Landlords with properties in Scotland (including landlords based outside the country) need to be aware of the start date of the new Scottish Tenancy deposit scheme and their future obligations. The Tenancy Deposit Schemes (Scotland) Regulations 2011 came into force on 7 March 2011 although it’s only on 2 July 2012 that the deposit scheme is becoming active. Unlike the schemes available in England and Wales the Scottish scheme is a custodial format meaning that landlords will have to hand deposits over to the scheme administrators. This means that an independent third party will protect deposits until they are due to be repaid.
All landlords must comply with the new scheme even if you don’t think of yourself as a professional landlord. It doesn’t matter if you only rent out your home or have 50 properties, you still have to comply with the new Tenancy Deposit Scheme for Scotland.
Why have the new regulations come about? For some time there have been concerns that someprivate landlords unfairly withhold tenants’ deposits. This in turn led to provisions in the Housing (Scotland) Act 2006 to bring forward regulations for the approval of tenancy deposit schemes in Scotland.
It took some time for a scheme to be approved by the Letting Protection Service Scotland hence why the Scheme is only starting on Monday 2 July 2012. This is also the date whereby the legal duties on landlords who receive a deposit in connection with a relevant tenancy will start.
The legal obligations on landlords are:
to pay deposits to an approved tenancy deposit scheme
to provide the tenant with key information about the tenancy and deposit.
Now is the time for Scottish landlords to get their house in order and the new rules apply equally well to professional and novice landlords alike. There are likley to be both welcome and unwelcome consequences for both tenants and landords. The media (and Scottish Government) make much of the fact that private landlords don’talways behave in a proper manner when it comes to returning deposits. You have to wonder whether an equal number of tenants fail to meet their landlords’ expectations.
With the Scheme now becoming active it is more than likely that a number of tenants will find their leases not being renewed. Going forward landlords will have to keep detailed condition reports for every property they let which can only be a good thing. Also if it makes more tenants behave responsibly then everyone wins – including landlords. The return of a tenant’s deposit can’t be left to the whim of a landlord.
However it is likely that a number of difficult tenants will find themselves seeking new accommodation.
The Key Date is 13 November 2012
The dates by which landlords must pay deposits to an approved scheme and provide information to the tenant vary, depending on when the deposit was received:
Deposit received prior to 7 March 2011 and where tenancy renewed on or after 2 October 2012 and before 2 April 2013 (Regulation 47(a))
Within 30 working days of renewal
In any other case (Regulation 47(b))
By 15 May 2013
Deposit received on or after 7 March 2011 and before 2 July 2012
(Regulation 48)
By 13 November 2012
Deposit received on or after 2 July 2012 and before 2 October 2012
(Regulation 4)
By 13 November 2012
Deposit received on or after 2 October 2012
(Regulation 3)
Within 30 working days of the beginning of the tenancy
Only one scheme is currently approved – Letting Protection Scotland. Two further schemes are being considered one of which is MyDepositsScotland. It’s hoped that the two additions will be up and running for 2 July. We have had good experience of the My Deposits scheme in England and if approved in Scotland, we’ll be going with them.
And don’t forget there are penalties for non-compliance. Don’t think you can “get away with” because tenants will be up to speed even if you are not!
Comments on this entry are closed.