Scotland’s first tenancy deposit scheme set to launch in July

Share Article

With 2 months until the launch of Scotland’s first tenancy deposit scheme, in July 2012, the nation’s landlords and letting agents must start making preparations to register tenants’ deposits. To ensure that disputes over the return of deposits don’t automatically find in favour of the tenant, it’s essential to maintain high quality inventories and inspections. Property Toolkit’s Inspection and Inventory app is an innovative solution that can help save time and money by making it quick and easy to create property inventories.

Insufficient evidence can prevent landlords and letting agencies from successfully claiming on a tenancy deposit

Insufficient evidence can prevent landlords and letting agencies from successfully claiming on a tenancy deposit

In the event of a dispute, the scheme’s default position will be to find in favour of the tenant; letting agencies and landlords must provide evidence to prove that their claim on a tenancy deposit is valid and reasonable.

The Scottish Government recently announced the first deposit protection scheme since the Tenancy Deposit Schemes (Scotland) Regulations became law in March 2011. The Letting Protection Service Scotland has approval to start operating from 2 July 2012, fixing the dates by which landlords and letting agencies must comply with the regulations.

Under the new rules, landlords and letting agents are required to hand over to a Government-approved custodial scheme all deposits taken as part of a tenancy agreement. The money is held by the scheme until the end of the tenancy, at which point it is returned to the tenant and/or landlord as appropriate. Most landlords and letting agents are aware that the need to register and manage tenancy deposits will incur administrative overheads; other costs, such as maintaining adequate documentation, are less obvious.

In the event of a dispute, the scheme’s default position will be to find in favour of the tenant; letting agencies and landlords must provide evidence to prove that their claim on a tenancy deposit is valid and reasonable.

Many landlords and letting agencies have voiced concerns about the extra effort and expense entailed in creating and maintaining sufficient evidence to pursue a successful claim on a deposit. Property Toolkit’s groundbreaking Inspection and Inventory app could help to limit the impact of the regulations on property managers.

How disputes are resolved
--------------------------------------
The key benefit of the new arrangement is that disputes over the return of deposits will be resolved by the tenancy deposit scheme, rather than in court. The scheme serves as an impartial third party, so is able to arbitrate on such matters. All claims are decided on hard evidence alone, eliminating the opportunity for rogue landlords to withhold money on spurious grounds.

Evidence submitted by landlords and agencies may include tenancy agreements, property inspections and property inventories, and other documentation. Photographs of damage generally carry little weight as evidence unless accompanied by a dated image of the item, undamaged, at the start of the tenancy. Further weight is attached to images and reports that have been signed off by the tenant.

Property Toolkit’s Inventory and Inspection app allows users to create and maintain inspections and inventories of their property portfolio quickly and with ease. Photos are taken and data entered by the landlord or agent using their phone. The app then compiles the details into a report for immediate distribution to the tenant, allowing a single member of staff to generate and submit numerous reports in minimal time.

The tenant is required to submit a request for the return of the deposit at the end of the tenancy. Where the tenant fails to do so within the specified period, any request by the landlord to retain all or part of the deposit is automatically approved.

Important dates to note
----------------------------------
The launch of The Letting Protection Service Scotland on 2 July triggers the following deadlines by which landlords and letting agencies must comply with the new rules. These vary depending on when the tenancy started.

Deposits received before 7 March 2011 must be protected by 15 May 2013.
Deposits received on or after 7 March 2011, and before 2 October 2012, must be protected by 13 November 2012.
Deposits received on or after 2 October 2012 must be protected within 30 working days of the start of the tenancy.

Tenancies created before 7 March 2011, and which are subsequently renewed, are a special case. If the tenancy is renewed on or after 2 October 2012 but before 2 April 2013, the deposit for the tenancy must be protected within 30 working days of the tenancy renewal date.

Notes to editors
-----------------------
Background to the new legislation
Scottish Government research found that, each year, around 8,000 to 11,000 tenants in Scotland had all or part of their deposit unfairly withheld. The Tenancy Deposit Schemes Regulations aim to combat this loss, which equates to between £2.2million and £3.6million annually. The legislation is based on similar regulations previously put in place in England and Wales.

About Property Toolkit
--------------------------------
Technology company Property Toolkit specialises in developing and producing innovative solutions for the property management market. In particular, the UK based company specialises in products aimed at landlords and letting agencies. Our Inspection and Inventory app creates, manages and stores complete property inspections, including images of those items on a property’s inventory.

info(at)propertytoolkit.ltd.uk
http://www.propertytoolkit.ltd.uk
T. 0845 652 6568

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Ben Murdoch-Smith
Visit website