The Deposit Protection Service (DPS) Single Claim Procedure Explained

Introduction

Where a deposit is received in connection with an assured shorthold tenancy (England) or occupation contract (Wales), the deposit must be protected in a government-approved scheme within 30 days. 

Tenancy deposit schemes come in two flavours, insurance based or custodial. 

The Deposit Protection Service runs a government-approved custodial deposit scheme free of charge for landlords.

The significant difference between custodial and insurance based is that the custodial scheme holds the deposit money during the tenancy, and insurance-based is held by the landlord unless there becomes a dispute, in which case, like the custodial, the insurance-based will have the disputed amount of deposit. 

This article looks at the position where a tenant has abandoned property or is being uncooperative regarding the return of the deposit and primarily focuses on the single claim procedure that the custodial scheme must follow. This procedure allows one party (landlord or tenant) to apply for the deposit to be repaid to them (or part of the deposit) without the other party's consent.

Summary

For the Deposit Protection Service (DPS), the following, in summary, will occur when a deposit is to be repaid.

• If the landlord agrees all deposit is to be returned to the tenant, the landlord authorises full payment back to the tenant.
• If the landlord wishes for some or all of the deposit, repayment is requested.
• DPS will notify the tenant of the request
• If there is no response, the landlord will serve notice on the tenant giving 14 days.
• If there is still no response, a single claim commences.
• If DPS is satisfied with a single claim, payment is made to the landlord within ten days.

Request repayment

After logging in to your DPS account and requesting repayment in the usual way, the DPS will notify the tenant (or now ex-tenant) that you have requested to be paid the deposit. You can see which payments are awaiting a response from a tenant from the repayment in progress screen on the DPS website.

Wait for a response.

If the tenant fails to respond within 14 days), they will become absent or un-cooperative.

Absent or un-cooperative tenant

If the tenant is uncooperative and fails to respond, then the procedures as laid out in Schedule 10, Housing Act 2004, take effect, which allows for a single claim to be made.

When can a single claim be made?

You may make a single claim process if:

• at least 14 days have elapsed since the day on which the tenancy ended;
• the landlord and tenant have not reached an agreement concerning the amount of deposit claimed; and
• the landlord believes that they are entitled to be paid the amount claimed and that the amount claimed is one of the following:
  • unpaid rent or any other sum due under the terms of the tenancy; or
  • damage to the premises subject to the tenancy, or
  • loss of or damage to property on those premises, and none of the above may include damage caused by fair wear and tear.

The landlord has an address for the tenant.

Contained in the prescribed information that was given to the tenant by the landlord was the following:

"such details that the landlord or scheme administrator should use to contact the tenant at the end of the tenancy."

So, the landlord should have a post-tenancy address for the tenant contained within the prescribed information. Where the landlord has an address, before the single claim procedure is started, the tenant must have received a written notice asking whether the tenant accepts that the landlord should be paid the whole or a specified part of the deposit.

A suitable notice is available for free on our website here.

You may serve the notice anytime after the tenancy has ended. Before sending this notice, there is no need to wait for any specific period. The tenant must receive this notice, so you must send it special delivery, and it should be marked on the envelope "to be signed by addressee only". If it is not received, it will be regarded that the landlord has no address for the tenant (see below). You should find that if you use special delivery marked "to be signed by addressee only", you will get the document back reasonably quickly if the address is no longer valid so that you can proceed under the "has no address" section below. (We have tested this, and a document sent on a Friday marked "to be signed by addressee only" was returned by the following Tuesday, so we could commence the single claim without waiting 14 days.)

The tenant has 14 days from the day the tenant receives the notice. The landlord may start a single claim if the tenant has not responded. Once this notice has been received, any single claim subsequently made must not exceed the amount that you specified in the notice.

The landlord has no address for the tenant.

Where the landlord has no address for the tenant, "or other means of contacting the tenant," you may start the single claim process. Still, when it comes to the statutory declaration (see later), the form must give particulars of any address (other than the tenancy address) and other contact details (including telephone numbers or e-mail addresses) that the landlord has had for the tenant.

Single claim application

Once the 14 days for the notice has elapsed (where an address is known), you may make an application for a single claim. 

The first thing to do is click on the appropriate link on the DPS website. Once you have started the single claim process, a statutory declaration partially completed will be sent to you for completion.

Statutory declaration

The application must be accompanied by a statutory declaration made by the landlord stating—

• the date on which the tenancy ended;
• that the landlord and the tenant have not reached any agreement for the amount claimed, with details of any communications between them since that date (whether relating to the relevant amount or otherwise);
• the basis on which the amount claimed is calculated, with particulars of any facts relied on to justify claiming that amount;
• if the landlord has no current address for, or other means of contacting, the tenant, giving particulars of any address (other than the premises subject to the tenancy) and other contact details (including telephone numbers or e-mail addresses) that the landlord has had for the tenant;
• if the landlord has an address for the tenant, that the notice was received, with particulars of the facts relied on to demonstrate that it was received by the tenant and attaching a copy of the notice given to the tenant;
• any information he has as to the whereabouts of the tenant;
• that the landlord gives consent, in the event of the tenant disputing that the landlord should be paid the amount claimed, for the dispute to be resolved through the use of the dispute resolution service;
• that they consider that is entitled to be paid the amount claimed; and
• that they make the statutory declaration knowing that if he knowingly and wilfully makes a false declaration, he may be liable to prosecution under the Perjury Act 1911.

Evidence

All the particulars of any facts relied on to justify claiming the amount must be enclosed with the form. The whole point of the single claim is that all the evidence is presented in advance, and there is no ability to provide further proof later. 

Administering the declaration

A commissioner of the oath must administer the statutory declaration. A solicitor can act in this capacity and usually (at the time of writing) only charge £5.00. Solicitors tend to be the best option because Magistrates, amongst other possibilities, tend to be challenging to get appointments for and also, the last time I checked, charged around £25.00. For all persons who can administer a statutory declaration, see section 2, Statutory Declarations Act 1835.

Send the application to the DPS.

You must then send the DPS the single claim application, statutory declaration and all accompanying evidence as required above.

What happens when DPS receives the application

Upon receipt, the DPS must immediately give the tenant a copy of the application and accompanying statutory declaration and notice, which asks the tenant the following:

• Whether they accept that the landlord should be paid the whole or part of the amount claimed;
• If they accept that part of the amount claimed should be paid, the amount they should be paid; and
• If they do not accept that the landlord should be paid the whole amount claimed, whether he consents to the dispute being resolved through the use of the dispute resolution service.

The notice must also warn the tenant that—

• The amount claimed will be paid to the landlord unless, within 14 days, the tenant informs the scheme administrator that he does not accept that the whole of the amount claimed should be paid to the landlord; and
• Suppose the tenant fails to answer the question (within 14 days) of whether they consent to the use of dispute resolution or not. In that case, they will be treated as having given their consent for the dispute to be resolved through the use of the dispute resolution service.

Responses from tenant

The tenant agrees with the amount claimed.

If the tenant responds and agrees that the amount claimed may be paid to the landlord, the application must be granted and payment made within ten days.

The tenant disagrees with "all" of the amount claimed.

If the tenant responds and does not agree with any of the amount claimed by the landlord, the application must be refused, the amount must not be paid at that time (see below), and the scheme must inform the landlord of the tenant's response. The DPS scheme rules allow an additional seven days after issuing the tenant's answer for the landlord to respond further. This will be the final response allowed for adjudication purposes.

The tenant agrees with "part" of the amount claimed.

Where the tenant agrees with part of the amount claimed by the landlord, the agreed amount must be paid to the landlord within ten days. The remainder must continue to be held by the scheme, and the deposit protection scheme must inform the landlord of the responses made by the tenant. (See below for payment of the remainder). The DPS scheme rules allow the landlord to respond seven days after the tenant's response, and this will be the final response allowed for adjudication purposes.

No response from the tenant within 14 days

Where the tenant fails to respond within 14 days, the scheme administrator must arrange for the amount claimed to be paid to the landlord within ten days.

Payment where part or all of the amount is in dispute

Where the tenant responds and either disagrees with the whole amount or part of the amount being claimed, returning the deposit will depend on whether or not the dispute resolution service may be used.

Tenant consent to the dispute resolution

You will recall from the notice that must be served on the tenant by the scheme after an application that the tenant is asked whether they consented to use the dispute resolution.

The tenant agrees to use dispute resolution.

Where the tenant agrees to use the dispute resolution, any amount that remains in dispute will go through the dispute resolution process, and payment will be made according to the outcome of that procedure. The DPS must pay within ten days of the result being known.

The tenant fails to answer the question as to agreeing or not.

Suppose the tenant responds to the single claim application but, in that response, fails to agree or disagree with the dispute resolution within 14 days. In that case, they will be taken to have consented, so the amount claimed in the dispute will go through the dispute resolution procedure as detailed in the paragraph above.

The tenant refuses the dispute resolution service.

When the tenant responds and refuses to agree to use the dispute resolution procedure, then things get interesting. In this case, the DPS may only pay the deposit to the landlord or tenant upon either agreement by the parties or an order from the court. Therefore, the landlord or the tenant may commence small claims proceedings for the amount being claimed (in such a case, the landlord or tenant may claim for more than the deposit amount if they wish). If the landlord or tenant does nothing, the deposit will remain with the DPS until a court order is obtained or the amount is agreed upon. During this suspension period, the tenant can change their mind and agree to the dispute resolution. And, of course, an agreement can be made between the parties.

Court orders

IMPORTANT - If a landlord (or tenant) commences proceedings in this manner to determine which party the deposit amount is to be paid to, the court order "MUST" specify the fact that the deposit amount is to be paid to whichever party has been decided and reference must be made to the Deposit Protection Service. This is because Paragraph 4(5) of Schedule 10 requires the scheme not only to be satisfied that the landlord is entitled to the amount in question but also that "a court has decided that the relevant amount is payable either wholly to one of them or partly to the one and partly to the other, and that decision has become final. The DPS may sometimes require "all" court orders in "all" situations require this information which it is submitted is not necessarily correct as it depends on the circumstances.

Dispute Resolution

Every custodial scheme (or insurance scheme) must provide facilities to resolve disputes relating to tenancy deposits without recourse to litigation. Suppose the application goes to dispute resolution after both landlord and tenant have consented (or been forced to consent). In that case, the adjudicator will decide the distribution of the deposit amount to the parties based on the evidence supplied with the application.

Un-cooperative landlords

The same procedure as described above is also available for tenants in reverse. So, suppose a landlord becomes uncooperative or absent. In that case, a tenant can apply for a single claim, agree to use the dispute resolution, and produce the statutory declaration and evidence. Everything described above can be reversed for a tenant precisely as it was for a landlord.