The Tenancy Deposit Scheme (TDS) is a government approved tenancy deposit protection scheme in England and Wales operated by The Dispute Service Ltd. It was established in 2003 to provide tenants with a way of resolving deposit related disputes with landlords in a swifter, cheaper and therefore potentially less stressful manner than going to court.
Like the courts, TDS is independent and authoritative, however TDS can only resolve a dispute if the tenancy has ended, the deposit is registered with them, and the dispute is about the deposit. Both landlord and tenant must agree to alternative dispute resolution (ADR).
Reported here, Sandy Bastin, Head of Dispute Resolution at the TDS says, “The Housing Act 2004 requires landlords and letting agents to protect deposits on assured shorthold tenancies in a scheme such as ours. We provide both insurance-backed and custodial tenancy deposit protection with free, impartial dispute resolution for when disagreements arise over how the money is divided.”
Either the landlord or the tenant can decide to take their deposit dispute to court if they prefer this form of dispute resolution. This is because there may be other areas in dispute that do not relate to the deposit or the tenancy, for example, counterclaims by a tenant, complaints by a landlord against an agent or contractor due to their conduct, or disputes between landlords/tenants themselves. TDS is unable to consider these wider issues and therefore the dispute may be better taken to appropriate redress schemes or court, where all issues can be dealt with together.
If using their TDS Insured scheme, which is where the agent or landlord holds the deposit, at the end of the tenancy and prior to raising a dispute with TDS you obtain a Court Order, you will need to act upon the directions set out in the Court Order, without referral to TDS. Once the issue has been resolved by the Court it is important for the agent or landlord to then end the protection in their TDS Insured account.
If a party issues court proceedings, unless the court refers the matter back to the TDS, the TDS will not be able to have jurisdiction to resolve the dispute. The deposit, assuming it has not been returned, will be retained by the TDS until the Court makes a determination.
The above is accurate as at 16 December 2021. The information above may be subject to change during these ever-changing times.
The content of this note should not be considered legal advice and each matter should be considered on a case by case basis.