The Tenancy Deposit Scheme coming soon to Scotland …

“It was a lot easier before you people stopped us keeping tenants’ deposits…”

The Tenancy Deposit Scheme in Scotland Regulations passed in March 2011 Custodial model only Includes all existing deposits, not just new tenancies

How many schemes will there be? More than one Scheme The deposit holder will be able to choose which scheme to use. A deposit holder can use more than one scheme at the same time

The Current Bidders are ……….  The Letting Protection Service Scotland  My Deposits  SafeDeposits Scotland

SafeDeposits Scotland…. A partnership between Landlord and Tenant organisations with an experienced Scheme Operator A not for profit company with members being: –NFOPP, RICS and SAL –SCVO, NUS, Shelter –The Dispute Service An Independent Scottish Chairman An indepe

SafeDeposits Scotland…. (2) Surpluses will be gift aided to new Charitable Trust The SafeDeposits Charitable Trust will act as a grant giving charity with the aim to promote best practice in relation to Scottish Private Rented Sector

SafeDeposits Scotland…. (3) Main Office in Edinburgh Call Centre and sub office in Glasgow Regional representation in Aberdeen, Inverness and Dundee

When does it start ? Scottish Government Timetable days 40 working days evaluation of bid 30 working days Public Consultation 20 working days analysis of Consultation responses 10 working days for Minister’s final decision Public consultation: starts Mid December : ends End of January 2012 Licence granted - mid March 2012

How will tenancy deposit schemes work? The tenant will pay the deposit to the landlord or their agent, as now. The deposit holder will pay the deposit to the Scheme The Scheme administrator will safeguard it in a designated account.

When do Landlords have to pay the deposit to the Scheme Key is 30 working days New Tenancies – 30 working days from date deposit taken Existing Tenancies post March 2011– 30 working days plus 3 months Existing Tenancies pre March 2011 – 9 months

When do Universities have to pay the deposit to the Scheme Assume a Scheme is operational on 1 st April 2012 This years graduate’s deposits can be retained until 9 th August Longer tenancies ( ie pre March 2011) until 31 st December 2012

How is the deposit returned? After the end of the tenancy, the landlord applies to the scheme for repayment of the deposit, giving details about how much of the deposit should be repaid to the tenant. The scheme administrator will write to the tenant asking them to confirm whether they agree. Where the tenant agrees, the deposit must be repaid within 5 working days.

What if the tenant disputes the claim? Where a tenant does not agree, the tenant can ask for the case to be referred to an independent adjudicator. The adjudicator will make a decision about how the deposit should be repaid, based on evidence provided by both parties. The scheme administrator must be satisfied that the tenant has tried to resolve the dispute with the landlord, and that this has failed, before referring a case to dispute resolution.

Resolving the dispute… Use of the dispute resolution service is free The adjudicator must make a decision within 20 working days of receiving the case Inform the parties within a further 5 working days Both parties have 10 working days to request a review of the decision The deposit must be returned by the scheme administrator within 5 working days of the final completion of the adjudication.

What happens if the tenant wants to go to Court? (1) The tenant is not obliged to use ADR and can go to court instead. But the landlord must use ADR where the tenants asks for it. The tenant has 30 working days to notify the scheme administrator if they want to use dispute resolution service.

What happens if the tenant wants to go to Court? (2). If the tenant want to go to court The deposit will be released as per the Landlord’s application, The deposit will be released within 5 working days after the expiry of the 30 working day period.

What if the Landlord applies for the return of the deposit but the tenant is not contactable? The scheme administrator writes to the tenant to confirm whether they agree or dispute the amount. If no confirmation is received from the tenant within 30 working days, the scheme administrator will repay any amount claimed by the Landlord within 5 working days Any amount due to the tenant will be held by the scheme in case it is applied for later.

What if the Landlord does not apply for the deposit? The tenant may also apply to the scheme for repayment of the deposit. The scheme administrator will write to the Landlord If it is agreed, the scheme administrator will repay the deposit within 5 working days. if it is not agreed or an alternative application made within 30 working days, the full deposit is repaid to the tenant within 5 working days of the end of the 30 day period.

So what are the sanctions? The tenant may apply to the court for sanctions against the landlord if a deposit is not paid to an approved scheme, or if a tenant is not provided with the required information within the required timescale. If the sheriff is satisfied that the Regulations have not been complied with, they MUST order the landlord to pay the tenant up to three times the amount of the deposit in addition may order the landlord to submit the deposit to an approved scheme..

6 key things to do now to get it right 1.Understand the Regulations “The deposit is the tenant’s money, so in the event that you don’t prove your case, the default path is for it to be returned back to them.”

6 key things to do now to get it right 2. Have an inventory and schedule of condition at check in and check out. “Without these key documents you may not be able to show if the property has deteriorated during the course of the tenancy and if the deterioration is the responsibility of the tenant.”

6 key things to do now to get it right 3. Make sure you have reconciled in your accounts where the tenancy deposits are. “Once the Scheme launches you will have strict time limits from the start of the Scheme to transfer your existing deposits. Deposits taken after the Scheme starts have to be transferred within 30 working days”.

6 key things to do now to get it right 4. Review the clauses in your tenancy agreement dealing with the deposit – do they cover the things you will want to claim from the deposit? “The tenancy agreement is the central place to records all parties’ obligations – so if you charge for a replacement tenancy agreement or a check out fee, then it should be recorded here.”

6 key things to do now to get it right 5. Review your end of tenancy procedures “Remember when the new Scheme starts you won’t be holding a deposit to help fund necessary end of tenancy repairs. Review how you will deal with this, such as by agreeing with landlords if you can hold back some rent monies or extending credit terms with contractors.”

6 key things to do now to get it right 6. Sort out your audit trails “If there is a dispute it’s essential that you have a good audit trail of everything to do with the tenancy. Check your filing and procedures now and make sure you can quickly provide the evidence you will need to deal with a dispute. If you make an agreement allowing the tenant to redecorate, make sure the terms of doing so are recorded in writing.”

How SafeDeposits can work with Universities Automatic Bulk Uploads

How SafeDeposits can work with Universities Automatic Bulk Uploads Payment schemes Dedicated Account manager Adjudication sessions on site Training

And finally…. Some light bedtime reading! Available at or shortly from

Any Questions

Malcolm Lindo SafeDeposits Scotland Tel: