Some letting agents and landlords are reluctant to use deposit replacement schemes because they are unsure how the dispute process works. The truth is that it is very similar to traditional cash deposits, especially since the process is handled by the same award-winning resolution team as our partner, mydeposits.
In fact, as the only deposit replacement product that is run by experienced deposit experts, we like to think we’ve made it even easier. Once you know how it works, we’re certain you’ll be ready to take advantage of the many benefits deposit replacement has to offer.
It is important to note that, as with traditional cash deposit schemes, the percentage of disputes is very low. While some people feel that there is less burden of responsibility for tenants with deposit replacement schemes, this isn’t the case and doesn’t result in more disputes. Only a small percentage of tenancies end in dispute with Ome’s Deposit Replacement Membership.
Each deposit replacement scheme will handle the dispute process differently, but ours can be broken down into four easy steps.
The first step is no different to the first step in the traditional cash deposit dispute process; the landlord and tenant, with help from their agent if needed, should try to agree a settlement for any damage, cleaning or rent arrears.
The tenancy agreement, check-in and check-out reports and mid-term inspection reports should help tenants and landlords negotiate a fair settlement figure.
Once a figure is agreed, the tenant just needs to pay the landlord and both parties can move on. Unlike with traditional cash deposit schemes there is no waiting around for the deposit to be released, making it much quicker for all parties.
Of course, sometimes the landlord and tenant can’t agree on a settlement figure and if this happens, it can be escalated to our resolution team.
As the landlord or agent, you can use your online portal to raise the negotiations to our dispute resolution team ten days after the tenancy ends. To escalate this further you will need to contact the resolutions team at resolutions@omehq.com. The step by step process will be explained to you via the portal, where your case will be managed. You will also receive any updates on your dispute on your online portal so be sure to check this regularly.
Sometimes the gap between the landlord and the tenant can be bridged by what we call ‘early resolution’.
Instead of going through the formal adjudication process, we will communicate and negotiate with both parties. Often the difference between agreement and disagreement can come down to the smallest detail or a simple misunderstanding.
Our team is trained to spot this and will help you and your tenants avoid the more lengthy, formal adjudication process. We’ll help you to reach a fair and acceptable resolution and, once the tenant has paid the settlement, the process comes to an end.
On the very rare occasions that disputes reach formal adjudication, the process is almost identical to that of traditional cash deposit schemes.
Both parties submit evidence (via our online portal) and the case is reviewed by an independent adjudicator. We use the same team as mydeposits, so they really know what they are doing when it comes disputes as they have been handling them since 2007.
The adjudicator will assess the case and make a settlement based on the evidence provided. The tenants are then bound by the Ome Deposit Replacement Membership terms and conditions to pay the settlement.
There is a misconception that the deposit replacement scheme dispute process is much longer than for traditional cash deposits, but that is not the case with Ome’s Deposit Replacement Membership. Once a case is escalated to our resolution team, the following process is followed:
Most cases are resolved before the case is sent to dispute resolution, so the decision is often made within 15 days.
We get asked this question a lot because agents are worried that the landlord won’t get the money as there is no deposit to take it from.
The truth is that there is no need to worry – we pay the landlord the money after the adjudication and then collect the money from the tenant. If the tenant refuses to pay the debt is then our problem. We’ll then have responsibility for reclaiming the money from the tenant, by legal means if necessary.
Deposit replacement schemes offer several benefits for all parties, but, as with most new things, some agents, landlords and tenants are reluctant to use them because they are not quite sure how they work. That is why we have put together our guide, Deposit replacement schemes: Everything you need to know.
We’re sure once you know how they work, you’ll want to use them for the benefit of you and your customers.
We hope you now understand more about how deposit replacement schemes’ dispute processes work.
If you have any other questions about deposit replacement, please get in touch via hello@omehq.com or via the live chat.
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