Deposit Alternative Scheme Central Housing Group

Deposit Alternative Scheme Disputes

A new report from Hamilton Fraser’s deposit alternative scheme Ome, has revealed that there has been a marked increase in the number of deposit disputes over the last three years.

According to the data, shows poor or no communication when withholding a deposit is still the most common cause for deposit disputes between landlords and tenants, ahead of the cleanliness of the property and damage sustained during a tenancy.

The research from deposit alternative scheme Ome also shows that the total number of disputes being submitted by tenants to Hamilton Fraser’s deposit protection scheme, mydeposits, has increased over the last three years, however, the number of escalated disputes reaching the adjudication stage as a percentage of total disputes has fallen steadily year on year – down -2.6% in 2019 alone.

Last year, there were 9,323 disputes raised with mydeposits, however, just 5,792 (62.1%) progressed as far as the adjudication stage, down from 64.7% the previous year and 66.4% the year prior to that. The decline in the percentage of disputes reaching adjudication is likely as a result of the drive towards early resolution and negotiation, showing that when landlords and tenants do communicate issues can be resolved amicably.

What causes the most disputes?

When digging into the causes for these disputes, 30% were as a direct result of tenants not receiving any communication or explanation as to why they were not getting their deposit money back.

Disagreements over the perceived cleanliness of the property upon check out was the second most common cause for a dispute in 23% of cases, while damage to the property ranked third with 18%. Other reasons for disputes included general redecoration, missing or replaced items and outstanding rent arrears or bills.

Matthew Hooker, Co-founder of Ome, commented: “The return of a deposit can often be a cause for an otherwise fantastic tenant-landlord relationship to sour and the stats show that the leading reason for this is poor or lack of communication.

The sector is starting to provide solutions to these friction points and technology is helping to create a more transparent end of tenancy process. Ome, for example, will naturally see 30% of these disputes caused by landlords withholding cash without an explanation eradicated by providing a cashless deposit experience. We’ll also be pushing improved transparency and communication by pioneering the mandatory check in/check out reports.

Through our research I’m confident that the industry is on the right path and choice, competition and improving technology is helping to raise standards and protect the interests of both tenant and landlord alike.”

Blog Post from Property Reporter

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