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Poor communication is the biggest cause of deposit disputes

A lack of communication when withholding a deposit is the most common cause for deposit disputes between landlords and tenants, according to new research.

The study by Hamilton Fraser’s deposit alternative scheme Ome found that 30% of disputes are due to a direct result of tenants not receiving any communication or explanation as to why they were not getting their deposit money back.  

Cleaning has been identified as the second most common cause of a tenancy deposit dispute in the private rented property sector, with 23% of disagreements over the perceived cleanliness of the property upon check out, 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.

The research also reveals 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. But 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, or 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 drop 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.

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.”

 

Year

Dispute Notification

Adjudication made

Dispute notification to adjudication

Change

2016/2017

8702

5774

66.4%

N/A

2017/2018

8824

5709

64.7%

-1.7%

2018/2019

9323

5792

62.1%

-2.6%

 

Dispute cause

Percentage of disputes

Deposit not returned - no reason given

30%

Cleaning

23%

Damage to property

18%

General redecoration

13%

Other deductions - reason unknown

9%

Missing / replacement items

4%

Rent arrears / outstanding bills

3%

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