The Housing (Scotland) Act 2006 introduced the concept of Tenancy Deposit Schemes to safeguard deposits paid by private residential tenants. Following from that The Tenancy Deposit Schemes (Scotland) Regulations 2011 came into force on 7 March 2011. The aim of the legislation is to reduce the number of deposits withheld without good reason at the end of a tenancy; ensure deposits are protected throughout the tenancy; ensure return of the deposit at the end of the tenancy and provide an independent mechanism to deal with disputes.

The Scottish Government is conducting a consultation on proposed Tenancy Deposit Schemes and is considering representations made by applicants to operate the scheme.

Timing and Compliance

When a scheme becomes operational, for all new tenancies starting thereafter, landlords must place deposits with a scheme provider no later than 30 days of the start of the tenancy.

For tenancies commencing after March 2011 but before there was an operational scheme, landlords must place the deposit with a scheme no later the date 30 days after the expiry of three months from the scheme’s operational date.

For all other tenancies landlords will have a period of nine months from the date a scheme becomes operational. However if a tenancy is renewed, either explicitly or by tacit relocation, on a day that falls three months or more, but less than nine months, after the first day a scheme becomes operational, the deposit must be placed within a period of 30 days from the date of the renewal.

Action to be taken

It is too early yet to give full details of the schemes but there are housekeeping measures which landlords may wish to carry out pending introduction.

It would be prudent, given that landlords with significant portfolios of properties may face having to place considerable sums with a scheme, to review rental portfolios to identify:-

1. All tenancies commencing before 7 March 2011;
2. The date of renewal of tenancies in category 1;
3. All tenancies commencing after 7 March 2011;
4. Was a deposit taken and if so how much?
5. Where is the deposit held?

Further Information

For further information on this please contact Adèle Nicol on your usual contact within Land Resources Department

This bulletin is for general information only and does not constitute legal, investment or other professional advice. Please contact us should you require advice on any particular legal issue. Anderson Strathern LLP accepts no responsibility for any loss that may arise if reliance is placed on any information or opinions expressed in this bulletin.