Scotland gets new rental property safeguard scheme for deposits
A compulsory scheme to safeguard rent deposits for residential properties in Scotland has come into force today (Monday 02 July).
Deposits amount to more than £75 million in the majority of the 273,000 households that make up the private rented sector in Scotland, said Housing Minister Keith Brown.
He said that the tenancy deposit scheme will be free for landlords and letting agents to participate in, and ensure that landlords can legitimately access deposits where justified.
Tenants will no longer have to take legal action to seek recovery of a wrongly withheld deposit. This will mean that tenants will have access to a free and independent dispute resolution service, where agreement over the return of a deposit cannot be agreed by the tenant and landlord.
SafeDeposits Scotland, Letting Protection Service Scotland and Mydeposits Scotland will take deposits from landlords or their agents for safekeeping and provide information about the tenancy, the deposit and the scheme to the tenant.
Landlords can submit deposits to schemes from July 02 voluntarily, if they wish. However, by law, they will need to submit deposits to an approved scheme from between November 2012 to May 2013, depending on when the tenancy started.
‘The Scottish Government has estimated that between 8,000 and 11,000 tenants annually have £3.6 million of their deposits wrongly withheld. These new regulations are historic because they offer, for the first time, a fair, cost effective approach that safeguards tenancy deposits,’ said Brown.
‘It is important to stress that the majority of landlords behave responsibly. This legislation is aimed at tackling those who continue to tarnish the image of the private rented sector,’ he added.
Graeme Brown, director of Shelter Scotland, said that the new scheme will only work properly if tenants are diligent and know their rights and landlords and agents embrace the scheme fully. ‘Then and only then, will the unfair withholding of millions of pounds from deposits by landlords and agents be a thing of the past, as will the hardship it causes to tenants,’ he added.
Robin Parker, president of NUS Scotland, said that the tenancy deposit scheme would result in a transparent and fair system for all. ‘This is a great day for tenants and good for landlords. We've worked for many years to get better protection for tenants in private flats and houses, including of course the tens of thousands of students who live in the private rented sector,’ he explained.
‘Too often we've heard of deposits being withheld or deducted unfairly by a few unscrupulous landlords, and the tenancy deposit schemes launched today should go a long way to putting an end to this,’ he added.
Getting a deposit back has often been an uphill struggle for many tenants in the private rented sector, according to Marieke Dwarshuis, director at Consumer Focus Scotland. ‘The new safe house for deposits and the independent dispute resolution service are great news for tenants and will ensure there is a fair, clear and efficient system in place for everybody concerned,’ he pointed out.
‘The key to success now is to ensure tenants and landlords are informed about the scheme and everyone clearly understands what their rights and responsibilities are,’ he added.