Tenancy Deposit Schemes 1st May 2015
The Tenancy Deposit Schemes (Scotland) Regulations were introduced in Scotland on 7th March 2011, in order to safe guard tenants’ deposits from rogue landlords who frequently kept deposits at the end of a tenancy.
Since the scheme introduction, The Key Place has worked with SafeDeposits Scotland, in order to protect the interests of our landlords and tenants. SafeDeposits Scotland is the only not for profit scheme based in Scotland. They currently hold 60% of all deposits held in deposit schemes in Scotland.
To comply with the Regulations, any landlord or letting agent in receipt of a tenancy deposit must, within 30 working days of the tenancy start date:
- Transfer the deposit to a government approved scheme, such as SafeDeposits Scotland,
- Provide all tenants with particular key information, including confirmation of which scheme holds the deposit and the circumstances when all or part of the deposit may be retained at the end of the tenancy.
If a landlord fails to protect the deposit and/or does not provide the required information to the tenants, they can apply to the Sheriff Court for up to three times the value of the deposit, up to three months after the tenancy has ended. The Sheriff Court can order the landlord to submit the deposit to an approved scheme.
There are still many landlords who are not compliant, so are putting themselves at risk of this large penalty. Compliance needs to be encouraged, otherwise rogue landlords and letting agents will carry on, and poor practices will continue throughout the sector.
Deposits are taken in order to protect the landlord against non-payment of rent, or other costs at the end of a tenancy such as damage to the property, cleaning costs etc. At the end of the tenancy, in the majority of cases, there is no dispute. However sometimes there is disagreement between the landlord/agent and the tenant, and in these cases tenancy deposit schemes aim to resolve deposit disputes as efficiently as possible.
Previously, the only course of action was to pursue the tenant for costs through the court. However now tenancy deposit schemes provide an alternative dispute resolution service to help landlords and tenants reach an agreement about deposit repayment.
Therefore it is essential that landlords are able to fully evidence the state, condition and cleanliness of their property at the start and end of every tenancy. This is done by providing:
- a full and comprehensive inventory, including photographs
- inspection reports during the tenancy, including photographs
- tenancy check in and check out reports, including photographs
- all tenancy agreement paperwork, completed and signed correctly
- supporting evidence of estimates, invoices, reports etc.
The Key Place use bespoke inventory software to provide detailed and accurate inventories embedded with photographs. We would urge all landlords to agree to an inventory being carried out at their property at the start of every tenancy. It is essential that you safeguard your investment, and we will do everything we can to help you.
In 2014, The Key Place processed 157 deposits returns from SafeDeposits Scotland, and dealt with 4 formal adjudicated deposit disputes. The majority of the disputed amounts were awarded to the landlord. However, having a good inventory was a major reason that we were able to negotiate with tenants to get all of the deposit paid to the landlord in 26% of cases, or part of the deposit paid to the landlord in 32% of cases in 2014. This avoided protracted dispute procedures and meant that landlords got payment more quickly.
It is in the interests of landlords who employ a letting agent to satisfy themselves that the agent is acting in accordance with the Regulations. The Key Place work closely with SafeDeposits Scotland and adhere to all Regulations.