I have recently reported on how a couple of recent cases had watered down the effect of the Deposit Protection Regulations and since writing these articles a further problem with the scheme has come to light.
It has proved quite common for landlords (or their agents) to find that they encounter difficulties recovering the deposit if the tenant leaves and refuses to cooperate with them.
If the landlord/agent is entitled to the deposit from the Deposit Protection Service but the tenant indicates that they are not prepared to use the DPS arbitration procedure or allow the landlord / agent to use the single claim process in order to recover the deposit, then the Deposit Protection Service have indicated to landlords/agents that they need to obtain a Court Order that expressly states that the deposit must be returned to the landlord / tenant.
Whilst, costs aside, obtaining a Court order does not sound much of a problem, issues arise because the Deposit Protection Service only appear to release the deposit if the Court Order states that they must do so. As the Deposit Protection Service also state that they must not be named as a party in the proceedings, it is very difficult (if not impossible) to convince a Court to name the Deposit Protection Service in the Court Order. The reason for this is that a Court would not tend to name someone in an Order they make unless that person is a party to those proceedings.
This being the case, the only option for landlords / agents in this instance appears to be to obtain a Court Order against the tenant and then make a separate application for a third party debt order against the Deposit Protection Service. This is a mechanism used to enforce Court Judgments and is often used as an alternative to the bailiff, attachment of earnings orders, etc …
Obtaining a Court Judgment and then a third party debt order is a particularly long way round and inevitably involves the landlord / agent being put to some considerable cost, which they are unlikely to be able to recover from the tenant.
It certainly seems that this arrangement is quite unsatisfactory, but whether anything is ever done about it remains to be seen.