Tenancy deposit schemes come in two flavours, insurance based or custodial. The Deposit Protection Service runs the one and only custodial scheme which is free of charge for landlords to use (although coming soon the DPS will have an insured scheme option). The significant difference between custodial and insurance based is that the deposit money is held by the custodial scheme during the tenancy and insurance based is held by the landlord unless there becomes a dispute in which case like the custodial, the insurance based will hold the disputed amount of deposit.
From April 2012, any deposit received in connection with an assured shorthold tenancy must be protected with one of the schemes within 30 days. In addition, certain prescribed information must be given by the landlord to the tenant.
This article looks at the position where a tenant has abandoned a property or is being un-cooperative regarding the return of the deposit and mostly focuses on the single claim procedure which must be followed by the custodial scheme. This procedure allows one party (landlord or tenant) to make an application for the deposit to be repaid to them (or part of the deposit) without the need for the other party’s consent.
For the Deposit Protection Service (DPS), the following in summary will occur where a deposit is to be repaid.
- If landlord agrees all deposit is to be returned to tenant, landlord authorises full payment back to tenant
- If landlord wishes some or all of deposit, repayment requested
- DPS will notify tenant of request
- If no response, landlord to serve notice on tenant giving 14 days
- If still no response, single claim commenced
- If DPS satisfied with single claim, payment is made to landlord within 10 days.
After logging in to your DPS account and you have requested repayment in the usual way, the DPS will notify the tenant (or now ex tenant) that you have made a request to be paid the deposit. You can see which payments are awaiting a response from a tenant from the Ongoing Repayments screen on the DPS website.
Wait for a response
There is no time limit to wait contained in the Housing Act 2004 once this first request has been made so it will be a case of common sense. Clearly you need to give sufficient time for the tenant to respond because if they respond then it will follow the usual procedure (agreement or dispute).
If the tenant fails to respond within a reasonable time (and I suggest around 14 days), then they will become absent or un-cooperative.
Absent or un-cooperative tenant
If the tenant is un-cooperative and fails to respond, then the procedures as laid out in Schedule 10, Housing Act 2004 take effect which allows for a single claim to be made.
When can a single claim be made?
A single claim process may be made if:
- at least 14 days have elapsed since the day on which the tenancy ended;
- the landlord and tenant have not reached an agreement with respect to the amount of deposit claimed;  and
- the landlord believes that he is entitled to be paid the amount claimed and that the amount claimed is one of the following:
- unpaid rent or any other sum due under the terms of the tenancy; or
- damage to the premises subject to the tenancy, or
- loss of or damage to property on those premises
and non of the above may include damage caused by fair wear and tear.