The Tenancy Deposit Schemes (Scotland) Regulations 2011 became law on 7 March 2011. This legislation requires landlords including universities to hand over their deposits to custodial schemes for safe keeping.
Three government approved schemes have been set up following the introduction of new regulations last year.
The three schemes that have been approved by the Scottish Ministers are:
A tenancy deposit scheme is a scheme designed to protect tenants’ deposits by placing them with an independent third party.
The main objectives of requiring deposits to be safeguarded by tenancy deposit schemes are:
Once a tenancy deposit scheme is approved, any tenancy deposit accepted by a landlord must be deposited with an approved scheme within 30 working days of the commencement of a tenancy.
At the same time the landlord must ensure that key information is provided to the tenant, including details about the amount of the deposit and the location of the scheme where it is being held.
The deposit will then be kept by the scheme administrator in an account maintained for the purpose of holding tenancy deposits until they are repaid. The landlord must also provide proof of registration with the local authority when the deposit is paid over.
These duties relating to tenancy deposit regulations will not apply until an approved scheme is implemented.
Every landlord that is required to register in the local authority register of landlords, in accordance with the Antisocial Behaviour etc. (Scotland) Act 2004 (landlord registration), will need to comply with the Tenancy Deposit Schemes (Scotland) Regulations 2011.
This includes landlords of assured and short assured tenancies, university accommodation, as well as various other types of occupancy arrangement.
This will vary, depending on when the deposit was received, and when the first scheme becomes operational.
All deposits received after a scheme first becomes operational must be submitted to an approved scheme, and information provided to tenants within 30 working days of the start of the tenancy.
Landlords already holding deposits before a scheme becomes operational must also protect deposits but will be allowed more time to submit them to an approved scheme.
The duties in relation to tenancy deposits apply to landlords, as the person requiring the deposit. This does not mean that the landlord cannot employ an agent to act on his behalf to manage a tenancy, as they do now.
However, it will be in the interests of landlords who employ a letting agent to act on their behalf to satisfy themselves that the agent is acting in accordance with the regulations i.e. submitting deposits to an approved scheme and providing information to the tenant within the required timescales.
Any sanctions imposed as a result of an application by the tenant to a sheriff for noncompliance with the regulations, would apply to the landlord. The landlord may take action against the agent through the court if there has been a breach of contract, as is the case now.
Information about the regulations and tenancy deposit schemes can be found on the Scottish Government Website.
A copy of the Tenancy Deposit Schemes (Scotland) Regulations 2011 can be found on the UK Legislation Website.