Use the Tenancy Deposit Scheme and say goodbye to expensive court cases
What would you think about a housing organisation that has had to deal with more than 42,000 tenancy disputes in the past four years? Well, that’s exactly what the Tenancy Deposit Scheme has done, adjudicating on disputes between tenants and landlords in the private sector about the return of rent deposits at the end of the tenancy.
The disputes range from damage to decoration, cleaning problems and garden conditions, as well as outstanding claims for rent arrears. The TDS’s adjudicators deal with these disputes using a simple paper-based process. Each side supplies its evidence (photographs, inventories, condition reports, rent statements and so on) and these are then reviewed impartially by the adjudicators who decide how the disputed deposit is to be allocated. It’s a binding decision and one that is quick and free to use, as the TDS covers its costs by charging fees to landlords to insure the deposits.
Everyone knows that going to court is time-consuming and expensive and it is easy for the costs involved to far outweigh the value of the sums of money in dispute. For years, politicians, policy makers and leading judges, have been concerned about the problem. With more social landlords entering the private rented sector, it is an issue that will increasingly concern them too.
The TDS offers a model for ‘proportionate justice’. Of course, the scheme does not pretend to work in the same way as a court. There are no opportunities for oral hearings before a judge, for example. But the process of holding hearings is what racks up the cost of litigation in court. In the case of the typical tenancy deposit dispute - where the average sum under discussion is normally less than £500 - these costs would usually result in disproportionate justice.
Because the process is paper-based and reliant on evidence submitted to the TDS, we also deliver outcomes much more quickly than the courts. At present, the TDS resolves more than 98 per cent of disputes in less than 28 days, from receiving the parties’ consent to adjudication. Compare this with the average wait of six months for small claims cases to be heard in the county court.
The Ministry of Justice is proposing to divert 80,000 cases a year to a simple small claims mediation service. We think it could go further still and apply the TDS model across other areas such as housing disrepair cases, rent arrears disputes where there is no judicial discretion involved and section 21 notices. It would save money, avoid the use of expensive lawyers and judges, be less intimidating for the parties and be quicker.
Is anyone up for that?
Steve Harriott is chief executive of the Dispute Service, which operates the Tenancy Deposit Scheme