In 2012, the world of Tenants’ deposits changed forever. There was a time when tenants moved into their new place, the landlord would take their deposit and hold onto it until the tenant moved out again. Of course, as anyone who’s ever dealt with the end of a tenancy can testify to, things didn’t always run smoothly. It was a rare occurrence for tenant and landlord to come to an agreement over things like cleanliness for example. Ultimately, the landlord had the final say on what happened to the deposit and if the tenant didn’t like it, they would need to seek legal advice with a trip to the small claims court the final destination.
Times have changed though and, by-and-large, they’ve changed for the better. How, I hear you ask? In quite a few ways, is the answer. Here are a few ways where things have changed:
- Perception! It’s the tenant’s deposit, not the landlords. In actual fact, this has always been the case. However, the perception was different. Tenants gave the deposit to their landlord in case there were issues at the end of the tenancy. It follows that the landlord could use it how they saw fit then… Those days are definitely over. ALL deposits must be lodged with a third party scheme (Mavor & Company has used Safe Deposits Scotland since 2012). Landlords can’t keep the deposit beyond thirty days.
- Adjudication. What happens if the tenant doesn’t agree with the landlord that their deposit needs to be used? Landlords can no longer make the decision on what happens with the deposit. It’s not their money, it’s their tenants. So, they need to make a claim on the deposit and be able to argue why they’re doing so. If no agreement can be met, the dispute can go to an independent adjudicator who’ll decide if the landlord’s claim is fair or not. This leads us nicely to the next point…
- Proof. If the landlord wants to claim on the tenant’s deposit, they’re going to need to prove why. It’s not enough to say ‘The flat was filthy.’, they need to show the adjudicator that it wasn’t filthy when the tenant moved in. Mavor & Co encourage all landlords to have a written inventory, with dated photographs, carried out at the start of the inventory. A check-out report, again with dated photographs at the end of the tenancy is also crucial. Photographs, or videos, aren’t enough in themselves. The written word is King, so always, always, always get an inventory carried out!
- Decision time. Once the Adjudicator has made their decision, it won’t be reviewed unless there’s been an error in material fact i.e. they’ve misread a piece of the evidence. While, it’s all very final and one party is likely to be disappointed, it does bring the issue to a head rather than have it drag on.
- Don’t comply and face the consequences! ‘What happens if I just hold onto the deposit?’. It’s a question we’ve been asked several times over the past four years. Aside from the fact that it’s illegal to hold onto the tenant’s deposit, there is the possibility that tenants can take their landlord to court for non-compliance. There have been a few cases where landlords have faced the ultimate possible penalty: They’ve had to pay their tenant three times the amount of the deposit.
Mavor & Company cannot stress highly enough how important it is to make sure that Landlords lodge their tenant’s deposit with a third party scheme. There is absolutely no benefit to holding onto it; only costly downsides.
It is a major part of the tenancy process, and having processed hundreds of deposits and disagreements, we’re very confident that we can offer sound advice on this. Whether you’re a landlord, or a tenant, the Mavor Property Help Centre is your one-stop drop in centre for great advice!