Deposit disputes rise by 25%

Deposit disputes rise by 25%

The latest TDS stats show that there has been a steep 25% rise in tenancy deposit disputes, with one-third of agents making claims.

This escalation in disputes is a worrying trend for agents and landlords and the key question is, what gives them the best chance of winning a deposit dispute – an in-house or third party inventory?      

Many agents instruct an independent third party to combat any conflict of interest issues that may arise in the event of a dilapidations dispute.  But, according to Imfuna Let, the UK’s leading inventory software solution, the independence and impartiality of a third party report can always be called into question, where the landlord or the agent instructs and pays their favoured independent provider to produce it.

Howard Lester, Director of Balgores Property Group comments: “Since the introduction of the Tenant Deposit Scheme, we have seen a steady and sharp rise in disputes. Over the last few years, these have changed in nature from the situations where agreement just couldn't be reached between the landlord and tenant, to parties just trying their luck as the realisation kicks in that the process is free of charge.

In order to reduce the amount of disputes, Balgores Lettings has been steadily increasing the quality of its inventories, using several apps over the last few years, with more photos and better descriptions. Additionally, we have employed our own clerks, improved the quality of their inspections and introduced pre-checkout visits to offer tenants advice on which items are likely to lead to deductions, if not corrected before the final checkout.


We have experienced a 25% fall in disputes requiring TDS adjudication, compared with last year.  We believe that by working with top inventory software companies, employing our own well trained clerks, as well as having a member of our management team who specialises in negotiating settlements, we have been able to buck the trend of rising disputes.

Perhaps one of the biggest help in this reduction has been the introduction of pre-checkout visits, where we are able to show the tenant the original inventory three weeks before the checkout.  We find very few issues when the final inspection takes place.

To make this work to its best ability, we have always looked to use the clearest and most concise inventories, so we are in the process of transferring to Imfuna Let. The software’s before and after pictures convinced us to switch. As well as being great for the tenants, we have found that landlords are more willing to accept wear & tear, as they are able to see the process throughout the tenancy with mid-term property inspection reports being sent to them.

Over the last 12 months, more than 65% of disputes have been settled in favour of the landlords we represent.  This goes to prove that if you have a quality inventory prepared, properly recorded inspections and checkouts carried out, then you are less likely to end up in a dispute with the tenant.”

Jax Kneppers, Founder and CEO of Imfuna Let comments: “The tenancy deposit is the tenant's money and the onus lies with the landlord to provide indisputable proof of dilapidations before compensation can be awarded. The deposit scheme adjudicators are only concerned with the evidence presented in support of a compensation claim and not the source of the inventory report documentation.  Who actually instructs and completes the inventory is irrelevant and to date there is no legislation to the contrary, which is extremely unlikely to change at any time in the future.  

Instructing an independent third party will not free the managing agent from their obligation to obtain quotes in support of any proposed deposit deductions after the check-out, or to negotiate a settlement with a potentially difficult tenant, who may be hell bent on initiating a dispute with the deposit scheme, regardless. Not to mention the landlord, who may not understand the concepts of fair wear and tear and betterment and whose future custom may well be at risk if an adjudicator's decision is unfavourable, as a result of a poor quality report supplied by the agent's recommended provider.

Inventory providers' terms are full of disclaimers, including responsibility for accuracy, which ultimately lies with the landlord. Any admission of liability for an error on their part will probably revolve around the volume of business received from the agent, which again contradicts the independence issue.

We offer agents a world-class inventory software application, Imfuna Let, which produces detailed, professional and branded in-house inspections reports from just £1 each. The software also provides a valuable new income stream.”

Join our mailing list:

Leave a comment



Our Next Event

Buy-to-Let Roadshow April 2017

Buy-to-Let Roadshow April 2017

Crewe - 18/04/2017

Northampton - 19/04/2017

Essex - 20/04/2017

Brighton - 21/04/2017

Register now

Latest Comments

MBM Homelets
MBM Homelets 23 Mar 2017

Although this is a very positive step, there is little or no guarantee of the standard of workmanship employed by the tenants. We have had experience of a professionally decorated property being ' painted'...

view article
ajay
ajay 21 Mar 2017

How is the "robust evidence" looking now?

view article
NathanG
NathanG 20 Mar 2017

I've been watching the series so far and am completely baffled by the cases that were presented. Though, I don't think that we can protect ourselves from every scam possible - it will just make the scammers...

view article
Landlady14
Landlady14 01 Mar 2017

You would think so Niraj Shah! My experience only proves that there are varying qualitiers of professional in all aspects of property letting. None of the ones I have dealt with, from letting agents to...

view article
Mark
Mark 01 Mar 2017

Thanks for this article. Hopefully one day everybody's lifestyle will be eco-sustainable.

view article
Ben Taylor
Ben Taylor 28 Feb 2017

I was convinced that London was the most expensive!

view article
Alan Read
Alan Read 28 Feb 2017

Australia are leading the way in this I think. The trouble with Britain is we don't get enough sun to make use of solar power.

view article
James Powell
James Powell 27 Feb 2017

This is a very good news.

view article
DanHumphreys
DanHumphreys 27 Feb 2017

It sounds like a good idea. Anything to help the younger generation get a foothold.

view article
Matt
Matt 20 Feb 2017

Is this fake news?

view article
Matthew Hollywood
Matthew Hollywood 07 Feb 2017

Matthew Hollywood - Director Mishon Mackay Land & New Homes - Brighton The shortage of New Homes is in part effected by the lack of land sales. Land sales are held back because there is a disparity between...

view article
CommercialTrust
CommercialTrust 30 Jan 2017

Hi Graham, Would be interesting to see the above figure calculated against an investment via a Lt Company /SPV structure and if the investor found themselves pushed in to the higher tax bracket. Mortgage...

view article

Related stories

More articles from Landlords

Buy-to-Let Roadshow
April 2017

18th-21st April

4 days
7 specialists
4 locations
Free to attend

Click here to register now