Safeguarding Rent Deposits in Scotland

Estimates provided by the Scottish government suggest that between 8,000 and 11,000 tenants in the country have their deposits held wrongly each year by their landlords. A new scheme aimed at safeguarding rent deposits for residential properties has come into force in Scotland. The new scheme came into force on Monday 02 July 2012. According to the Scottish Housing Minister, Keith Brown deposits amount to over £75 million. This amount is obtained from the majority of 273,000 households which form the bulk of private rented homes in the country.   The new scheme although compulsory will allow landlords and letting agents to participate freely.

Landlords and letting agents will opt into the scheme free of charge. Several safeguards have been implemented to ensure landlords can get legitimate access to deposits. The landlords under this scheme will only access the deposits under justified circumstances. Tenants will be protected from dishonest landlords. The tenants won’t need to seek for legal redress to get their deposits back. In essence tenants will get to enjoy a free, independent dispute resolution system if the tenants are not able to agree with the landlords about deposit refunds.

The institutions set up to provide this service are Letting Protection Service Scotland, Mydeposits Scotland and SafeDeposits Scotland. These institutions will accept the deposits for house leases from landlords or letting agents for safekeeping. These institutions will also communicate about this to the tenants.  All the details about the tenancy will be conveyed to the tenants by these institutions. As from the 2nd July landlords are at liberty to submit the deposits held by them to the scheme voluntarily.

However depending on when the tenancy agreement commenced, the law has set out a limit within which the landlords are to deposit the deposits with an approved scheme. The deadlines are between November 2012 and May 2013. The majority of landlords in Scotland are responsible and honest in their dealings. The new scheme is only meant to tame the few errant landlords who are tarnishing the image of private rented houses sector.

The tenancy deposit scheme is expected to yield a transparent and fair system for all tenants and their landlords. According to Marieke Dwarshuis, a director at Consumer Focus Scotland what remains for the success of the scheme is to have the landlords and the tenants informed about it. Understand their rights and responsibilities will help to ensure the success of the scheme.

In the video below, watch Eddie Hooker, CEO of my|deposits Scotland explain what the TDP legislation is, who it will affect, and what tenants, landlords and letting agents are required to do and by when.