LRG has revealed that 38.2 percent of tenants do not know they can challenge deposit deductions through a government-backed scheme, in a survey of 860 tenants across England and Wales.
The study, carried out with more than 700 landlords, found a further 25 percent of tenants hold only partial knowledge of challenge rights. Among landlords, 21.8 percent did not know tenants held the right, while 31.5 percent reported only partial knowledge.
Deposit paperwork now carries extra weight as tenancies turn over under tougher enforcement and/record scrutiny. When both sides misunderstand the backstop, small rows over cleaning or damage harden into formal disputes that cost time and goodwill.
Cleaning drives most deposit disputes, TDS data shows
The Tenancy Deposit Scheme said just 1 percent of protected deposits needed formal adjudication in the year to March 2025. Cleaning was the most common issue, cited in 54 percent of cases.
LRG said tenants often do not know they can dispute deductions or that alternatives to a full cash deposit exist. The agency said clear communication at the start and end of each tenancy could stop many concerns becoming disputes.
“Tenants often do not know they can challenge deductions or that alternatives to a full cash deposit exist,” a spokesperson said. “Clear communication at the start and end of every tenancy could resolve a significant number of concerns before they ever become disputes.”
This follows Landlord Knowledge’s reporting on deposit protection as a gateway to possession rights, including guidance that landlords must prove protection to use Renters Rights Act possession grounds. Accurate prescribed information, timelines and scheme rules remain central to a safe claim.
Landlords told to close the communication gap
Agents are urged to explain rights, responsibilities and options in writing at check-in and check-out. Photos, inventories and mid-term notes help both sides agree what counts as fair wear against what needs cleaning or repair.
Landlords can reinforce that work through DPS findings on landlord plans after RRA and new redress plans under the Housing Ombudsman, which together point to higher standards for records and handling of tenant money.
Official scheme detail is available through Tenancy Deposit Scheme guidance on disputes, which sets out how adjudication works when agreement cannot be reached.
With turnover high in many cities, a short template message before check-out that lists the scheme, the time limits and how to raise a dispute can cut confusion. Keeping invoices for cleaning and repair also helps show that any deduction is fair and proportionate.
Alternatives such as insured deposit options and deposit replacement products have grown, but take-up still depends on clear explanation. Landlords who offer a choice should set out costs, cover and what happens at claim stage so tenants can compare cash against non-cash routes.
What this means for landlords
- If you take deposits: Reissue scheme details on time and keep proof of service with the tenancy file.
- Watch for: Cleaning claims without photos or invoices, which are hardest to defend at adjudication.
- Bottom line: Explain challenge rights up front; strong records settle most rows before they reach a scheme.
Editor’s view
Deposit rows rarely start with law. They start with vague check-out notes. Sharp photos and plain wording save more money than any dispute win.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 29 October 2026
Sources: LRG, Tenancy Deposit Scheme
Related reading: DPS finds most landlords plan to hold rents after RRA
