Using the courts to settle deposit disputes

If there is a dispute regarding the return of the deposit, landlord and tenant must both agree to use the adjudication service provided free by the deposit scheme providers in order to proceed with this process. If either party does not wish to make use of this service, the other party has the option to use the courts to settle the dispute.

If there is a dispute regarding the return of the deposit, landlord and tenant must both agree to use the adjudication service provided free by the deposit scheme providers in order to proceed with this process. If either party does not wish to make use of this service, the other party has the option to use the courts to settle the dispute.

If the deposit is protected using the government custodial scheme, the entire deposit will already be lodged with the scheme. If the deposit is protected using the insurance based scheme MyDeposits, the landlord must return the undisputed amount to the tenant and lodge the disputed amount with the scheme whether or not he chooses to use the free adjudication service or the courts to settle the dispute.

The small claims procedure in the County Court can be used for claims up to £10,000. Information regarding court forms and fees (on a sliding scale based on the amount claimed) can be accessed via the court website or by telephoning the court local to the rental property. If the website is used, members should download and complete the N1 form (use the left hand menu on the courts service home page to click on the ‘forms’ button then type N1 in the relevant box). The form should then be sent, together with copies of supporting evidence – for example, before and after check-in and check-out reports, signed inventory, photographs, tenancy agreement, witness affidavits etc. – to the court that has jurisdiction over the rental property.

This claim can also be filed online by clicking ‘money claim online’ in the bottom right hand box on the court service website home page. This procedure will attract a discounted fee and it is possible to track the claim. However, claimants will still have to forward copies of the evidence to the court, and for this service, to all the defendant(s).

For more information on using the Small Claims procedure click on the ‘Small Claims’ heading that can be found towards the bottom of the courts service home page.

If the claim is defended, the court will schedule a date to hear the case. If the court finds in favour of the claimant, the documentation provided by the court should be given to the deposit scheme provider to authorize them to release the disputed amount. Each party is responsible for paying their own court costs regardless of who wins the case.

If the disputed amount is over £10,000, the case is no longer considered a ‘small claim’ by the courts, but the procedure is exactly the same as detailed above. The main difference is that the person who loses the case is liable for their own and the winner’s fees, which could be considerable if solicitors are also involved.