Defend A Deposit Claim
Landlords must protect any deposit received from tenants in a Government-approved deposit protection scheme within 30 days of receiving it. Landlords must also keep evidence of providing the deposit certificate and prescribed information to tenants if they collect a deposit.
There are legal consequences if you fail to protect a tenant’s deposit, the first being that you won’t be able to serve a section 21 notice. The second is that the tenant may claim compensation at 1-3 times the value of the tenancy deposit.
If you are a landlord looking to defend a tenancy deposit claim, our network of specialist landlord lawyers is on hand to provide guidance and representation should you need it. Contact our legal assessment team for a free case assessment and to get a fixed-fee quote for your needs.
How to defend a deposit claim
If you’ve received a letter of claim from a tenant regarding an unprotected deposit, you should seek legal advice from a specialist landlord and tenant lawyer. They will
Review the letter of claim
Determine whether the tenant’s claim is valid.
If the claim is invalid, your solicitor can draft a letter of response outlining why. If the tenant’s claim holds some weight, your solicitor can support you in negotiating a settlement, like refunding the deposit, making a counterclaim, or taking further action to address the issue.
What are the potential outcomes of a tenant deposit claim?
Under Section 214(4) of the Housing Act 2004, the court can order a landlord to pay a tenant a sum equal to or up to three times the deposit.
Alternatively, landlords and tenants can also opt to try and resolve disputes outside of court through alternative dispute resolution (ADR), the most popular method being through the Tenancy Deposit Scheme (TDS).
ADR is often favoured over going to court because it tends to be more cost-effective and can lead to quicker resolutions. The TDS, in particular, is an independent scheme, and its decisions hold weight. However, it's important to note that TDS is typically only suitable for resolving disputes when a tenancy ends.