I have written numerous blogs in the past about the curious case law which has developed in relation to tenancy deposit schemes. However, there are some practical headaches that a landlord case face in recovering the deposit from a scheme operator even where the tenant has vacated and judgment has been obtained for rent arrears or other damages.
You would have thought that a court order giving judgment against a tenant would be sufficient to convince the scheme operator to release the deposit to a landlord, as many landlords are experiencing this is not so.
There are 3 government authorised tenancy deposit scheme providers:
1. The Dispute Service (www.thedisputeservice.co.uk)
2. My Deposits (www.mydeposits.co.uk)
3. The Deposit Protection Service (www.dps.co.uk)
and each of them has their own rules and procedures about the recovery of the deposit at the end of the tenancy.
The particular problem that I have noticed for some landlords concerns the DPS scheme and that having procured their judgment against the tenant they were not aware of the provision in the DPS terms and conditions that requires the court order to provide that the deposit can be used to satisfy the claim and that the scheme operator should be specifically mentioned. This is a requirement of clause 29 (a) of the terms and conditions and failure to procure that statement in the court order will mean that the DPS will retain the deposit.
Clause 29 (b) suggests an alternative course of action for a landlord whose judgment does not contain the magic words, that is to obtain a third party debt order in relation to the deposit. However, that means another court fee of £100 and a wait for the court to process the enforcement documentation.
It seems to me that the DPS in particular has set up its systems to protect the tenants deposit at all costs, when a more common sense approach based upon the evidence would make the system a good deal less bureaucratic.