LANDLORDS in Fife are being urged to ensure they are well prepared for the introduction of the Tenancy Deposit Scheme.
The scheme launches on July 2 when deposits must be passed on to an independent third party which will hold them until they are due to be repaid.
The regulations have been created to safeguard the deposits of tenants. They were introduced in response to cases where deposits were unfairly withheld by a landlord at the end of a tenancy or where letting agents had gone bust and deposits had been lost.
Myra Blake, letting manager at Martin & Co in Kirkcaldy, welcomed the introduction of the scheme - particularly a dispute resolution service aimed at addressing the issue of unfair withholding of deposits at the end of a tenancy - but believed it could cause problems for some landlords.
She said: “Agents don’t benefit from deposits but they can spend huge amounts of time trying to resolve disputes between landlords and tenants.
“We don’t come up against it much but even one dispute can be extremely time consuming. Once the scheme comes in, it will be up to the resolution service to settle any dispute.”
When the scheme comes into force, all deposits collected by landlords since March 2011 will have to be paid to the independent third party, and Myra believes that could cause financial difficulties for some.
While many agents and landlords maintain deposits in separate accounts, there are some who use deposits as working capital, and won’t have the money available to hand over.
“There will be landlords who are not keen on this scheme and some who are unhappy at the suggestion they can’t be trusted,” said Myra.
“The scheme is very much geared towards the tenants and giving them the security of knowing their deposit is safe.”
Iona Grieve, rental manager at Delmor Estate Agents, stressed the importance of landlords and their agents ensuring checklists and statements of condition were up to date and accurate to help with the settlement of any disputes.
“If there is a dispute the landlord will have to provide evidence to the third party, such as submitting photographs,” she explained.
“For example, marks on carpets can be a problem, so if a landlord can submit a photograph showing a carpet wasn’t stained before the tenant moved in, that would help resolve the issue.
“It’s important to keep accurate and up-to-date records and information.”
She agreed the scheme was a good idea, adding, “It’s clearly being brought in as some landlords seem to have got a reputation for failing to return deposits.
“It will provide greater protection for tenants.”