Tenancy deposit disputes explained: Process, evidence and what to do

A tenancy deposit dispute occurs when a landlord and tenant disagree on proposed settlements at the end of a tenancy. When this happens, a formal resolution process can be used. Alternative Dispute Resolution is free to use, and the tenancy deposit schemes are there to decide on what is fair and reasonable in the circumstances, having considered the evidence provided.

Important upcoming changes: The Renters’ Rights Act

Significant updates to private renting in England will take effect from 1 May 2026 through the Renters’ Rights Act. Key changes include:

• No more Section 21 notices: Landlords will be unable to issue ‘no fault’ Section 21 eviction notices any longer. Instead, notice to end a tenancy will require a legal ground, such as rent arrears or property sale through a Section 8 notice
• Move to periodic tenancies: Assured shorthold tenancies (AST) will convert automatically to periodic assured tenancies. These arrangements continue monthly and have no fixed end date, offering tenants more security and flexibility
• Rent increase restrictions: Landlords will only be able to increase rent once a year, by providing at least two months’ notice, and tenants will be able to challenge excessive rent through a tribunal
• Right to request pet ownership: Tenants will be able to request to keep a pet, and landlords may only refuse with a valid reason. Read more on Lets with pets: A guide for landlords
• Longer notice to end tenancy: Tenants will need to give at least two months’ notice to leave a tenancy, unless a shorter notice is mutually agreed

These changes are designed to strengthen tenant rights and clarify landlord responsibilities. While the end of tenancy resolution process remains strictly evidence based, these new rules may influence any future negotiation about notice, tenancy terms, and responsibilities at the end of tenancy.

For now, current end of tenancy deposit resolution rules and procedures remain in place. All guidance in this page reflects current legislation unless otherwise stated.

What is an ‘end of tenancy’ dispute?

When negotiation is unsuccessful on how the deposit should be distributed after the tenancy has ended, a formal resolution may be needed.

When a tenancy ends, the property should be left in a condition that matches the start of the tenancy, having taken into consideration reasonable use, over time (fair wear and tear). If the landlord believes the tenant has left the property in a worse condition than this, they may propose settlements to cover financial losses.

From a landlord perspective, the deposit acts as protection towards unpaid rent, property damage, or cleaning issues. Landlords need to make sure their property investment is protected and that they are not left out of pocket for deterioration caused by the tenant (other than reasonable wear and tear). Read more on our guide ‘Landlord deposit disputes: How to handle disagreements and protect your position’.

For a tenant, the deposit is their money and it is in their interests to look after the property to make sure it is returned in full when the tenancy ends so they have funds towards their next deposit. Read more on our guide ‘Tenant deposit disputes: How to make sure you get your deposit back’.

They should rightly challenge any proposed settlements they feel are unjustified, excessive, or relate to issues that were present before they moved in. When negotiating is unsuccessful, formal resolution becomes an option for a fair and impartial decision.

When do end of tenancy disputes happen?

Deposit disagreements begin in the weeks following the end of a tenancy. Once the tenant has moved out, the landlord or their letting agent will inspect the property, which will highlight any differences from its condition at the start of the tenancy. This check out report should then be shared with the tenant. If the landlord believes the tenant has caused damage beyond fair wear and tear, discussions will begin, which is where disputes often surface.

The resolution process depends on the type of deposit scheme:

Insurance scheme: A dispute must be raised within 3 calendar months minus 1 day from the date the tenant vacates the property or the date the deposit is unprotected, whichever comes first. For example, if a tenant moves out on 4 April, the deadline to raise a dispute is midnight on 3 July.

Custodial scheme: The process depends on the platform’s negotiation stages. After one full round of negotiation between the tenant and landlord, the responding party can initiate the formal dispute resolution process.

The most frequent triggers for end of tenancy disagreements include:

• Cleaning: This is consistently the most common issue and relates to the standard of cleaning required. A property must be returned cleaned to the same standard as at the start of the tenancy
• Damages: Landlords may propose settlements for broken furniture items, stained carpets, or damaged fixtures if they were caused by the tenant. Tenants often argue that the damage is just wear and tear, was an accident or pre dated their tenancy
• Missing items: If items listed on the original inventory are not present at check out, the landlord wishes to replace them
• Wear and tear disagreements: This is often the most tricky part of any proposed calculation and needs to be objective. A landlord is responsible for the gradual deterioration of a property through normal, everyday use. Disputes frequently occur when landlords mistake fair wear and tear for tenant damage
• Redecoration costs: Tenants may have painted walls without permission, or left excessive marks requiring the landlord to repaint a wall or the entire room
• Rent arrears or unpaid bills: While often clear and less subjective than damage, issues can still occur if there is confusion over final rent calculations or outstanding utility bills

The tenancy deposit resolution process step by step

Understanding the resolution process helps both parties navigate the end of a tenancy with clarity and confidence. The process follows a structured path designed to encourage agreement before escalating to a formal adjudication.

Step 1: Tenancy ends

The tenant vacates the property, removes all personal belongings, and returns the keys. The landlord or their representative conducts a thorough check out inspection to assess the property condition against the initial check in inventory.

Step 2: Settlements proposed

Within a few days of the tenancy ending, the landlord informs the tenant in writing of any proposed deductions. This communication should include a clear breakdown of cost and calculations, if possible, and the reasons for each charge.

Step 3: Tenant responds

The tenant reviews the landlord’s proposals and should respond saying which charges they accept and which they challenge. Ignoring the landlord’s communication will only delay the process. See the guide ‘Deposit not returned within 10 days in the UK: What to do‘ for information on delays.

Step 4: Agreement or disagreement

Both parties should willingly discuss and share evidence with each other, such as photographs and invoices, to try and reach a compromise. If they agree on a final figure, the agreed amount is withheld by the landlord and the balance paid to the tenant.

Step 5: Resolution requested

If negotiation is unsuccessful and no agreement is reached, both parties can use the  tenancy deposit schemes and their free resolution services. It’s important to understand that both parties must agree to using the resolution services. The process for requesting resolution differs depending on the type of deposit scheme:

For an insurance scheme, a dispute must be raised within three calendar months (minus one day) from the date the tenant moves out or the date the deposit becomes unprotected, whichever is earlier. For custodial schemes, the process depends on the platform’s specific negotiation stages. Typically, after a full round of negotiation between the tenant and landlord has been completed, the party that responded can then start the formal dispute resolution process.

 If the tenant or landlord refuses to use the service, the other party may have to take the case to court.

Step 6: Evidence submitted

For our Insured scheme:

Once a dispute is raised, both parties will be asked to submit evidence.

The tenant must provide their evidence when they raise the dispute. If they have more to add, they must let us know at this point and will have 10 working days to provide it.

The landlord then has 20 working days to submit their evidence. Within the first 10 working days of this period, they must lodge the disputed amount with us and confirm whether they will use our Alternative Dispute Resolution (ADR) service or the courts.

For our Custodial scheme:

After a period of negotiation, the responding party can initiate the formal dispute resolution process. At this stage, both parties have a final 5 working days to review and submit any last pieces of evidence before the case is sent to an assessor.

Step 7: Adjudication

The adjudicator will review all the documents provided but do not visit the property or speak directly to the parties. They make a decision entirely based on the written evidence. This is why making sure you prepare all the evidence is important. Read more on how to prepare evidence for resolution here. 

Step 8: Decision and payment

The adjudicator will send both parties a detailed written report explaining their decision. This decision is final and binding on both parties.

By using this service, both the landlord and tenant agree in advance to accept the adjudicator’s decision as the final outcome. The deposit scheme will then distribute the money in line with that decision, bringing the case to a close.

While parties may challenge a decision through the courts, this is not a route to reargue the case, and is rarely successful.

What is ADR (Alternative Dispute Resolution)?

Alternative Dispute Resolution, commonly referred to as ADR, is a free resolution service provided by all government authorised tenancy deposit schemes in the UK. It is designed to settle disagreements between landlords and tenants over returning the deposit, avoiding the need for stressful, slow, and expensive court action.

This process is independent and impartial, with all adjudicators being highly trained professionals with excellent knowledge of housing law, tenancy agreements, and property management. Their role is to act as a neutral third party with no personal interest in the outcome.

When you use this service, you agree to accept the adjudicator’s decision. Because the process is entirely evidence based, its success depends on the quality of the documentation provided by both parties. 

ADR is the preferred method for resolving end of tenancy deposit disagreements, and it is faster and more accessible than the legal system. For more information, read our guide to our resolution service.

What evidence is needed for a deposit dispute?

Evidence is the foundation of any deposit dispute. Because adjudicators are unable to visit the property to see the condition for themselves, they rely 100 per cent on the documents you provide.

To build a strong case, you should collect the following essential evidence for the resolution process:

• The tenancy agreement: This is the legal contract setting out both parties responsibilities. It informs the tenant what they should do in relation to maintenance, cleaning, and rent. A tenant should have a copy of this right at the beginning of the tenancy
• Inventory and check in report: This is often the most important document as it sets up the base for the whole tenancy. It must be a detailed, written record of the property’s condition and contents on the day the tenant moved in. It should be signed by the tenant and a copy sent to them for reference with an option to review and report any additional issues within the first seven to ten days. Find out more at Inventories – the complete guide
• Check out report: Conducted at the end of the tenancy, this document is compared directly with the check in report to identify any changes in condition, missing items, or cleaning issues
• Photographs and videos: Visual evidence is highly relied upon. Photographs must be clear, taken in good light, and date stamped. They are often included in the check in and check out reports and should show the condition of specific items and the general property and keys at the start and the end of the tenancy
• Invoices, estimates, and receipts: Landlords must show that the tenant is responsible for causing the issue. Official quotes or paid invoices from independent contractors demonstrate the exact cost of repairs, replacements, or cleaning
• Communication records: Keep a log of all emails, letters, and text messages exchanged between the landlord and tenant. This can prove that issues were reported during the tenancy, and discussions had, and show attempts to negotiate a settlement

If you are preparing to submit a claim or a defence, you can read detailed advice by reading our articles on ‘Getting evidence ready for negotiation or resolution‘ and ‘Evidence for deposit disputes: What you need and how to prepare it‘.

How adjudicators make decisions

Adjudicators follow strict principles to make sure every case is handled fairly and consistently. Understanding how they think can help you present your evidence more effectively.

The duty to prove
In any tenancy, the deposit remains the tenant’s property until the landlord can show otherwise. This puts the responsibility on the landlord to prove any right to all, or part, of the deposit, with quality evidence due to the tenant causing deterioration beyond what is reasonable.Without sufficient evidence, the adjudicator will return the deposit to the tenant.

The balance of probabilities
Adjudicators make decisions based on “balance”. This is a civil law standard. It means the adjudicator will look at all the evidence and decide which version of events is more likely to be true.

Fair wear and tear
Adjudicators will always consider fair wear and tear. This includes the tenancy length, the condition at the start compared to the condition at the end, the quality and age of the item in question and its potential lifespan as well as the number and age of the occupants. For example, a carpet will naturally deteriorate over a five year tenancy and a landlord is responsible for this natural ageing process. You can learn more at ‘Fair wear and tear – What is it and how is it applied?‘

Betterment
A landlord should never end up in a better financial or material position than they would have been if the issue had not occurred. For example, if a tenant damages a three year old washing machine, the landlord can only claim towards a like for like replacement, less three years wear and tear and the item’s remaining lifespan. The full replacement cost would amount to betterment, so depending on the landlord’s proposed settlement, the adjudicator may recalculate a proportionate amount.

Common deposit dispute scenarios

Reviewing common scenarios can help you understand how rules are applied in real situations. You can find much more information in our ‘Deposits, resolution and damages guide‘.

Cleaning

A tenant moved into a property that was recorded in the check in report as clean to a professional standard . After a two year tenancy, the tenants cleaned the property themselves before leaving. The check out report noted dust on skirting boards, grease in the oven, and limescale in the bathroom. The landlord proposed a settlement of £150 for a professional cleaning service  and provided an invoice. The adjudicator must consider all the areas that were left clean to the same standard and only award the landlord money towards cleaning the areas that were left cleaner to a poorer standard. Learn more with our ‘Resolution case study – cleaning and landlord costs’.

Unfair wear and tear

The tenant lived in the property for five years and challenged the landlord’s proposed settlement for redecorating the entire property, saying that scuff marks and other general marks in high traffic areas like hallways and around light switches are normal wear and tear, not damage. 

The landlord provided a detailed check in report showing the property was not freshly painted at the start. The check out report showed no clear damage and the general expected lifespan of decoration in a rented property is around five years. For these reasons, the adjudicator made no award as the evidence just showed reasonable wear and tear and it is the landlord’s responsibility to redecorate after more than five years.

Damage

The carpet was brand new at the start of the three year tenancy. The landlord wanted £400 for a completely new carpet due to an iron burn on a bedroom carpet which the tenant accepted. Since the carpet is already three years old, its value has decreased due to use and £400 was considered high for one room as there was no evidence that the replacement cost was like for like. The adjudicator accepted that damage occurred, but for the reasons above only could award a contribution towards the replacement, not the full cost.

Redecoration

The comparison between the check in and check out reports showed that a tenant painted a neutral living room dark blue without permission. Tenancy agreements typically say that  altering the property is prohibited, unless a tenant has asked, and received permission in writing. As the tenant was responsible for returning the property to the same standard and colour as at the start of the tenancy, the landlord required a decorator to apply multiple coats of paint to restore the room to its original colour. Without evidence of permission and an invoice for redecorating the landlord was awarded reasonable costs.

Gardening

The tenancy agreement says the tenant is responsible for looking after the garden and leaving it in the same standard, in line with seasonal growth. At check in, the lawn was mowed and the borders were tidy as shown in the photos. The check out report for the garden said the grass was knee high, there were weeds throughout and it was generally overgrown. The landlord proposed a settlement for a gardener to make good and provided the gardener’s invoice. The adjudicator found this reasonable and the landlord was awarded this amount.

How long does a deposit dispute take?

The timeframe for a formal resolution depends on how quickly both parties respond to requests for evidence. However, there are statutory deadlines to keep the process moving.

The process varies depending on whether your deposit is held in an Insurance or Custodial scheme.

For insurance schemes:

After a tenant raises a dispute and submits their initial evidence, they have up to 10 working days to provide any further evidence. The landlord or agent then has 20 working days to submit their evidence. Within the first 10 of these working days, they must lodge the disputed deposit amount with us and confirm if they will use our Alternative Dispute Resolution (ADR) service or go to court.

For custodial schemes:

The process starts with a 14 calendar day negotiation period, where both parties can respond to each other. If a resolution is initiated by the responding party and the dispute proceeds to adjudication, both parties have a final five working days to submit their last pieces of evidence.

Once all evidence has been received, the case is passed to an independent adjudicator. The adjudicator generally has up to 28 days to review the file and issue their decision.

From the moment a formal resolution is requested to the decision being made typically takes 60 days. You can check expected timelines here: ‘How long does it take to get a tenancy deposit back in the UK?‘

What happens after the decision?

Once the adjudicator has finalised their decision, it is sent to both the landlord and the tenant simultaneously. The report provides a clear breakdown of the money awarded to each party and explains the reasoning behind each issue.

Because ADR is a binding process, neither party can appeal the decision through the deposit scheme simply because they disagree with it. However, if your property is in Scotland, Northern Ireland, or Jersey, you may appeal the decision through a separate process.

Once the decision is published, the scheme will release the disputed funds. For UK based users, payments will be processed instantly. For overseas users, payments can take up to five working days to be processed.

The decision on the landlords proposed settlements could be:

• a partial award, where the adjudicator decides the landlord is entitled to some, but not all, of the money proposed. The remainder is returned to the tenant
• a full award to the tenant if the landlord provided poor or no supporting evidence
• a full award to the landlord if their proposed settlements are entirely justified and proven

When is the small claims court needed?

While the resolution process resolves the majority of disagreements, there are specific situations where a small claims court may be the only option.

While the tenancy deposit schemes resolution service is a free, specialised service, the court becomes the only option if:

• the deposit was never protected in an authorised scheme, meaning the scheme has no jurisdiction to resolve the issues
• the tenant or landlord completely refuses to use the resolution service, which requires both parties consent
• the landlord is claiming more than the value of the deposit 
• the issues involved are complex legal issues, such as counterclaims for housing disrepair or personal injury

Using the small claims court involves paying court fees, attending hearings, and facing longer wait times. It should always be viewed as an absolute last resort. If landlords hold deposits improperly and ignore communication, court action might follow. Read ‘How long can a landlord hold your deposit in the UK?‘ and ‘Tenancy deposit disputes and small claims court: When it applies and what to expect‘ for related information.

Another option before court is mediation, which also aims to avoid the need to use the court process tenancy mediation.

Tips to avoid end of tenancy deposit issues

The best way to handle any issues is to prevent them from escalating in the first place. Both parties can take proactive steps to make sure there is a smooth transition at the end of a tenancy.

• Create detailed inventories: A comprehensive, signed check in report supported by clear photographs is the ultimate protection for both landlords and tenants. It sets a definitive baseline at the start
• Set expectations early: Landlords should remind tenants of their responsibilities a few weeks before the tenancy ends, providing a checklist for cleaning and key returns
• Communicate clearly: Landlords should communicate expectations clearly in the tenancy agreement. Tenants should report maintenance issues, in writing, as soon as they become aware of them. Good communication throughout the tenancy helps maintain relationships and can prevent small issues from escalating
• Conduct regular inspections: Regular property visits allow landlords to spot potential problems early, and allow tenants to ask questions about maintenance
• Negotiate: Try to discuss any issues directly before requesting a formal resolution using evidence to support your position. Use the guidance available in our ‘Guide to negotiation‘ to find a compromise

To achieve the fairest resolution, understanding the rules and preparing strong evidence is vital for any negotiation. If you need to request a formal resolution process or submit evidence, make sure you have reviewed your tenancy agreement and got your evidence together.

As a mydeposits member, you have access to our award winning, free to use dispute resolution service. If you need to raise a dispute, our expert team is ready to guide you through the process. Start your dispute process here: https://www.mydeposits.co.uk/dispute-process/

This is general information, not legal advice.

Protect your deposit with mydeposits

If your tenant’s deposit is currently unprotected, you should act immediately. Late protection does not remove the risk of penalties or court action, and resolution may be unavailable, so using a deposit protection scheme like mydeposits from the start is essential.

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