Massive overhaul for the private renting sector

A YEAR ago the Scottish parliament passed legislation to introduce a tenancy deposit scheme.

The law will come into force later this year following the appointment of a company which will be entrusted with holding all the deposits.

In the meantime the Scottish government has published a consultation document about what should be included in a tenant information pack for private tenants.

It aims to put in place a framework to ensure that tenants are given the information they need to be aware of their rights and responsibilities and those of their landlords.

The consultation closes on May 12 and up until then contributions are being sought.

So between this consultation about an approved tenant information pack and the introduction of the tenancy deposit scheme, the private renting sector in Scotland is undergoing a massive, and some might say long overdue, overhaul.

Throughout Scotland, it is estimated that between 8,000 and 11,000 tenants annually have £3.6 million of their deposits wrongly withheld, hence the need for legislation to stop rogue landlords holding on to money they should have returned. The majority of landlords already operate within the spirit of the law and legislation is being enacted to force the minority to conform.

Angus has more than 5,300 registered properties for rent and more than 3,000 landlords, and the number is steadily growing.

That probably means some £2.5 million in tenant deposits is held by Angus landlords at the moment.

Since the legislation was passed, tenants and landlords have had time to consider what it will mean for them. The legislation states that all deposits must be lodged with a third party which will become the custodian of deposits.

From the day the first custodial agency is appointed – and that is drawing very close – landlords will have to lodge all new, renewing and current tenancies within specified timescales.

Failure to do so could result in a hefty fine.

The deposit will be protected in a designated account until it is due to be repaid. The scheme will be free to tenants who will not have to pay a charge to their landlord or to the scheme in order to protect the deposit.

Landlords will apply for the return of the deposit when the tenancy ends and the scheme administrator must return the deposit within five working days of obtaining agreement by the tenant.

The legislation also provides for an independent dispute resolution service which will be available free of charge as a way for disagreements over the return of deposits being resolved. Landlords will be required to issue tenants with key information relating to the tenancy, the deposit and the scheme which safeguards the deposit.

Approved schemes will also be required to produce an information leaflet detailing their rules and procedures.

On the face of it, a year after legislation was passed it appears not much has happened. In fact, quietly behind the scenes there’s been a lot of activity to get everything in place.

The agency which will act as custodian for the deposits is about to be announced after an exhaustive search for the right body; a tenant information pack is being complied to ensure both tenants and landlords are absolutely clear about what is expected of each and landlords and agents have had time to work out the finances.

Some tenancy agreements have been in place for five years or more and letting agents and landlords can have hundreds of properties on their books and all their deposits have to be tracked, calculated and be ready to be transferred.

And that should ensure an end of rogue landlords, and make sure they do what the good landlords have always done.