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Tenancy Deposit Schemes, 18th October 2012 - Click for larger version Tenancy Deposit Schemes, 18th October 2012

Tenancy Deposit Schemes (TDS) became operational in Scotland from July of this year.

The Scheme aims to protect tenants by having their landlord lodge their lease deposit with an independent third party. The regulations name various providers of these Schemes. The landlord can decide which provider he will use.

From 2 October, any deposits taken by a landlord from a tenant in relation to a new private sector residential tenancy must be lodged with a TDS within 30 working days of the date of entry under the lease and be held for the duration of the lease.

In addition to the foregoing, the landlord must also advise the tenant regarding the deposit amount, the identity of the TDS provider and the circumstances narrated under the lease whereby the landlord may retain the deposit (eg. non payment of rent).

In respect of already existing tenancies, the deposit must also be transferred to the TDS within specified timeframes, which vary depending on when the deposit was taken. However, regardless of when the existing lease commenced, the deposit will have to be transferred to a TDS no later than 15 May 2013.

Where the landlord fails to comply with the regulations, they may suffer a financial penalty.

At the end of the lease, the landlord requests return of the deposit from the Scheme provider and specifies how much will be paid to the landlord and how much will be paid to the tenant. This requires to be agreed between the landlord and tenant. Where the parties cannot agree on this split, the TDS provides a dispute resolution service.

There is no charge to the landlord or tenant for using the TDS.

Last updated: 10.22am, Tuesday 23rd October 2012

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