21 September 2009

TDS, Evidence, and Bias

We often hear allegations that tenancy deposit protection schemes are biased towards tenants. This is part conceals a fundamental misunderstanding of the nature of a deposit.

The tenant’s deposit belongs to the tenant and continues to do so until such time as the landlord becomes entitled to make reasonable deductions from it. Therefore the default position is that all the deposit should be returned to the tenant unless the landlord demonstrates that the deposit should be sent to them. This is not bias but the correct application of the law.

It is for landlords to show that the tenant’s deposit or parts of it should be passed to them by providing evidence of the tenant’s breaches of the tenancy agreement. This should be weighed on the balance of probabilities but the landlord will need to provide solid evidence that the loss or damage has occurred and that the valuation placed on it is realistic. Where this is not provided or the tenant provides evidence to the contrary then the money should be returned to the tenant.

In summary, the various schemes are no more biased than the Courts. They start from the proposition that the money belongs to the tenant and require the landlord to show that it should be given to them. Where insufficient evidence of that proposition is provided then the money will be returned to the tenant.

Accusations of bias toward tenant should perhaps be viewed as an admission that the landlord could not make a strong enough case. Looking at the statistics it can be seen that the schemes make awards almost equally to both parties. Given that they should be starting from the premise that the money is the tenant’s this shows that landlords do relatively well from scheme adjudications.

David Smith, PainSmith Solicitors

http://painsmith.wordpress.com/2009/09/09/tds-evidence-and-bias/

http://www.painsmith.co.uk/ 

Ellie Irwin
mydeposits.co.uk
E: ellie.irwin@mydeposits.co.uk
T: 020 7840 8925

NOTES TO EDITORS:

About mydeposits.co.uk:

Mydeposits is the trading name of Tenancy Deposit Solutions Limited, a company jointly owned by the National Landlords Association and HFIS plc T/A Hamilton Fraser Insurance (the Scheme Administrator) to deliver an insurance-backed tenancy deposit protection scheme under contract from Communities & Local Government. Landlords and letting agents wishing to use this scheme are required to register with the Scheme Administrator. They can find out more and register by visiting www.mydeposits.co.uk. Registered members of the Scheme are able to protect and unprotect deposits at the beginning and end of tenancies. Fees are tax-deductible. In the event of a dispute at the end of the tenancy agreement, both parties are offered access to alternative dispute resolution (ADR). This procedure will be evidence-based, relying on documentation and records.