A tenancy deposit is a sum of money which you may ask a tenant to pay at the start of a tenancy, and which must not amount to more than two months’ rent.
The money is held as security against the tenant not meeting their obligations in connection with the tenancy or occupancy arrangement.
The tenancy agreement should set out the circumstances in which the deposit may be withheld at the end of the tenancy. For example, you may decide to keep some or all of a deposit if it is needed to pay for:
- damage you have caused to the property
- cleaning bills if the property has been left in poor condition
- bills that are left unpaid, for example fuel or telephone bills
- any unpaid rent
What is a tenancy deposit scheme?
A tenancy deposit scheme is an independent third party scheme which has been approved by the Scottish Government to hold and protect tenant's deposits until they need to be repaid at the end of the tenancy.
Under the Tenancy Deposit Schemes (Scotland) Regulations 2011 you are required to submit any tenancy deposit you receive into one of the three approved schemes - please see below for more details.
Why are the schemes being introduced?
The schemes are being introduced in response to concerns about the large sums of money that are unfairly withheld from tenants deposits by some landlords and letting agents at the end of a tenancy.
The Scottish Government oversee the Tenancy Deposit Scheme, we do not have any input into the schemes and are not able to show preference to any particular scheme. For further information please see the Scottish Government website.
What does the introduction of the tenancy deposit scheme mean for landlords?
Most landlords who let privately rented property are required to register with the local authority in which the property is situated. Every landlord who receives a deposit, and who is required to register in the local authority register of landlords (in accordance with the Antisocial Behaviour etc. (Scotland) Act 2004) must comply with the Tenancy Deposit Schemes (Scotland) Regulations 2011.
This includes landlords of assured and short assured tenancies, university accommodation, as well as various other types of occupancy arrangement.
The regulations require that you must pay deposits into an approved scheme and ensure that the money is held by an approved scheme for the duration of the tenancy. Evidence of registration with the relevant local authority must be provided when the deposit is paid over.
The tenant must also be provided with specific information about the tenancy, the deposit and the scheme that will be protecting it.
For further information about Landlord Registration, please contact our Housing Strategy team
What happens if you don't comply with the tenancy deposit legislation?
If you don't protect the deposit with a scheme, or provide the required information within the specified timescales, a tenant can take you to court. Where satisfied that you have not complied, a sheriff can order you to pay the tenant up to three times the deposit.
Advice agencies and the Housing Strategy team will be able to offer guidance and support to a tenant who wishes to take action against you over a tenancy deposit.
What happens if you use a letting agent?
- You can still use an agent to act on your behalf to manage a tenancy
- The duties in relation to tenancy deposits ultimately apply to you, as the person requiring the deposit
- Any sanctions imposed by a court will apply to you
- If you employ a letting agent you must satisfy yourself that they act in accordance with the Regulations
- You may take action against the agent through the court if there has been a breach of contract
Further information about tenancy deposit schemes and free information sessions can be found on the Scottish Government website.
Who can I lodge a deposit with?
There are currently three schemes running:
- The Letting Protection Service Scotland Tel: 0844 472 6666
- SafeDeposits Scotland Tel: 0845 604 4345
- MyDeposits Scotland Tel: 0207 840 8917
Please contact the individual schemes for further information.