Property investors in Scotland holding landlord insurance policies are being urged to prepare for July 2nd when a big change in how tenant deposits are handled will come into force.
From July 2012 landlords must transfer tenant deposits to a licensed third party who will hold the deposit until a tenants contractual agreement comes to an end. The scheme has already been rolled out in other parts of the UK, and the great majority of people connected with the private rental sector in Scotland believe the scheme will improve landlord/tenant relations.
It has long been a bone of contention for many tenant and student organisations that private landlords are notoriously reluctant to return deposits at the end of tenure, while landlords say the deposit is only withheld if there has been damage caused to their property. In future the deposit holders will keep hold of the money until disputes between tenant and landlord have been resolved. New operators of the scheme are now springing up although it is difficult to get a licence. SafeDeposits Scotland is one of the new licence holders and is an amalgamation of Scottish landlords, tenants and letting agents. The not-for-profit organisation is backed by experts from England and has already formed a charitable organisation to run alongside their deposit holding business, which will provide grants to improve all aspects of the private housing sector in Scotland.
John Ferguson from the Scottish council of Voluntary Organisations welcomed SafeDeposits Scotland’s arrival and said: “Most landlords and tenants act fairly but where unscrupulous behaviour exists SafeDeposits will put a stop to it. Better still; the SafeDeposits Scotland Trust will put any surpluses to public good by promoting education, training and best practice in Scotland’s private rented sector. It really is a win-win all around.”