Should a landlord fail to protect deposits and/or provide information in accordance with the Regulations, tenants can apply to the First-tier Tribunal for Scotland (Housing and Property Chamber) for sanctions against the landlord. If the First-tier Tribunal is satisfied that the landlord has failed to comply with the Regulations, they may 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 First-tier Tribunal for sanctions against the landlord.

The regulations are retrospective, which means that they apply to all tenancy deposits in Scotland, including those taken before the Regulations were introduced. The transfer of deposits was phased in after the launch of the schemes, but since 15th May 2013, all deposits in Scotland must be held in a tenancy deposit scheme.

The duties in relation to tenancy deposits apply to landlords, as the person requiring the deposit. This does not mean that the landlord cannot employ an agent to act on their behalf to manage a tenancy. However, 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 imposed for non-compliance will apply to the landlord, even if a letting agent has been involved.

When we receive the payment, a Deposit Protection Certificate will be sent to the landlord, tenant and letting agent, if there is one. The certificate is a confirmation that the deposit is held by SafeDeposits and also confirms the details provided by the landlord or letting agent. If any information on the Deposit Protection Certificate is incorrect, please let SafeDeposits know as soon as possible.

At the end of the tenancy, the landlord, or agent acting on their behalf, and the tenant must contact SafeDeposits to confirm how the deposit should be repaid (i.e. if the full amount should be repaid to the tenant, or if any should be paid to the landlord). The deposit cannot be released until we have received confirmation from both parties that they agree on how the deposit is to be repaid. The repayment process is explained step-by-step in our 'How to submit a repayment proposal' guidance document.

If the landlord and tenant are unable to reach an agreement on how the deposit should be repaid, the dispute can be referred to the SafeDeposits alternative dispute resolution (ADR) process. While ADR is requested in a minority of cases, we do recommend that landlords, letting agents and tenants familiarise themselves with our Disputes guidance, which explains how the ADR process works and the type of evidence we look for.

Introducing SDS Resolve

Introduced in August 2020, initially as part of helping tenants and landlords who have experienced problems with rent arrears under lockdown, SDS Resolve is a new service from SafeDeposits that has now expanded to offer mediation and conciliation on a number of tenancy related issues. As with all services provided by SafeDeposits, SDS Resolve is completely free to use.

SDS Resolve can deal with disputes relating to: property standards; repairs; entry rights; rent arrears; threatened evictions; breach of tenancy terms; and noise/anti-social behaviour (except serious anti-social activity). The aim of SDS Resolution is to facilitate a satisfactory resolution between landlords and tenants to help sustain tenancies and avoid the need for formal legal action.

SDS Resolve is endorsed by the Scottish Association of Landlords (SAL). Visit the SDS Resolve website for further information and steps to begin a resolution referral.