First Scottish tenancy deposit scheme approved
by Daniel Jones
A compulsory deposit scheme to safeguard tenants' money is being created in Scotland. The move, which will affect most landlords north of the border, was approved by housing minister Keith Brown.
Tenancy deposits amount to over £74 million every year in the majority of the 273,000 households that make up the private rented sector in Scotland. According to the Scottish government, it is estimated that up to 11,000 tenants have £3.6 million of their deposits wrongly withheld each year.
The Letting Protection Service (LPS) Scotland is the first tenancy deposit scheme to be approved. It has a dual purpose, aiming to protect both tenants and the reputation of the majority of private rented sector landlords, whom ministers agree "act professionally and responsibly".
Kevin Firth, director of The LPS Scotland, advised landlords to make sure they are aware of the legislation.
He said: "It will be compulsory for landlords and letting agents in Scotland to protect their deposits with a government approved scheme as soon as the legislation launches. It is crucial that those in the private rented sector don't fall foul of this legislation and take the appropriate steps to ensure that they are prepared for its introduction."
Once in place, landlords or their agents must pay deposits to an approved scheme and provide key information about the tenancy, the deposit, and the scheme which is protecting it, to the tenant.
It will be free for landlords to participate in and will provide access to a free and independent dispute resolution service, when there is a disagreement over the amount owed to the tenant when their tenancy agreement
comes to an end.
Ministers say two further schemes are being considered, with the intention of starting all three from July 2nd 2012. In order to provide landlords with time to prepare, the legal requirement to submit deposits into a scheme will come into effect from November this year.
In England and Wales, a number of important changes to the Tenancy Deposit Protection
scheme took effect on April 6th. The main reforms means that the time limit for protecting a deposit and providing the required information to the tenant has extended to 30 days from 14 days from the date of receipt.
Published on: April 11, 2012
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