Deposit Protection Edges Closer In Scotland

Tenancy Deposit Protection (TDP) has edged a little closer to reality with the publication of the draft Tenancy Deposit Schemes (Scotland) Regulations 2011. 

No potential provider of TDP has been made public, and details are still sketchy, but the legislation does outline the following:

• Provisions are only made for a custodial scheme. Removing the option available in England and Wales for landlords to hold retain deposits for the duration of the tenancy having used an insurance backed scheme.
• The scheme, or schemes, must be free for landlords and tenants to access.
• Dispute resolution must be provided at no cost to landlord or tenant.
• Landlords will have 30 days to protect a newly received deposit and notify the tenant

There also appears to be another major difference between this draft legislation and the Housing Act 2004, which introduced the provisions in England and Wales. 

Within nine months of a scheme becoming operational in Scotland it appears that landlords will be required to protect all existing, relevant, tenancy deposits.

Given the Scottish Government’s inability to implement and appropriately enforce private-landlord registration, the NLA is at a loss to understand why they should further extend themselves by embarking on a scheme of the magnitude of TDP.

While the NLA recognises the professionalising impact that TDP has had south of the border in relation to bringing tenancies to a close in an orderly fashion, we believe that politicians should concentrate on sorting out the mess of registration before committing to new regulation. 

If the Scottish Government are committed to implementation of TDP in the near future then it would be grossly unfair to provide fewer options to Scottish landlords than are available to their English and Welsh counterparts. As such it is crucial that landlords be able to choose between custodial and insurance backed options. To do otherwise would risk putting Scottish landlords at a further disadvantage.

Beyond simple unfairness, it would introduce a great deal of confusion for Scotland to operate TDP on an entirely different basis to England and Wales. It would also increase administration and operating costs significantly for those landlords active in both market places.