Poor communication the biggest cause of deposit disputes

by Property 118

11:57 AM, 9th January 2020
About 9 months ago

Poor communication the biggest cause of deposit disputes

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Poor communication the biggest cause of deposit disputes

The latest research from Hamilton Fraser’s deposit alternative scheme Ome, shows that 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. Check out the full blog here.

The research from 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.

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% 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.”

Tables for press release purposes only

 

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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Comments

Paul Essex

19:44 PM, 10th January 2020
About 9 months ago

Do you have the figure for what percentage of deposits have some deductions (disputed or not)? I am intrigued as to how many 100% deposit returns will be available for the next property.


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