New deposit protection laws passed in Scotland

AFS Team·9 March 2011·3 min read
New deposit protection laws passed in Scotland
Students and landlords in Scotland will have to protect rental deposits and bonds in an official scheme after a new law was passed by the Scottish Assembly. The rules are similar to the deposit protection scheme that is running in England and Wales. The aim is to cut disputes between tenants and landlords over who owns the deposit at the end of a tenancy agreement. In some cases, landlords refuse to hand the money back without any reasonable excuse, while in others, many tenants complain about deductions for repairs and damage they have caused beyond fair wear and tear. Now, tenants and landlords in Scotland can take their arguments to an independent arbitrator to resolve their dispute. Eddie Hooker, Chief Executive, mydeposits.co.uk, commented: "We welcome news that, under these new laws, tenants in Scotland will be able to rent a home knowing the deposit they hand over is protected. This is a win-win situation for all of those involved in the private rented sector. For tenants, it ensures their rights are protected and, should all go well during the tenancy, they are guaranteed to get their full deposit back. Tenancy deposit protection is one of the many things that helps define the good landlord and letting agent and allows tenants to know they are being dealt with professionally. Tenancy deposit protection has been embraced by landlords and agents in England and Wales, where my|deposits has protected over one million deposits. We hope it proves as popular and successful in Scotland." Nevertheless, the courts have found that the underlying deposit protection law is flawed. Many tenants have tried to claim compensation from landlords at three times the amount of the deposit if they do not place the cash on protection within 30 days. Several court cases have ruled against this action, claiming the wording of the law is ambiguous and poorly drafted. Hundreds of landlords are pursuing action to recover their money after handing over fines in cases that have now been overturned. Tenancy deposit protection scheme mydeposits.co.uk has welcomed news the Scottish Parliament has passed legislation paving the way for deposit protection for tenants. The laws will ensure tenants' deposits are held safely by a third party and returned at the end of the tenancy. Any dispute over the amount returned would be resolved through an alternative dispute resolution process.