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Landlords FAQ

The Tenancy Deposit Schemes (Scotland) Regulations 2011

What do the Tenancy Deposit Schemes (Scotland) Regulations 2011 mean for landlords?

Any tenancy deposit accepted by a landlord must be transferred to an approved tenancy deposit scheme, such as SafeDeposits Scotland, within 30 working days of the beginning of the tenancy.

The landlord must also provide the tenant with certain key information, including confirmation of which scheme holds the deposit, within the same time period.

What information must be given to the tenant?

There is set information which must be provided to the tenant under the Regulations. SafeDeposits Scotland has produced a template document, called the Prescribed Information form, to help landlords with this step. The Prescribed Information form includes: the name of the landlord; the landlord's registration status; the name of the tenant; the property address; the amount of the deposit; the date the deposit was received by the landlord; the date the deposit was paid to a scheme; and the circumstances under which all or part of the deposit may be retained at the end of the tenancy.

What happens if a landlord does not comply with the Regulations?

Should a landlord fail to protect deposits and/or provide the set information in accordance with the Regulations, tenants can apply to the Sheriff Court for sanctions against the landlord. If the Sheriff is satisfied that the landlord has failed to comply with the Regulations, they must order the landlord to pay the tenant up to three times the amount of the deposit. In addition they may order the landlord to submit the deposit to an approved scheme.

A tenant has up to three months after the tenancy has ended to make an application to the court for sanctions against the landlord.

What do the Regulations mean for letting agents?

If a tenant pays a tenancy deposit to a letting agent, the deposit must still be transferred to an approved tenancy deposit scheme and the set information provided.

However, the duties in relation to tenancy deposits apply to landlords, as the person requiring the deposit, and so it is in the interests of landlords who employ a letting agent to satisfy themselves that the agent is acting in accordance with the Regulations. Any financial sanctions for non-compliance will apply to the landlord, even if a letting agent has been acting on their behalf.

About SafeDeposits Scotland

What is SafeDeposits Scotland?

SafeDeposits is an independent tenancy deposit scheme approved by the Scottish Government. SafeDeposits Scotland holds the deposit during the tenancy in order to keep it safe and to make sure it is available to be returned to the tenant at the end of the tenancy, if they have met the terms of their tenancy agreement. SafeDeposits Scotland also offers an alternative dispute resolution (ADR) process if landlords and tenants cannot agree on how the deposit should be repaid at the end of the tenancy.

Is SafeDeposits Scotland free to use?

Yes. SafeDeposits Scotland is funded entirely from the interest earned on deposits held, and landlords, letting agents and tenants do not have to pay any fees to take part in the scheme.

What is the SafeDeposits Scotland Trust?

The SafeDeposits Scotland Trust is a grant giving charity designed to promote education, training and best practice in Scotland's private rented sector.

How are the deposits held and protected?

SafeDeposits Scotland will hold the deposit in a ring-fenced account until it is due to be repaid at the end of the tenancy. This means that the deposit will be safe, even if a landlord or letting agents goes out of business.

The deposit is held seperately from SafeDeposits' own funds and is therefore protected against any claim from SafeDeposits or any of its creditors should SafeDeposits fail. This means that the deposit is protected and available for repayment or transfer to another scheme if necessary.

Under the Financial Services Authority Compensation Scheme a landlord could make a claim to the FSA for the value of the deposit (up to 85,000) if SafeDeposits becomes insolvent.

Who can use SafeDeposits?

SafeDeposits is available to all landlords who are required to comply with the Regulations, and any letting agents acting on behalf of landlords in relation to the tenancy deposit.

How to use SafeDeposits Scotland

How do I register with SafeDeposits Scotland?

The first step to protecting a deposit with SafeDeposits Scotland is setting up a user account. You can do this online, over the phone, or by sending a Registration form in the post. We will then send you a Welcome pack with a copy of your username and user PIN.

How do I add a deposit to my user account?

We require basic details about the tenancy (i.e. the tenancy address, the amount of the deposit, the tenant's details, etc.) before we can protect the depost. You can add the deposit to your user account online, over the phone, or by sending a Deposit Protection form in the post.

The deposit will be assigned a Deposit Account Number (DAN) which identifies it on our system.

How can I transfer the deposit to SafeDeposits Scotland?

You can transfer the deposit to us by BACS, debit card or cheque. Please use the Deposit Account Number (DAN) as the payment reference when transferring the deposit, so that our accounts department can allocate the payment to the relevant deposit account on our system.

When the payment has been allocated to the relevant deposit account, we will send a Deposit Protection Certificate to the landlord, tenant, and letting agent, if there is one, as confirmation that the deposit is held by SafeDeposits Scotland.

When should I transfer the deposit to SafeDeposits Scotland?

The deposit must be transferred within 30 working days of the tenancy start date, in compliance with the Regulations.

When should I issue the Prescribed Information form?

The Prescribed Information form must be provided to all tenants on the tenancy agreement within 30 working days of the tenancy start date.

The Prescribed Information form can be provided to the tenant by email, post or in person. It is a landlord's personal choice if they ask the tenant to confirm in writing that they have received the Prescribed Information form.

How long will it take to receive my Deposit Protection Certificate?

The Deposit Protection Certificate will be sent once the payment has been allocated to the relevant deposit account on our system. It can take 2-3 working days for our accounts department to allocate the payment.

If we have an email address for the landlord, tenant and letting agent, the Deposit Protection Certificate will be sent automatically by email. If we don't have an email address for any of the parties, we will send the Deposit Protection Certificate in the post.

Who is the lead tenant?

The lead tenant is specified on your Deposit Protection Certificate.

If there is more than one tenant on the tenancy agreement, the landlord or letting agent will nominate one of the tenants as the lead tenant. The lead tenant will act on behalf of all joint tenants at the end of the tenancy during the repayment process. We advise that the landlord discusses the nomination of the lead tenant with all tenants before creating the deposit account.

The lead tenant is responsible for managing the repayment process and it is only their unique Deposit Repayment Number (DRN) which will allow them to access the relevant repayment options at the end of the tenancy.

The lead tenant can be changed during the tenancy. The landlord or letting agent can contact us at any time to nominate a new lead tenant.

What is my Deposit Account Number (DAN)?

Every deposit account on our system is assigned a unique Deposit Account Number (DAN). This number identifies the deposit on our system. The landlord, tenant(s), and letting agent, if there is one, share the same DAN.

The DAN is on the Deposit Protection Certificate which is sent to all parties when the deposit is first transferred to SafeDeposits.

If you need to contact us regarding your deposit, please quote your DAN.

Do I receive a Deposit Repayment Number (DRN)?

We only send a Deposit Repayment Number (DRN) to tenants. A tenant will need to use the DAN and their DRN together to log in to their user account to update their personal details, participate in the repayment process, provide their repayment details, etc.

Landlords and letting agents do not receive a DRN as they can log in to their user account using their PIN or username and password.

During the tenancy

If only one tenant is moving out, how do they get their deposit back?

We have a tenant changeover function on our website to be used when only one tenant is moving out of the property. The landlord or letting agent must log in to their user account to confirm which tenant is moving out and how much of the deposit is due to them. We will then contact the outgoing tenant for confirmation of their agreement and to ask for their repayment details. If the outgoing tenant agrees to the tenant changeover request, we will repay them their portion of the deposit, and the remainder of the deposit will automatically be moved into a new deposit account.

We have a guide on our website which explains the tenant changeover process step-by-step, including screenshots of what you can expect to see on-screen at each stage.

What should I do if there is a tenant changeover but the outgoing tenant has deductions from their share of the deposit?

The tenant changeover process can only be followed if there are no deductions from the outgoing tenant's share of the deposit. If you wish to make any deductions from their share of the deposit, you should enter a Proposal for Deposit Repayment instead. This is so the tenant has access to our alternative dispute resolution (ADR) process if they dispute the deductions from their deposit. We cannot adjudicate on portions of the deposit which is why ADR is not possible as part of the tenant changeover process.

When entering a Proposal for Deposit Repayment in this situation, you should enter that the deductions from the deposit and the remaining tenant's portion of the deposit should be repaid to you, and the rest paid to the outgoing tenant.

The property has been taken over by another landlord or letting agent. How do I update the deposit account?

You can transfer the deposit directly from one SafeDeposits user account to another. The new landlord or letting agent should provide their user PIN and company name or surname to the existing landlord or letting agent. The existing landlord or letting agent can then log in to their user account, view the deposit summary page for the relevant DAN, and use the 'Transfer deposit' function at the bottom of the screen. The new landlord or letting agent then simply needs to log in and accept the transfer.

We have a step-by-step guidance document on our website which explains the user the user function.

I have increased my tenant's deposit. How do I update the account?

Please contact us by telephone, email, or via our Live Chat function, to confirm the new deposit amount. We can then increase the deposit amount on our system, which means a 'top up' function will become available at the bottom of the deposit summary page. You can use this function to follow the payment steps to make payment as normal. Please remember to use the DAN as a payment reference so that our accounts department can allocate the payment to the relevant deposit account.

The tenant is moving from one of my properties to another - can I just change the address on the deposit account?

No. As a new tenancy agreement will be required to reflect the change in the tenancy, a new deposit account must be set up. You should enter a Proposal for Deposit Repayment on the current deposit account to return the full deposit to you. When repayment has been made, you should create a new deposit account, for the new address, and transfer the deposit to us using the new DAN.

Can I change the tenant to another tenant during the tenancy?

If the tenant listed has been entered in error and simply needs corrected to the actual tenant on the tenancy agreement, we will contact the listed tenant to ask them to confirm they have no claim to the deposit. We can then update the deposit account so that the correct tenant is listed.

If there is more than one tenant currently listed on the deposit account, and one tenant is moving out to be replaced by a new tenant, you can use our tenant changeover function.

If there is only one tenant listed on the deposit account, and they are being replaced by a new tenant, a Proposal for Deposit Repayment must be entered to close the deposit account. You can then create a new deposit account for the new tenant.

Can I request the deposit back during the tenancy for costs incurred by the tenant (e.g. rent arrears, damage, etc.)?

We do not recommend that a Proposal for Deposit Repayment is entered before the tenancy has come to an end. If the deposit has already been paid out, there is no protection for the landlord or letting agent when the tenancy comes to an end if the tenant has broken any terms in their tenancy agreement.

The tenant has entered a Proposal for Deposit Repayment but the tenancy hasn't ended. What can I do?

When you log in to your user account to respond to the Proposal for Deposit Repayment, you will be asked to confirm the tenancy end date. If you confirm that the tenancy is still ongoing, by entering a tenancy end date in the future, the tenant's Proposal for Deposit Repayment will be cancelled, and the tenant will be unable to enter another Proposal for Deposit Repayment until that date.

What happens if a tenant passes away during the tenancy?

The landlord or letting agent should contact us as soon as possible to provide the name and contact details for the person who is acting on behalf of the tenant. We will contact the tenant's representative to ask for a copy of the death certificate and to ask for confirmation that they are acting on behalf of the tenant. We can then add the representative to the deposit account and they can participate in the repayment process on behalf of the tenant. We are happy to provide assistant or complete the repayment process on behalf of the tenant's representative, if requested.

The tenant has moved out of the property before the tenancy end date. What should I do?

If a tenant leaves before the end of the fixed term, or without notice, the tenancy does not end. Rather, it continues until either the expiration of the notice period, or the end of the fixed term, unless the landlord agrees to a surrender. Usually the landlord will try to find a new tenant to take on the property but it is important that you take the correct steps in case you are required to substantiate any claim for unpaid rent, re-advertising the property, etc., if the tenant disputes your claim during the repayment process.

The tenant should be made aware of the costs they will be asked to meet in return for ceasing to pay rent. These should be set out in as much detail as possible so the tenant can make a properly informed decision.

Please remember that the landlord's actions may result in the tenancy being regarded as at an end earlier than intended. If the parties have agreed on an end date, the landlord should wait until that point before conducting a check-out, even if the tenant has already left. Conducting a check-out in advance of the agreed end date may imply acceptance of an earlier surrender. A Proposal for Deposit Repayment should only be made through SafeDeposits Scotland once the tenancy has come to an end as a proposal cannot claim for any future liability (e.g. for rent arrears for a period in the future).

We have an adjudication digest on our website which covers a real dispute over a tenant moving out before the tenancy end date, including the evidence provided by both parties and the adjudicator's decision.

The deposit repayment process

How is the deposit repaid at the end of the tenancy?

When the tenancy comes to an end, the landlord (or the letting agent, if there is one) should discuss the deposit repayment with the tenant, to reach an agreement on how the deposit should be repaid. Either the landlord, letting agent or the lead tenant can then log in to their SafeDeposits Scotland user account and enter a Proposal for Deposit Repayment which breaks down how the deposit should be repaid (i.e. if the full amount should be repaid to the tenant, or if any should be repaid to the landlord or letting agent). We will send a copy of the proposal to the other party to ask if they agree or disagree and to ask for their repayment details (if necessary).

If both parties are in agreement, we will process the repayment as agreed within 5 working days of receiving agreement. If there is a dispute over any deductions to the deposit, the dispute can be referred to our alternative dispute resolution (ADR) process.

The deposit repayment process does not start automatically - either the landlord, letting agent or lead tenant must enter a Proposal for Deposit Repayment to confirm the tenancy has come to an end.

How long does the deposit repayment process take?

When either the landlord, letting agent or lead tenant enters a Proposal for Deposit Repayment, the other party has 30 working days to respond to agree or disagree. The 30 working day period is set by the Tenancy Deposit Schemes (Scotland) Regulations 2011.

If both parties are in agreement, the deposit will be repaid within 5 working days of agreement.

The deposit repayment process will be much faster were all parties participate and the Proposal for Deposit Repayment is entered and responded to as soon as poossible.

What happens if I agree to the Proposal for Deposit Repayment entered by the other party?

If you log in and agree to the Proposal for Deposit Repayment entered by the other party, an automatic notification will be sent to the other party to let them know you have agreed. The deposit will then be repaid as agreed within 5 working days.

What happens if I don't agree with the Proposal for Deposit Repayment entered by the tenant?

If you don't agree with the Proposal for Deposit Repayment entered by the tenant, you can disagree and enter an alternative Proposal for Deposit Repayment through your user account. A copy of your alternative Proposal for Deposit Repayment will be sent to the tenant to ask if they agree or disagree. If the tenant agrees with your Proposal for Deposit Repayment, we will process the repayment as agreed within five working days. If the tenant disagrees with your Proposal for Deposit Repayment, they will have the option to refer the dispute to our alternative dispute resolution (ADR) process.

What happens if I don't respond to the Proposal for Deposit Repayment entered by the tenant?

If you don't respond to the Proposal for Deposit Repayment entered by the tenant within the allocated 30 working days, the deposit will automatically be repaid in full to the tenant.

The disputes process

What is the alternative dispute resolution (ADR) process?

If there is a dispute about how the deposit should be repaid, we provide an alternative dispute resolution (ADR) process to help decide how any disputed amount should be repaid. This is an alternative to the tenant taking legal action for recovery of a deposit through the court.

If a dispute is referred to ADR, we will invite the landlord or letting agent to submit evidence to substantiate their claim to the deposit. The tenant will then be invited to view any evidence submitted and provide a statement and any evidence which they may have in response. The submissions provided by both parties will be passed to an impartial adjudicator who will decide how any disputed amount should be awarded.

We have published further guidance on ADR, including what the process involves, how best to present your claim, and what type of evidence the adjudicator looks for, in the Guidance documents sections of our website.

How much does it cost to use the ADR process?

The ADR process is free to use for landlords, letting agents and tenants.

How long does the ADR process take?

The ADR process can take anywhere from eight to twelve weeks to be concluded. This depends on whether parties choose to use the maximum time allocated to them or if a party chooses to progress their stage early. For example, both the landlord and the tenant are allowed 10 working days to submit their evidence, but, if they submit their evidence before then, they can ask for this stage to be moved on earlier.

As the ADR process does take a considerable time, we ask that it is only used as a last resort. We find that most landlords and tenants can come to an agreement without the need for third party intervention.

Why does the landlord or letting agent have to submit their evidence first?

When a dispute is referred to ADR, an adjudicator's starting position mirrors that of the courts: the deposit is first and foremost the tenant's money, unless the landlord can justify their claim to it. The onus is therefore on the landlord to show why they are entitled to claim money from the deposit.

Will the adjudicator visit the property?

No. The adjudication process is not investigative. Adjudication is based on the evidence presented by the parties. We do not hold a hearing, interview either party or visit the tenancy property.

How do I claim for more than the deposit amount?

We are only able to award up to the amount of the disputed deposit. If the sum claimed is in excess of the deposit we will treat the claims in the order set out in the tenancy agreement, where this has been specified. We will indicate where we believe an award would be appropriate; and if so, how much, up to the extent of the disputed deposit. If the landlord wishes to pursue the tenant for additional sums, they will need to seek further advice on the action they could take.