Good old Alex Salmond has done it again. He would hate to admit it but he just loves to copy the English! ‘If England has a tenancy deposit scheme, then so must Scotland’ he said – well not in exactly those words but you get the gist.
At the end of January this year, the draft legislation for a Tenancy Deposit Protection (TDP) Scheme was laid before the Scottish Parliament. With an election looming, the SNP rushed to make sure it was approved before they lost power. Except as we all now know, the predictions were not quite right and the SNP did what the ‘anoraks’ said was impossible and were returned with a majority.
So now landlords in Scotland are likely to be faced with a TDP scheme which will become operational sometime in 2012. However, of course Alex needed to make it a little different from England and there are some differences – which are bound to send the more unscrupulous letting agents running.
The new scheme will only be custodial. Landlords in Scotland are clearly not trustworthy enough to insure their deposits.
But it gets worse!
The scheme is also going to apply to EXISTING tenancies. Therefore, the millions of pounds which agents and landlords have spent on lavish cars, holidays, sorry I mean, put in designated accounts over the last few years, will need to go into the scheme within a maximum of nine months of it going live.
Okay Mr Salmond, we know there will be no charge to landlords or tenants; we know the arbitration service is also free of charge; but surely you should have taken some responsibility. Who is going to publicise the scheme? Not the Scottish Government. No, the publicity must be provided by the scheme providers and reinforced by their desire to grow their market share.
Of course ignorance is no excuse for non-compliance, but relying on marketing alone to communicate the importance of protecting all new and existing deposits is bound to leave some landlords out of the loop. Which will have serious consequences.
If a landlord does not protect the deposit within 30 days of receipt the tenant can take him to court and will be awarded up to three times the value of the deposit. Alternatively, the tenant could wait until he has moved out of the property and then claim against the landlord within 30 days of leaving the property.
What this means is inventories are really going to need to be up to scratch. Detail everything in the property; the makes of appliances, model numbers, condition, everything. Make sure you take loads of photos. Most importantly, make sure the tenant signs everything when he moves in and remember all paperwork must have dates; do not preprint or write it in yourself.
In England and Wales almost all disputes which end in the tenants’ favour do so thanks to a lack of an inventory or the landlord failing to provide sufficient evidence to justify deposit deductions. So when it comes into force don’t try to ignore TDP, it won’t go away, and it is up to every landlord to make sure he protects himself from unnecessary litigation and cost.
For more information visit: http://www.mydepositsscotland.co.uk/home.aspx