Landlords and agents in Scotland are being warned that time is running out to protect tenancy deposits.
The deadline of November 13 requires all deposits received between March 7, 2011, and October 2 this year to be physically transferred to one of the approved custodial schemes – a move that could see a number of agents go to the wall.
Deposits received before March 7, 2011, where a tenancy has renewed or will renew on or after October 2 and before April 2 next year, must be transferred to a scheme within 30 days of renewal.
Landlords and agents who have accumulated interest on tenancy deposit money are being advised to give this to the tenant before transferring the deposit.
The new regime is causing anxiety, says SafeDeposits, a spin-off of the TDS. It is suggesting that landlords and agents simply protect all the deposits that they currently hold by November 13.
The impact of the new legislation is thought likely to be major, as its implementation is coinciding with a tightening of the law which bans agents and landlords from taking money off tenants unless it is either rent or deposits.
The explicit banning of fees comes about as a result of a Shelter campaign, which is also persuading tenants to reclaim money they have previously handed over.
Unlike in England and Wales, tenancy deposit money cannot be protected with insurance, but must be physically put into a custodial scheme.
It is widely predicted that the double whammy of the ban on fees and the need to hand over deposit money will see a number of agents go out of business by the end of this year.