Deposit Dispute ADR in Wales: How the Scheme Adjudication Process Works

When ADR Applies

Alternative Dispute Resolution through the authorised deposit scheme is the standard route when a landlord and contract-holder cannot agree on deposit deductions at the end of an occupation contract. ADR is free, and the adjudicator's decision is final and binding on both parties.

Either party can initiate ADR after the contract ends and attempts to agree have failed. The process is paper-based — the adjudicator reviews written evidence from both sides without a hearing.

The Evidence Standard

Scheme adjudicators decide disputes based on documented evidence, not assertions. The landlord bears the burden of proving that each proposed deduction is justified by:

• A contract clause that permits the specific type of deduction
• Photographic or written evidence of the property's condition at check-in and check-out
• Receipts, invoices, or quotes for repairs or cleaning
• Rent account records showing arrears

Without evidence, deductions fail. An adjudicator who receives a landlord's claim for £400 in cleaning costs but no check-in report showing the property was clean at the start will reject the claim.

Building the Evidence Bundle

The strongest position starts on Day 1 of the occupation contract:

Check-in inventory: A detailed, dated record of every room, fixture, and fitting, noting the condition and any existing damage. Photographs with timestamps. Ideally signed by the contract-holder to confirm agreement. This is the baseline the adjudicator will compare against.

Check-out inventory: The same level of detail at the end of the contract, conducted before the contract-holder returns the keys. Same rooms, same fixtures, same format, with dated photographs.

Comparative evidence: Place check-in and check-out photos side by side for each claimed item. If the check-in photo shows a clean oven and the check-out photo shows a grease-coated oven, the deduction has visual support.

Invoices and quotes: Dated repair invoices or at least two written quotes. Adjudicators expect actual or estimated costs, not round-number guesses.

Rent statements: A complete rent account showing payments received and any outstanding balance at the end of the contract.

Fair Wear and Tear

Adjudicators cannot award deductions for fair wear and tear — the natural deterioration of the property through ordinary, reasonable use over time. Carpets wear, paint fades, and grouting discolours. These are not actionable deductions.

The rule against betterment also applies. A landlord cannot replace an eight-year-old carpet (near the end of its expected life) with a brand-new one and charge the full cost to the contract-holder. Deductions are based on the item's remaining useful life, original condition, and age.

The Statutory Declaration Route

If one party becomes uncontactable after the contract ends, the other party can use the Statutory Declaration process. After 14 calendar days without a response, the claiming party files a Single Claim Application with the scheme, supported by a Statutory Declaration sworn before a solicitor or Magistrate. The scheme gives the non-responsive party a final 14-day window. If there is still no response, the scheme releases the funds to the applicant.

Undisputed Funds

Funds that are not in dispute must be released within 10 calendar days of agreement. If a landlord claims £200 from a £1,000 deposit, the undisputed £800 should be returned immediately. Withholding undisputed money as leverage to force agreement on the disputed portion is not permitted.

The Wales deposit protection guide includes a check-in/check-out inventory template and a deductions calculator to help build an adjudicator-ready evidence bundle.

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