Last year I reported that the Tenancy Deposit Scheme (TDS) run by the Dispute Service had announced that they were going to increase their fees. They have now announced what these are. Or rather they haven’t, because the fees information page tells us that all TDS members fees are going to be calculated individually now, and the implication is that those agents using the arbitration scheme to excess will have their fees hiked substantally.
The minimum fee has certainly had a bit of a hike, from £583 to £750, some 23%:
A third of the TDS membership has had their charges set at the new minimum. Only 12% of firms have been subject to any loading as a result of their high volumes of dispute referral. For those receiving a maximum discount, the average charge for a tenancy will be £10 or less.
Said John Hornsey, Chairman of The Dispute Service, the not-for-profit organisation responsible for the Tenancy Deposit Scheme: “Alarm bells rang last autumn but, in fact, they were set off by a small number of agents making disproportionate use of our ADR. Now we have evolved a much fairer charging system that takes full account of the way agents use the system, both in terms of the tenancies they protect and the disputes they prompt.”
To help members with the transition to the new arrangements, all new subscriptions for the year 2010/11 are being charged in two instalments. The second invoice, which will be issued in the summer, will take account of all changes to registered tenancies and any revision that can be made as a result of the numbers of disputes submitted.
Presumably after this, there will be fewer TDS agents taking a case to arbitration for disputes of £4.20.
My Deposits, in the meantime, smugly state that they are not increasing their fees at all. A press release on 22 December stated that prices would be frozen to 2009 levels, and a more recent press release on 19 January confirms this. My Deposits Chief Executive Eddie Hooker, stirs it further:
“Last year’s TDS decision to only accept ‘accredited’ agents was intended to reduce the risk and cost of protecting deposits. Their announcement yesterday of a hefty price increase suggests this approach is not working.
“Letting agents are likely to be frustrated as they can expect further price increases if they are unlucky enough to experience more disputes. This could be the first step along the road to charging for ADR.”
You can’t help wondering why it is that the (mostly for) agents service (TDS) is finding it so difficult to manage that they have limited their membership to accredited agents and are now skewing their fees so as to discourage arbitrations, whereas the (mostly for) landlords scheme (MyDeposits) seems to have no such problems. Could it be that landlords have been acting more responsibly?
What do you think?