Our latest traditional deposit research focuses on what happens when a landlord and tenant cannot agree at the end of a tenancy. Considering many tenants may have paid a premium to borrow a deposit, the statistics show that poor or no communication by a landlord when withholding a deposit is still the most common cause for an end of tenancy dispute, accounting for 30 per cent of all disputes – even ahead of disputes over the cleanliness of the property or any damage sustained during the tenancy. Interestingly, our Deposit Replacement Membership could reduce the number of disputes by up to 30 per cent as it is cashless.
We looked into data from our sister company, mydeposits, and also found that the number of disputes has increased slightly over the last three years. However, the number of escalated disputes reaching the adjudication stage as a percentage of the total disputes has fallen year on year – down 2.6 per cent in 2019 alone.
Last year, there were 9,323 disputes raised with mydeposits, however, just 5,792 (62.1 per cent) progressed as far as the adjudication stage, down from 64.7 per cent the previous year and 66.4 per cent 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 per cent 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 per cent of cases, while damage to the property ranked third with 18 per cent.
Other reasons for disputes included general redecoration, missing or replaced items and outstanding rent arrears or bills.
Co-founder of Ome, Matthew Hooker, 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 per cent 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.”