Rules governing the protection of tenancy deposits have finally spread to cover the whole of Great Britain.
All deposits must be protected in one of the three available government-mandated schemes, following the extension of the rules to cover landlords in Scotland. The date by which deposits must be protected depends on the date the deposit was received.
1. Deposits received before 7 March 2011, and where the tenancy is renewed on or after 2 October 2012 and before 2 April 2013 either by express agreement or tacit relocation must be protected, and the tenant provided with the relevant information, within 30 days of renewal.
2. Deposits received before 7 March 2011 in any other case must be protected, and the tenant provided with the relevant information, by 15 May 2013.
3. Deposits received on or after 7 March 2011 and before 2 July 2012 must be protected, and the tenant provided with the relevant information, by 13 November 2012.
4. Deposits received on or after 2 July 2012 and before 2 October 2012 must be protected, and the tenant provided with the relevant information, by 13 November 2012.
5. Deposits received on or after 2 October 2012 must be protected, and the tenant provided with the relevant information, within 30 working days of the start of the tenancy.
What are the protection options?
There are currently three deposit protection schemes on offer to Scottish landlords and tenants: The Letting Protection Service Scotland; Safedeposits Scotland; and MyDeposits Scotland.
Landlords are required to pay the deposit into one of these three schemes, and to ensure that the deposit remains protected throughout the tenancy. In the event of a disagreement at the end of the tenancy, adjudicators from the chosen scheme will determine the division of the deposit according to the law. Landlords must also provide tenants with specific key information about their deposit, including the name of the scheme in which it is being protected.
Are there any exceptions?
The deposit protection rules apply to all those landlords who are required to register with their local authority. So, while the majority of Scottish landlords will be legally obliged to protect deposits, there will be a number of exceptions. Primary amongst these are lets to family members, resident landlords, and houses for holiday use.
What if I don't comply?
There are severe penalties for landlords who do not comply with the new deposit protection rules. If a tenant suspects that their deposit has not been protected, or if they have not been provided with the appropriate information, they can apply to a sheriff court for action against you. If you are found not to have complied, the sheriff can order that you pay a penalty of up to three times the original deposit. The exact amount of the deposit will be determined based on the specifics of each case.
If you are in any doubt about your legal obligations you should seek independent advice.