Changes to The Rules on Lodging Tenancy Deposits
This blog won't be the most interesting read, but if you're a landlord you probably need to be aware of it's contents.
Since 2012, landlords of residential properties in Scotland have been required to lodge their tenants’ deposits in an approved tenancy deposit scheme, and to do so within 30 working days of the commencement of the tenancy. They are also required to provide their tenants with prescribed written information relative to the tenancy and the deposit.
This month several changes to the requirements surrounding tenant’s deposits came into effect. Of these, the most significant is a new requirement for deposit scheme administrators to notify tenants of their right to claim against their landlord for failure to lodge a deposit or provide the prescribed information. We are unclear however as to how scheme administrators will come to be aware of a new tenancy in the absence of any lodgement of a deposit.
The new rules also provide that where a landlord has been late in lodging the deposit and at the end of the tenancy seeks to make deductions from it, the scheme administrator must notify the tenant of the penalties available against the landlord. No such notification is required if the landlord proposes to return the deposit in full. This may influence landlords' decisions as to whether or not to claim against the depost if they have been late in submitting it.
To reflect the fact that private residential tenancies may now be ended by the tenant on 28 days’ notice, there is now no requirement to pay the deposit into an approved scheme where such a tenancy is brought to an end and the deposit returned to the tenant in full by the landlord within 30 working days of the beginning of the tenancy. In other words, if your tenant serves notice right at the start of the tenancy (which is a hypothetical possibility) there’s no need to lodge the deposit, but you must of course return it to the tenant in full at the end of the tenancy.
If you and your tenant have agreed that the deposit can be paid by instalments, you must lodge each instalment with the deposit scheme and also provide the tenant with confirmation of the cumulative amount of deposit received, within 30 working days of receipt – a disincentive perhaps to agree to an instalment basis.
The new requirements are set out in the Tenancy Deposit Schemes (Scotland) Amendment Regulations 2019, which came into effect on 11 November 2019.