Tenancy Deposit Dispute Process Explained for Landlords

How can a landlord withhold all or part of the tenancy deposit if the tenant disagrees with the deduction? Fortunately, there’s a system in place.

All tenancy deposits have to be protected at the start of the tenancy. If the deposit is not protected, you’re in breach of tenancy deposit protection law and may be liable to pay compensation. But it’s not just another hoop to jump through.

Your tenancy deposit scheme (TDP) also offers access to free dispute resolution – often avoiding a costly, and time-consuming, court process. Across 2022-2023, the three government-approved tenancy deposit schemes issued over 36,000 adjudications on contested deposits across England and Wales, according to the Tenancy Deposit Scheme.

If you’re based around Gants Hill and Manor Park, Croydon or Lewisham, then read on to find out how the tenancy deposit scheme dispute process works.

Want to know more? Explore how to handle a breach of tenancy agreement by a tenant and find out whether buy-to-let is still worth it in East London in 2026.

What are the reasons for a tenancy deposit dispute?

Deposit disputes are caused when a landlord believes they should retain part of the tenancy deposit, but the tenant disagrees. Common reasons include:

• Rent arrears
• Property damage
• Theft
• Breakages

What’s the process of disputing a tenancy deposit?

If your tenant paid a deposit at the start of an assured shorthold tenancy starting after 6 April 2007, you should have protected it in an approved tenancy deposit protection scheme (TDP) and given them the prescribed information in line with tenancy deposit protection law. As such, you can use the scheme’s alternative dispute resolution service (ADR) for independent adjudication instead of going to court.

This is the process you need to follow:

1. Landlord proposes deposit deductions

The landlord contacts the tenant to propose deductions from the tenancy deposit. They should be realistic and fair, reflecting actual costs – not betterment.

2. Attempt to settle amicably

If there’s evidence, your tenants resign themselves to the deductions or both parties may reach a compromise.

3. Contact the dispute resolution service

If you can’t agree, approach your deposit protection scheme’s free alternative dispute resolution service.

4. Transfer insured deposits to the scheme

The landlord transfers the disputed deposit amount to the service if it’s held under an insurance scheme.

5. Landlord provides evidence

The landlord must provide evidence to justify deductions. Time limits vary, but as a guide, MyDeposits allow the landlord 20 working days to submit evidence.

6. Adjudication

The independent adjudicator makes their decision in 28 days under MyDeposits, or around 15 days under the Tenancy Deposit Scheme (TDS) or Deposit Protection Service.

7. Go to court

If the tenancy deposit dispute cannot be settled by the dispute resolution service, you can go to court. Tenants can take their deposit protection claims to court if the landlord or agent fails to return their deposit, or protect it.

If the deposit was not protected within 30 days, the court can order you to repay the deposit, plus a penalty up to 3 times its value, under the Housing Act 2004. With the ONS estimating the average monthly rent in Camden at £2,796 as at September 2025, and deposits potentially 5 times that, compensation could reach as high as £40,000.

Want to find out more? Read about how to check a tenant’s right to rent and learn what a periodic tenancy means for landlords under the upcoming rental reforms.

What outcomes may a tenancy deposit dispute have?

The adjudicator may award landlords’ deposit claims in full, or adjust the deduction amount or deny it. This can happen if they’re claiming for betterment or wear and tear, for example.

Can landlords challenge the deposit scheme’s decision?

The scheme’s adjudication is binding, however, landlords have 28 days to request a review. They may consider your request if you think they’ve made a legal error or misunderstood the facts.

What evidence do you need for a tenancy deposit dispute?

The evidence to back up your proposed deposit deduction may include these documents, depending on the reasons for withholding the deposit.

• Tenancy agreement rules
• Rent payment records
• Written correspondence between the landlord and tenant
• Check-in inventory
• Check-out inspection records
• Photos of damage
• Receipts for broken furniture or appliances
• Quotes for repairs
• Cleaners’ quotes

Does the dispute process vary between deposit schemes?

While the cost of the three deposit schemes varies, their dispute processes are all free of charge. All three approved schemes’ dispute processes operate similarly, but there are differences in the exact process and timelines. Under insurance schemes, the landlord must transfer the disputed amount to the scheme during adjudication.

How long do you have to raise a tenancy deposit dispute?

You have 90 days from the end of the tenancy to raise your tenancy deposit dispute claim. The tenant then has 14 days to respond with evidence.

If you need help navigating tenancy deposit protection regulations, or any other aspect of renting out your property in Dagenham, Newham or Camden, contact us. Find out what Lint Group can do for you today.

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