Deposit disputes at the end of a tenancy — How to handle them

When a tenant disputes proposed deposit deductions at the end of a tenancy, England’s tenancy deposit protection schemes offer free alternative dispute resolution. The adjudicator reviews evidence submitted by both parties and makes a binding decision. Understanding this process helps landlords present their case effectively. Reviewed March 2026.

What the rule is

The Housing Act 2004 requires deposits to be protected in an approved scheme (DPS, MyDeposits, or TDS). Each scheme operates a free alternative dispute resolution (ADR) service that landlords and tenants can use instead of going to court when they cannot agree on deductions. ADR decisions are binding on both parties.

When it applies

• When a landlord proposes deductions that the tenant disputes
• When no agreement on the deposit return has been reached
• Both parties must agree to use ADR — either party can also go to court instead
• The deposit must be in a protected scheme for ADR to be available

What landlords must do

• Inform the tenant of proposed deductions in writing with a full breakdown and supporting evidence
• Give the tenant a reasonable time to respond (typically 10–14 days)
• If agreement cannot be reached, raise a dispute with the deposit scheme’s ADR service
• Return the undisputed portion of the deposit within 10 days of agreeing that amount — do not hold the whole deposit while disputing part of it
• Submit all evidence to the ADR service by the specified deadline
• Accept and implement the adjudicator’s decision

What evidence adjudicators require

• Check-in inventory — signed by the tenant, dated, room-by-room condition
• Check-out report — mirroring the check-in inventory, with comparison
• Dated photographs — from check-in and check-out, organised by room
• Invoices or quotes — for any cleaning, repair, or replacement claimed; itemised
• Tenancy agreement — to confirm any relevant terms
• Rent arrears schedule — if claiming for unpaid rent
• Evidence of tenant liability — correspondence, maintenance reports if applicable

How adjudicators decide

Adjudicators apply a standard of reasonableness. They will:

• Compare the property’s condition at the start and end of the tenancy
• Allow for fair wear and tear appropriate to the length and nature of the tenancy
• Require landlords to prove that deductions are for damage beyond fair wear and tear
• Reduce claims where the evidence is incomplete or the costs are disproportionate
• Consider whether costs reflect like-for-like replacement (accounting for age and condition)

What evidence to keep

• All documentation listed above, stored in TenancyVault so it can be submitted promptly
• A clear timeline of events from tenancy end to dispute submission
• Screenshots of any communication with the tenant about the deposit

Common mistakes

• Submitting incomplete evidence — adjudicators cannot award what is not supported by evidence; submit everything
• Withholding the entire deposit — return the undisputed portion promptly; this demonstrates good faith and is a legal obligation
• Inflated or undocumented costs — a quote for £500 without an invoice, or without evidence of the damage claimed, will be reduced or rejected
• Not accounting for wear and tear — deducting for normal deterioration is the most common reason landlords lose disputes
• Missing the ADR submission deadline — schemes have strict deadlines; submit early

FAQ

Can I go to court instead of using ADR? Yes — either party can go to the county court instead of or after ADR. Court is usually slower and more expensive but may be appropriate for large claims or complex disputes.

What if the tenant doesn’t respond to my deduction proposals? After a reasonable time (typically 14 days), you can raise a dispute with the scheme, which will notify the tenant and invite their response.

Can the adjudicator award more than the deposit amount? No — ADR is limited to the deposit amount. If the damage or arrears exceed the deposit, you must pursue the balance through the county court.

How long does ADR take? Typically 4–8 weeks from the date all evidence is submitted, depending on the scheme and case complexity.