The schemes, which will be assessed and approved by Scottish ministers before being put into play, will be free for tenants to use and will not require a charge or fee. The main aim of these schemes is to ensure that the tenant’s deposit is safeguarded and, in the instance of a dispute arising, that dispute can be dealt with by the scheme holding the deposit rather than both the landlord and the tenant having to go through costly court proceedings.
The new legislation was prompted by recent Governmental research which found that between 8,000 and 11,000 tenants in Scotland each year had part or all of their deposit unfairly withheld, equating to a loss of between 2.2 million and £3.6 million. The scheme intends to combat this loss and closely follows previous regulations already in place inEngland and Wales.
With regard to disputes, the Deposit Scheme will use only ‘hard evidence’ to decide any claims and settle disputes, thus eliminating the unfair withholding of part or all of a tenant’s deposit. However, the scheme does give the impression that it will be more in favour of the tenant meaning that letting agents and landlords will have to work considerably harder to provide solid evidence if their property has suffered genuine damaged as a result of the tenant.
It is doubtful that photographic evidence will hold much, if any, sway unless taken with a digital camera and accompanied with a date which can be proved to be within the tenancy period. Landlords will also need to provide dated images of the same items before the commencement of the tenancy and, subsequently, before the damage occurred. So it will be imperative, from now on, for landlords and letting agents to not only take the time to produce a written inventory but also a photographic inventory.
Many concerns have already been voiced by both Scottish landlords and letting agents over not only the added expense but also the extra time and effort necessary to safeguard their property and to provide the substantial evidence required should they need to make a claim on the deposit.
Once the deposit has been secured with an approved scheme the landlord will be required to send full details of the scheme holding the deposit to the tenant. The deposit will be held by that scheme until the end of the tenancy and then returned to the tenant, or the landlord, dependant on the circumstances. At the end of the tenancy, in order to get their deposit back, the tenant will need to submit a deposit return request however, if they fail to submit the request within a certain time period, the landlord’s request for part or all of the deposit will automatically be approved.
If a landlord fails to comply with the new legislation a tenant can apply to the court to have certain sanctions applied to the landlord which can include financial penalties.
Below we take a look at the deadlines by which both letting agents and landlords must secure their tenant’s deposits as stated in the new legislation.
•Landlords must ensure that all deposits received before March 7th 2011 are secured with the scheme by May 15th 2013
•Landlords must ensure that all deposits received either on or after March 7th 2011 but before October 2nd 2012 are secured with the scheme by November 3rd 2012
•Landlords must ensure that all deposits received on or after October 2nd 2012 are secured with the scheme within 30 working days of the commencement of the tenancy
If a tenancy beginning before March 7th 2011 is renewed either on or after October 2nd 2012 but before April 2nd 2013 the landlord must ensure that the deposit is secured with the scheme within 30 working days of the date of the tenancy renewal
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