No sooner do I create a comparison document showing the different fee structures of the three tenancy deposit schemes (which you can download from here) than we learn that the tenancy deposit scheme run by the Dispute Service (TDS) is to increase its fees!

The reason, according to the press release from the Dispute Service is the massive increase in arbitrations, which is putting a severe strain on their system.  This, if you remember, was mentioned in their annual report, which I reported on here.

As a result of this, the TDS  board have agreed a change to the method of charging subscriptions which, the press release warns, is likely to lead to ’significant increases’.  However agents (TDS is used mostly by letting agents) should still be able to pass the cost on to their landlords, so it seems it will be landlords who will largely lose out as a result of this increase.

TDS point out that part of the problem is that many agents are not trying to resolve disputes themselves, but are simply referring them to TDS arbitration, even (it appears) for such as small sum of £4.20!

Said Chief Executive Lawrence Greenberg, “The £4.20 dispute is the lowest so far but we have had many for not much more. This kind of misuse of the adjudication process is the overwhelming reason why the cost of dispute resolution has increased by nearly 100%. This, more than any other cost increase we have experienced, accounts for the level of subscriptions we will have to consider for next year.”

However, Lawrence Greenberg pointed out that given the divergence in the way disputes are put forward by different firms, “It is likely that the new rates will be much fairer as they will be set at different levels based on the past history of a firm’s demands on Alternative Dispute Resolution.”

So when choosing an agent, a landlord should also now take into account the agents record with dealing with tenancy deposit disputes sensibly, as if a firm has a history of referring inappropriate disputes, this may impact on the firms subscription fees which will be passed on to landlords.

Although it should perhaps also be mentioned that sometimes agents may have no alternative to referring a case to arbitration if landlords refuse to authorise sensible settlements.

My Deposits, the other insurance based scheme, has responded with a press release confirming that their fees will remain the same, suggesting that they may now be more attractive to agents.  They also question TDS policy of keeping arbitration’s in house, suggesting that this may affect impartiality.

What is your experience?  Do you think that inappropriate referrals to arbitration are largely the fault of the agent or the landlord?  Do you think that internal arbitrators affect impartiality?  And if you are an agent, is this fee increase likely to make you move to My Deposits?

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Related posts:

1. Tenancy Deposit Scheme charges – an update
2. TDS increases prices for agents using arbitration scheme
3. Tenancy Deposit Scheme to be set up in Scotland
4. The Dispute Service Annual Report
5. Case throws up injustices in the tenancy deposit scheme legislation

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