A deposit protection scheme for tenants in Scotland was passed
by the Scottish Parliament on the 4th of March this year.
The law will come into force later in 2011 and is
a welcome step in addressing what can be a problematic area for
tenants and landlords alike.
A deposit protection scheme has been in place in England since
April 2007 so this new legislation will help balance out tenants'
rights on both sides of the border.
How will the scheme work?
The final details of the tenancy deposit protection scheme in
Scotland have still to be announced. What we do know is that
tenant deposits will need to be launched with a third
party in order to help safeguard them.
This will help to give responsible landlords and tenants more
peace of mind when it comes to handling any disputes at the end of
an existing rental agreement.
Last year in Scotland it's estimated that over £3.5 million
worth of tenant deposits were withheld by landlords without
legitimate reason, so it's an issue that needed addressed.
Will the deposit protection scheme stop rogue
landlords?
This is a difficult question to answer as we don't yet
know all the details of the tenancy deposit protection
scheme.
Some unregistered rogue landlords will continue to operate
outside the parameters of the law and clearly they are the ones who
won't be taking part in this scheme.
The main motivation for rogue landlords is money so it's likely
they will carry on holding onto tenants deposits themselves rather
than passing them onto a third party agency.
What does this mean for tenants, landlords and letting
agents in Scotland?
There's no doubt that the introduction of this scheme is
good news for tenants in general. Prospective
tenants in Scotland should always check if their landlord is
registered with their local council or not before handing over any
deposit.
Once this deposit protection scheme comes into place later this
year, it's wise to make sure you familiarise yourself with the
detail contained in it.
For landlords and letting agents the picture is not
quite so clear. Depending on the fine detail of the
deposit protection scheme it could create another level of
administration and paperwork to be complied with.
There is an argument that this new measure could effectively
just take up more time for legitimate landlords and agents whilst
doing little to address the real problem of rogue landlords.
One thing's for sure, this is a topic that will be
watched with close interest by all affected parties in the coming
months as more details are made public.
