Tenancy Deposit Scheme and Bond Dispute Advice: How you can avoid them, and why finding the right tenant is important.

15th Jun 2023

Disputes with tenants over tenancy deposits and bonds can cause stress and financial strain for both parties involved. Here we can explain the tenancy deposit scheme, provide valuable advice on resolving bond disputes, and highlight the importance of finding the right tenant to avoid such issues altogether. 


Understanding the UK Tenancy Deposit Scheme 

In the UK, landlords are legally required to protect their tenants' deposits using a government-approved tenancy deposit scheme. These schemes provide an independent dispute resolution service and ensure that the deposit is returned fairly at the end of the tenancy. There are three government-approved schemes in the UK: Deposit Protection Service (DPS), MyDeposits, and the Tenancy Deposit Scheme (TDS). Landlords must choose one of these schemes within 30 days of receiving the deposit. 

In addition to protecting the deposit, Landlords also have another option - The No Deposit Scheme. This is an alternative to a traditional deposit. It is only available to landlords using the John Shepherd Fully Managed Service and it is offered at our discretion.  

Benefits of the scheme include; 

• Attracts more tenants 

• Quicker move ins 

• 8 weeks protection versus 5 weeks with traditional deposit 

• Faster payment, no need to wait until the end of adjudication, we will pay within 10 days of claim being internally approved 

To learn more about the No Deposit Scheme, please reach out to your local branch. Click here to find your local branch. 

Resolving Bond Disputes 

Despite the existence of tenancy deposit schemes, disagreements can still occur between landlords and tenants regarding the return of the deposit. Here are some key steps and advice to navigate bond disputes effectively: 

  • Accurate Check-In and Check-Out Reports: Maintaining comprehensive check-in and check-out reports that detail the condition of the property is essential. This documentation acts as evidence in the event of a dispute and helps determine responsibility for any damages. 

  • Effective Communication: Clear and timely communication between landlords and tenants is crucial. It's recommended to address any concerns or issues promptly to avoid them escalating into disputes. Maintaining a paper trail of all correspondence can also be beneficial. 

  • Mediation and Alternative Dispute Resolution (ADR): If a dispute arises, both parties should consider mediation or ADR services provided by the tenancy deposit schemes. Mediation involves an impartial third-party facilitating communication between the landlord and tenant, helping them reach a mutually agreeable solution. ADR is a formal process where an independent adjudicator reviews the evidence and makes a binding decision on the deposit's distribution. 

  • Keeping Evidence: To strengthen your case during a bond dispute, gather and retain evidence such as photographs, invoices for repairs, and relevant communication records. This evidence will support your claims and help you protect your rights as a landlord. 


To illustrate the challenges and solutions related to tenancy deposit disputes, let's consider two hypothetical case studies: 


  1. Unreported Damages 

Tenant A rented a property for six months and failed to report some damages caused during their tenancy. When the tenancy ended, the landlord discovered these damages and withheld a portion of the deposit to cover the repair costs. The tenant claimed they were not responsible for the damages, resulting in a dispute. Through mediation facilitated by the tenancy deposit scheme, both parties agreed to a fair deduction, avoiding a lengthy legal process. 


  1. Insufficient Documentation 

Tenant B moved out of their rented property, leaving it in good condition. However, the check-in and check-out reports were incomplete and did not provide sufficient evidence of the property's condition at the start and end of the tenancy. This lack of documentation complicated the resolution process, leading to delays in the deposit return. In this case, both the landlord and tenant learned the importance of thorough documentation for future reference. 


Avoiding Bond Disputes by Finding the Right Tenant 

Preventing bond disputes starts with finding the right tenant for your property. John Shepherd implements a comprehensive tenant screening process that includes background checks, employment verification, and previous landlord references. This helps assess a potential tenant's reliability and ability to meet their obligations.