Did you know...
Deposits totalling £1.2 billion have been submitted to the England and Wales custodial tenancy deposit protection scheme by 20,000 letting agents and 250,000 landlords.
It may be easy to assume that renting your house out is relatively straightforward – however, there are many landlords, new to the industry, who would tell you otherwise.
There’s a raft of things to remember that are not only best practice, but renting also carries a number of not insignificant legislative requirements.
If you’re new to the rental market, you may find our new checklist for landlords useful. It contains the minimum things you should be doing in order to provide the best possible rental experience for you and your tenants, as well as complying with your legal requirements.
Glasgow Property Lettings Ltd has been protecting their deposits with us since 2008 (formerly using The Deposit Protection Service) and have nearly 70 deposits protected within the scheme:
"It's really positive for our lettings industry that the Scottish Government has introduced tenancy deposit protection legislation in line with the rest of the UK.
"We've been protecting deposits since 2008 even though, as a Scottish agency, we haven't been required to until now, we feel very strongly about the peace of mind and reassurance that deposit protection offers our clients, both landlords and tenants alike. Our deposits were previously held with The DPS who are run by the same company as The LPS Scotland so we can be sure of their experience and confident that our tenants' deposits will continue to be protected to the highest level."
Colin Macmillan, Managing Director, Glasgow Property Lettings Ltd
Nicola Banks owns her own lettings agency in Scotland and has also been protecting deposits with The DPS:
"I have been using The DPS scheme since opening my business back in 2009, so I am familiar with The LPS Scotland's processes, which are user friendly, easy to manage and totally transparent. I am very happy that the Scottish Government has approved a scheme."
Nykky Banks, iLet Property Management Services
The Tenancy Deposit Schemes (Scotland) Regulations 2011 sets out the rules in relation to when a deposit needs to be protected. We have summarised these below;
Deposits need to be protected if the landlord is not one of the types listed below;
- A local authority
- A registered social landlord
- Scottish Homes
In addition, if the house is occupied by a person who is a member of the family of the landlord, the deposit does not need to be protected. Any other type of landlord must have the tenants deposit protected.
House TypeDeposits do not need to be protected if a house is of the following type (as described in section 83(6) (application for registration) of the 2004 Act);
- a care home service
- a school care accommodation service
- an independent health care service
- a secure accommodation service
- the house is being used by a religious order the principal occupation of which is prayer, contemplation, education or the relief of suffering
- a control order is in force in respect of the house; or
- the house is being used for holiday purposes
All other types of property must have the tenants deposit protected.
Existing landlordsIf you are an existing landlord in Scotland with a 'relevant tenancy' and take a deposit from your tenant, or you renew an existing tenancy you have 2 major obligations;
- The deposit must be protected in an approved tenancy deposit scheme within 30 working days of the start of the tenancy (subject to Scottish Government guidelines, see our Implementation and Compliance Flowchart ).
- The tenant must be provided with information relating to the tenancy as per Regulation 42 of The Tenancy Deposit Schemes (Scotland) Regulations 2011
If the deposit is not protected in an approved tenancy deposit scheme and/or Regulation 42 information is not provided and the tenant(s) can satisfy the courts that their landlord did not comply with their obligations, the courts could order the landlord to pay the tenant an amount not exceeding three times the amount of the deposit.
Regulation 42 information
The LPS Scotland cannot provide this information to tenants for landlords and letting agents, but have produced an Information Template for information purposes only. You can use this document as a template but it is your responsibility to ensure that it is correctly completed and served on the tenant(s) within thirty working days of the beginning of the tenancy (subject to Scottish Government guidelines, see our Implementation and Compliance Flowchart).