the property to repay their share of the deposit for a new tenancy.
In law, joint tenants act together and if one of them leaves, the tenancy ends. In situations where one or more joint tenants leave a property, but others stay on, the landlord or letting agent must arrange a new tenancy arrangement.
He or she should repay the original deposit to the joint tenants, minus any agreed deductions, and take a new deposit from the tenants staying in the property and any new tenants.
The landlord or letting agent should also compile a fresh inventory for the new joint tenancy.
When there are changes to a joint tenancy, we often encounter disputes that arise because there was no inspection of the property or completion of a new inventory.
While there are practical difficulties in compiling a new inventory where some tenants are not vacating, it can cause considerable problems in any future dispute.
It’s down to the landlord or letting agent to decide whether the cost of compiling a new inventory outweighs the risk of having insufficient evidence to support any future claim.
Relying on an original inventory for evidence in a case where tenants have changed makes it very difficult for the adjudicator to identify which tenants were responsible for any damages. This makes it more likely that the landlord’s claim will fail.
*Alexandra Coghlan-Forbes is head of adjudication at The DPS