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Over 200 Scottish buy to let investors have failed to use deposit schemes over the last 18 months, therefore breaching the law designed to protect tenants’ deposits.
Over that period those landlords found to have failed to lodge deposits with one of three government-approved deposit schemes have been forced to pay out.
Rented properties in Glasgow accounted for the greatest number of cases heard by the First-tier Tribunal for Scotland with 38 cases, closely followed by Edinburgh with 37.
In figures compiled by SafeDeposits Scotland, the largest award was made to tenants renting a property in Edinburgh, where the landlord was ordered to pay out £3,937.50 for not using one of the deposit schemes, and the lowest was £50 for a property in Hamilton.
One case in Shawlands saw a landlord with more than a decade’s experience not protect her tenant’s deposit in one of the deposit schemes, despite including deposit protection as a clause in the tenancy agreement.
The tenants paid £500 each at the start of the tenancy, and when it ended, the landlord requested a deduction which the tenant disputed.
When it came to light that the landlord had not used on of the deposit schemes, despite using them in previous tenancies, she was unable to make the deduction and the tenants were awarded £1000.
Victoria Smith, Chief Operating Officer at SafeDeposits Scotland, said: ‘Deposit protection legislation is designed to protect all parties involved in the private rented sector and costs landlords nothing to comply with.
‘The deposit schemes also offer free and impartial adjudication services to ensure that any deductions from deposits are fair and can be scrutinised.
‘We believe that the overwhelming majority of landlords operate within the rules, but the findings from our research into the first 18 months of the First-tier Tribunal demonstrates that there are some out there who don’t.
‘In most of the cases we’ve looked at, the landlord has not acted out of malice, but was either simply unaware of the legislation or forgot, however, that does not reassure tenants or save landlords from fines.’
Since the Tribunal began hearing cases of non-compliance with deposit protection at the end of 2017, £186,657 has been paid out to tenants, the equivalent of more than £900 per case.