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Landlords could face legal action under new deposit scheme

May 16 2013

A new scheme which came into force in Scotland this week means landlords could face legal action if they have not paid their tenants’ deposits into a legally required protection scheme.

Landlords were given until Wednesday May 15 to place tenants’ deposits in one of three schemes approved by the Scottish Government.

The new rules were introduced it in an attempt to prevent unscrupulous landlords from keeping their tenants’ money on false grounds.

SafeDeposits Scotland, one of the approved schemes, believe as many as 56 per cent of deposits may not have been paid into a protection scheme.

Malcolm Lindo, managing director of SafeDeposits Scotland said: “The clock has stopped for landlords and agents in Scotland. The deadline is now and if you let a property that is eligible for the scheme, are not signed up by the end of today, you could face legal action in the future.

“Based on the latest Scottish Government figures, we estimate there are up to 56 per cent of tenancies eligible for taking a deposit where a deposit has not yet been paid into a scheme.

“That’s worryingly low at this late stage and means thousands of landlords could face legal action from their tenant in the future.

“It is a legal requirement but also this scheme benefits both landlords and tenants. Feedback from landlords has been positive so far. Signing up helps to resolve any disputes that could arise at the end of the tenancy fairly, quickly and impartially. It’s a win-win situation.”

Scottish Government Housing Minister Margaret Burgess felt there had been a “strong uptake” from landlords.

She said: “May 15 marks the deadline for landlords to register tenant deposits under the Tenancy Deposit Protection Scheme, but the Scottish Government will continue to work with scheme providers and other stakeholders to promote awareness of the initiative.

“We approved three Tenancy Deposit Schemes in July 2012 to protect the deposits of tenants across Scotland. Each scheme provides a free dispute resolution service.

“So far, the schemes have seen strong uptake. Up to the end of March this year, over 129,000 deposits with a total value of £85million have been lodged with one of the three tenancy deposit schemes.

“It is important to stress that the majority of landlords act responsibly. As well as safeguarding tenants’ deposits the scheme also aims to protect and enhance the reputation of the majority of private rented sector landlords who act professionally and responsibly.”

  • If you need legal advice following a dispute with a landlord or tenant call PM Law solicitors at our Sheffield office on 0114 296 5444