The Tenancy Deposit Scheme

This scheme is introduced under the Tenancy Deposit Schemes (Scotland) Regulations which came into force on 2^nd July 2012. All schemes operating under the regulations are provided free to the landlord and tenant.

Which types of tenancy are affected?

The scheme applies to all tenancies with the following exceptions:

• Lets to family members
• Liferents
• Houses for holiday use
• Properties used by religious orders and organisations
• Care accommodation
• Houses subject to control orders
• Agricultural and crofting tenancies
• Tenancies with resident landlords
• Property in transitory ownership (eg owned by executors)

What is the deposit?

The rules apply to any deposit paid by a tenant as security for the performance of the tenant’s obligations under the lease. This may be up to twice the monthly rental payable under the lease. The rules will apply whether the deposit is paid in a single payment or by instalments. It makes no difference whether the deposit is paid direct to the Landlord or to an agent.

The rules do not apply to a holding deposit, i.e. a deposit paid in advance of the lease commencing. But if the holding deposit is subsequently held as a security deposit the rules would then apply.

What must the Landlord do?

Unless the tenancy is one of the exempt classes the Landlord must pay the deposit to an approved scheme.

The landlord must also supply certain specified information regarding the deposit to the tenant.

When must the landlord comply?

In relation to tenancies already in existence prior to 2^nd July 2012 or entered into prior to 2^nd October 2012 this must be done within specified timescales (generally 13^th November 2012). For new leases where the deposit is paid after 2^nd October 2012 the deposit must be paid to the scheme within 30 days of the beginning of the tenancy.

Failure to comply

If a landlord fails to lodge the deposit to a scheme the tenant can raise any action against the landlord at the Sheriff Court. The court can impose a fine of up to 3 times of the deposit amount. This is paid to the tenant. The court can also force the landlord to apply to a scheme.

The tenant can make a claim during the tenancy and up to 3 months after tenancy ends.

Refunding the deposit

A landlord or tenant can apply to the Scheme for the deposit to be released. If the other party confirms agreement deposit will be paid within 5 working days.

If nothing is heard from the other party within 30 working days money is released.

No interest is payable on the deposit.

Disputes

If a landlord seeks to withhold a certain amount of the deposit the undisputed amount will be repaid as soon as practicable.

The disputed amount will be paid out after decisions is made.

Both landlord and tenant can request a dispute resolution.