The Tenant Deposit Scheme (TDS) has instituted a new Alternate Dispute Resolution (ADR) procedure to help landlords and tenants resolve deposit disputes more quickly and outside of the courts. As most tenants and landlords know, relying on the courts to decide deposit disputes is both timely and costly for both parties.

Parties to the tenancy can agree to the new ADR procedure in a variety of ways: the agreement can be written into the tenancy agreement itself; when either the landlord or tenant sends the dispute to TDS; or when responding to a dispute that has been sent to TDS. If there are multiple tenants to the lease agreement, consent must be obtained from at least one of them in order for TDS to adjudicate the deposit dispute and provided none of the other tenants object to doing so. For disputes that don’t satisfy these requirements, parties will have to resolve the matter through the courts.

The ADR procedure is free to both landlord and tenant, although each party is able to use legal experts in the matter. However, costs incurred are not under the arbitrator’s discretion to award.

Just as in a court proceeding, the decision is based upon evidence – landlords who don’t take care to prepare detailed inventories and provide photographic evidence are likely to receive the short end of the stick. Likewise, there are forms and deadlines accompanying the procedure that must be followed. Should either party fail to strictly adhere to said deadlines, the Deposit Protection Service will pay out the deposit in accordance with the other party’s claim.

Alternate Dispute Resolution has gained widespread approval throughout many areas of the law as a quicker more cost-effective means of resolving disputes. With the backlog of cases in the courts, ADR has proven more efficient as well. Although traditionally tenants and landlords have rebuffed ADR, in my opinion, property and deposit issues are very appropriate to the ADR process, which is heavily evidence based.

John Bishop
Tel. 020 3301 7815
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