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Safe Deposit Scheme

What is the tenancy deposit scheme?

The tenancy deposit scheme is provided by an independent third party to protect tenants' deposits until they are due to be repaid.

As a landlord who receives a deposit from your tenants you need to:

  1. pay deposits to an approved tenancy deposit scheme
  2. provide the tenant with key information about the tenancy and deposit

Connect Property Management uses Safe Deposit Scotland.

Which Tenancies does SafeDeposits cover?

SafeDeposits covers those tenancies to which the landlord registration provisions in the Antisocial Behaviour etc. (Scotland) Act 2004 apply. Therefore, if a landlord is required to register with a local authority, and takes a deposit from their tenant, that landlord must also comply with the Tenancy Deposit Regulations.

This includes landlords of assured and short assured tenancies, university accommodation, as well as various other types of occupancy arrangement.

Landlords of the following types of property are not required to register and so will not have to comply with the Tenancy Deposit Regulations: 

  • Lets to family members
  • Life rents
  • Houses for holiday use
  • Properties used by religious orders and organisations
  • Accommodation with care
  • Houses subject to control orders
  • Agricultural and crofting tenancies
  • Resident landlords
  • Transitory ownership (executors, heritable creditors, and insolvency practitioners)

Landlords who live overseas and take a deposit, and who are not otherwise exempt, must comply with the Tenancy Deposit Regulations.

It does not matter if a third party (e.g. a guarantor) pays the deposit. Unless a landlord is exempt from complying with the Tenancy Deposit Regulations, the deposit must be submitted to an approved scheme.

The SafeDeposits scheme and the Tenancy Deposit Regulations do not apply to tenancies outside Scotland.

SafeDeposits may on request of both parties accept the registration of deposits paid in connection with the occupancy of any living accommodation in the PRS which is not a relevant tenancy.

This document sets out the SafeDeposits Tenancy Deposit Scheme Rules. This document does not apply to any other schemes which have been authorised for the protection of deposits.

What is a Tenancy Deposit?

A tenancy deposit is a sum of money which a landlord requires a tenant to pay at the start of the tenancy, and which will normally be returned to the tenant at the end of the tenancy. The money is security against the tenant not meeting their obligations in connection with a tenancy or occupancy arrangement. In certain circumstances a landlord may want to use some or all of the deposit at the end of the tenancy, for example:

  • to pay for damage a tenant may have caused to the property
  • to pay cleaning bills if the property has been left in poor condition
  • to pay bills that are left unpaid, for example fuel or telephone bills
  • to cover any unpaid rent

A written guarantee, as often used by Deposit Guarantee Schemes, is not a sum of money and as such is not covered by Tenancy Deposit Regulations.

The Housing (Scotland) Act 2006 and the Tenancy Deposit Schemes (Scotland) Regulations 2011.

Landlords in Scotland who are required to register as landlords with their relevant local authority, and who take a deposit from their tenant, must not hold the money themselves. They must:

  • pay the deposit to an approved tenancy deposit scheme (such as SafeDeposits) within a specified timescale
  • ensure that the deposit is held by the scheme throughout the tenancy
  • give details about whether the landlord is registered, or has applied to be registered, with the local authority when the deposit is paid over
  • within a specified timescale, provide the tenant(s) with information about:
  • the tenancy
  • the deposit
  • the scheme that will be protecting it
  • the circumstances in which the landlord can make a claim on the deposit at the end of the tenancy, with reference to the terms of the tenancy agreement

Any deposit accepted by a landlord on or after 2nd October 2012 must be deposited with an approved scheme within 30 working days of a tenancy starting. If the landlord held deposits before this date, the landlord must still protect them, but will be allowed more time to submit them to an approved scheme. For more information see our guidance document "When to comply".

It is a legal requirement for most landlords to register with the relevant local authority. SafeDeposits will collect information about that registration. This information will be referred to relevant local authorities to assist in the identification of unregistered landlords. Licencing authorities will be able to take appropriate action where they think it is necessary.

As the person who takes a deposit, it is ultimately the landlord’s responsibility to ensure that the duties in relation to deposits are complied with. This does not mean that a landlord cannot use an agent to act on their behalf. However, landlords using agents should satisfy themselves that they are acting in accordance with the regulations, depending on what they are contracted to do. Any sanctions imposed for non-compliance with the regulations apply to the landlord.

A summary of how SafeDeposits works.

A landlord who wants to use SafeDeposits to protect a tenant’s deposit must pay it to the scheme within the timescales specified above in order to safeguard it. The landlord must also give information about their registration with the local authority when the deposit is paid over to the scheme.

At the same time the landlord must ensure that certain information is given to the tenant, including details about the amount of the deposit and the scheme where it is held.

The time limits are important because if a deposit is not paid to an approved scheme within the required timescale, or the required information is not given, the tenant may apply to the court for sanctions against the landlord.

SafeDeposits will accept payment of deposits by bank transfer, cheque, or debit card, and payments can be made online, by telephone, or by post.   

When SafeDeposits has received payment of a deposit successfully registered with the scheme, we will:

  • pay it into a designated account maintained for the sole purpose of securing tenancy deposits
  • write to the tenant and landlord to confirm that this has happened
  • provide the tenant and landlord with the information required by the regulations. We will provide this information in the form of a Tenancy Deposit Certificate

Landlords are always responsible for providing their tenants with information about when all or part of their deposit may be retained at the end of their tenancy. Landlords must ensure that this is clearly explained with reference to the terms of the tenancy agreement.

Notwithstanding the Tenancy Deposit Certificate produced by SafeDeposits, landlords must make their own arrangements to ensure that their tenants receive the information to which they are entitled, in order to avoid the statutory penalties for a failure to do so. For the avoidance of doubt the scheme accepts no liability for a landlord’s failure to provide a tenant with any of the information required by the Regulations.

Where there is more than one landlord to a tenancy agreement, the landlord is responsible for appointing a designated landlord for any application to this scheme. The designated landlord must be authorised to act on behalf of, and represent, all joint landlords to a tenancy agreement.

Where a tenancy involves more than one tenant the landlord will be asked to nominate one of the tenants as the lead tenant, to act on behalf if all joint tenants when:

  • dealing with the protection of the deposit
  • the claim for its repayment at the end of the tenancy
  • any dispute over the deposit's return

When your landlord transfers your deposit to SafeDeposits, we will send a Deposit Protection Certificate to all joint tenants on the tenancy agreement, which will show the names of all joint tenants, as well as highlighting who the lead tenant is.

When the tenancy ends, the tenant and landlord can submit a Proposal for Deposit Repayment to SafeDeposits stating:

  • the amount of the deposit which they have agreed can be paid to the tenant and/or landlord
  • the amount of the deposit which is in dispute

SafeDeposits will write to the landlord or tenant as appropriate, asking them to confirm whether they agree with the Proposal for Deposit Repayment, or wish to dispute the amount. Where the landlord and tenant agree how all or part of the deposit is to be repaid, it will be paid out within 5 working days of SafeDeposits receiving confirmation of the agreement between the parties. The return of the deposit will take longer where the amount is disputed, or the landlord or tenant cannot be contacted, or do not co-operate.

Any dispute regarding the repayment of all or part of the deposit will be dealt with in accordance with these scheme rules unless SafeDeposits is notified otherwise in writing.

The deposit remains in the SafeDeposits account until it is repaid in accordance with the SafeDeposits scheme rules and the requirements of the Tenancy Deposit Schemes (Scotland) Regulations 2011.

SafeDeposits ensures that:

  • Deposits are safeguarded throughout the tenancy
  • Deposits are not unfairly withheld
  • Tenants and landlords receive the amount they are entitled to from the deposit
  • Disputes between tenants and landlords are resolved quickly and impartially

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