From 2 October 2012, any new or future deposits taken by landlords and letting agents in Scotland must by law be protected with a Government-licensed scheme such as my|deposits Scotland within 30 working days from the beginning of the tenancy.
The precise deposit protection deadline varies depending on when the deposit was first received, but there are two important dates that landlords and agents have to bear in mind.
The first is 13th November 2012. Landlords and letting agents in Scotland who took a deposit from their tenants after 7 March 2011 have until this date to lodge it with one of the Schemes.
After this, the next key milestone is 15 May 2013. This deadline relates to landlords and agents who took a deposit prior to 7 March 2011 and have not renewed the tenancy since the enactment of the legislation on 2 July.
As well as protecting deposits, landlords and agents must also communicate key deposit protection information (see below) to the tenant within 30 working days of the protection. Failure to meet the relevant deposit protection deadline or to issue the deposit information to the tenant could result in a fine of up to three times the deposit amount.
Complying with the legislation
In order to comply with the legislation landlords and agents must protect the deposit and pass the following information to the tenant:
Deposit protection certificate
- Confirmation of the amount of the deposit paid by the tenant and the date on which it was received by the landlord
- The date on which the deposit was paid to the scheme
- The address of the property to which the deposit relates
- A statement that the landlord is, or has applied to be, entered on the register maintained by the local authority
- The name and contact details of the Scheme which the deposit was paid.
Information about deposit deductions
This requires the landlord to advise the tenant the circumstances in which all or part of the deposit may be retained at the end of the tenancy, with reference to the terms of the tenancy agreement.
Responsibility for protecting deposits
Importantly, the responsibilities relating to tenancy deposits ultimately remain with the landlord even if a letting agent is employed to manage the property. If you use a letting agent it is important to ensure that they have protected any deposits and that they have Client Money Protection insurance.
For further guidance about tenancy deposit protection, visit the Resource Centre at www.mydepositsscotland.co.uk.