Tenants' deposit protection schemes launched

Landlords must put deposits into an independent protection scheme account under the new rules

New schemes have been launched which require all Scottish landlords to protect tenants' deposits.

Landlords must now hand over deposits to an independent third party.

Three government approved schemes have been set up following the introduction of new regulations last year.

It is hoped the initiative - free for landlords and letting agents - will prevent agents holding on to money on false grounds.

One scheme is run by SafeDeposits Scotland, a not-for-profit partnership between landlords, agents and tenants, including student body NUS Scotland.

The Letting Protection Service Scotland and MyDeposits Scotland are the other two approved schemes.

With more than 270,000 households renting from private landlords, about £75m is expected to be transferred to the three bodies.

Landlords and letting agents have until next May to lodge all deposits, but can start doing so from now.

After 2 October they will be required by law to hand over all new deposits within 30 working days of a tenancy starting.

Housing Minister Keith Brown said: "These new regulations are historic because they offer, for the first time, a fair, cost effective approach that safeguards tenancy deposits.

The minister said most landlords behave responsibly, but added: "This legislation is aimed at tackling those who continue to tarnish the image of the private rented sector."

Previously tenants had to take legal action to try to recover deposit money but the regulations give them access to an independent dispute resolution service if the return of a deposit cannot be agreed.

SafeDeposits Scotland chairman Sir Andrew Cubie said: "Too often the actions of a minority of landlords give rise to a negative view of the private rented sector.

"This is a great day for tenants and good for landlords. We've worked for many years to get better protection for tenants in private flats and houses, including of course the tens of thousands of students who live in the private rented sector."

'Unscrupulous landlords'

Private letting agencies also welcomed the new schemes.

CKD Galbraith lettings manager Shirley Kenyon commented: "We think most will benefit from the change - landlords less likely to be embroiled in disputes, and tenants reassured that their deposit is safe.

"CKD Galbraith has made sufficient provision for the scheme and prepared tenants and landlords of the changes ahead."

She added: "There will be some effect on letting firms in Scotland - those who have relied on tenants deposits for cash flow purposes will struggle to implement the new rules.

"However, this can only be seen as a good thing if it ensures the rights and finance of tenants are guaranteed at all times."

The scheme has been welcomed by housing charity Shelter Scotland and the National Union of Students (NUS).

Graeme Brown, director of Shelter Scotland, said: "Today starts the clock ticking towards the point when all tenants' deposits will be protected by law in Scotland."

NUS Scotland president Robin Parker said: "Too often we've heard of deposits being withheld or deducted unfairly by a few unscrupulous landlords, and the tenancy deposit schemes launched today should go a long way to putting an end to this."