Jeff Salway: Tenants should have more protection

More needs to be done to protect tenants from rogue landlords. Picture: TSPL

Experts and tenant groups today call for tighter regulation to ensure that the good work of the large majority of landlords in Scotland isn’t undone by an unscrupulous minority.

The warning comes two years after the launch of the first Scottish tenancy deposit scheme (TDS).

Under the legislation, designed to prevent disputes over withheld deposits, landlords and letting agents must pay tenant deposits into an approved third-party scheme.

They must also give tenants written confirmation of the amount paid and details of the scheme holding their deposit, which is held in a designated account throughout the tenancy. Disputes over deposits can be taken to a free independent mediation service.

A survey by the Scottish Association of Landlords (SAL) found widespread satisfaction with the scheme, while letting agents north of the Border have cautiously hailed it as a success.

David Alexander, managing director of letting agency DJ Alexander, said: “When the scheme was first mooted I was a bit suspicious that this might be just another piece of legislation to burden the rental market. In fact it has worked really well, indeed much better than expected.”

The good news for tenants is that sheriff courts have been cracking down on those who have failed to protect deposits, said Eddie Hooker, chief executive of mydeposits Scotland.

“This gives a clear message to landlords that noncompliance is unacceptable,” he added.

“Our most recent research of tenant behaviour shows that around three- quarters of tenants say they are confident in dealing with their landlord or agent over their deposit and more than seven in ten say they haven’t experienced any issues with their landlord or agent over the deposit so far.”

Similar findings emerged from the SAL survey for The Scotsman. Where the dispute resolution service is used it usually finds in favour of tenants, the survey reveals. It found that 57 per cent of landlords have had some or all of their proposed deductions declined by independent adjudicators.

But there are lingering concerns over the tactics used by some letting agents and landlords to avoid using the scheme. A number of Scotland’s biggest letting agents have replaced deposits with non-refundable “cleaning fees”, meaning they don’t have to register the tenant’s upfront payment. The result is that many tenants remain unprotected by the TDS.

However, the vast majority of landlords still take deposits – just 11 per cent no longer do so, according to the SAL research. Of that 11 per cent, just a third are now charging higher rents instead.

More than eight in 10 say they are  no more or less likely to withhold some of a tenant’s deposit than they would have been prior to the scheme taking effect.

But figures from Citizens Advice Scotland paint a different picture. Its bureaux saw an increase of a third extra issues on tenancy deposits in 2013-2014, compared with the previous year. It also reported that awareness of the scheme remains patchy among both landlords and tenants.

Fraser Sutherland, policy officer at Citizens Advice Scotland, said: “Our  evidence shows that robust rules and regulations must be rigorously enforced to protect people living in private rental properties, as some rogue landlords  continue to blight the lives of their  tenants.”

While the TDS has provided “real benefits” to tenants, said Alyson Macdonald, of the Edinburgh Private Tenants Action Group, some have also been left waiting for months for the return of their deposits, she added.

“It can also be difficult to enforce because landlords who fail to register their deposits can only be penalised if their tenants take them to court,” she said.

“This means that justice is only available to those tenants who have the resources –time, money, language skills and confidence – to initiate the proceeding and see it through.”