Tenancy deposit protection - not all landlords are compliant

It's fast approaching three years since the introduction of the tenancy deposit scheme (TDS), which, on the whole has been a success.

At first, there was a reticence from letting agents as they believed they would have no control of deposits on behalf of landlords. But it has given a greater degree of reassurance and protection as agents can successfully hold tenants to account for poorly maintained homes, whilst preventing unscrupulous landlords from making excessive claims.

However, the scheme needs to be regulated correctly and a greater awareness is definitely needed by landlords.

The recent court ruling, on the case of (tenant) Jenson v (landlord) Fappiano, is a stark reminder to landlords they need to keep up with legislation. According to the Judgment of Sheriff Welsh:

As part of the Tenancy Agreement the applicant paid a deposit of £1000 to the respondent. That money was not, as it should have been, under the Tenancy Deposit Schemes (Scotland) Regulations 2011, lodged in an approved scheme for safekeeping. Nor did the landlord comply with his duties under the regulations to supply certain prescribed information to the tenant relating to the safekeeping of the deposit, the status of the landlord as a registered landlord under the scheme and how any future disputes over the money could be resolved. This was all contrary to regulations 3 and 42. This failure by the landlord has triggered Regulation 9 which entitles the tenant to make an application to the sheriff for an award of an amount of money as a sanction against the landlord for his failure to comply with his duty. Put shortly, I am asked to decide in terms of regulation 10 how much, if at all, the landlord must pay the tenant, by way of sanction, for his non compliance.

While the Sheriff has discretion to take mitigating factors into account when deciding an appropriate award for non-compliance, ignorance of the Regulations or the status of an amateur landlord does not make a landlord exempt from compliance or from the resulting sanctions imposed. As a result, the landlord was ordered to pay the tenant £333.33 for non compliance.

What is worrying is that not every single private landlord in Scotland is registered under the Landlord Registration scheme, even though they are required to do so, and all I can say is that's an issue of ignorance or wanton disregard.

There desperately needs to be rigorous enforcement in place to ensure compliance. If not, rogue letting agents are going to carry on without facing penalties and poor practices will continue throughout the sector.

*Malcolm Cannon is the CEO of Braemore, Edinburgh's largest lettings and property management company.