Tough crackdown launched on landlords who ‘exploit trusting tenants’

Landlord crackdown: Scottish Government taking action to prevent exploitation of tenents.

Exploitative landlords who wrongfully withhold millions of pounds each year will soon be forced to surrender tenants' deposits to a third-party.

Two Scottish Government-approved tenancy deposit schemes have been established to safeguard tenants’ money.

Housing minister Keith Brown said that rogue landlords who withhold cash on spurious grounds tarnish the image of the private rented sector and exploit trusting tenants.

An estimated 11,000 tenants have £3.6m wrongly withheld each year, an average of £327 each.

Deposits amount to more than £74m in the majority of the 273,000 households that make up the private rented sector in Scotland.

Mr Brown said: "It's important to stress that the majority of landlords act responsibly. These schemes are aimed at those who tarnish the image of the private rented sector and exploit trusting tenants.

"This Government is committed to taking action to ensure tenants receive a fair deal, it's not right that up to 11,000 tenants annually have £3.6m of their deposits wrongly withheld. From July 2, the new regulations will allow a new cost-effective approach to safeguarding tenancy deposits, protecting tenants and landlords."

SafeDeposits Scotland and Mydeposits Scotland will take deposits from landlords or their agents for safekeeping and provide key information about the tenancy, the deposit and the scheme to the tenant.

It will be free for landlords and letting agents, and will offer an independent dispute resolution service to deal with legitimate disagreements over deposit returns as a quicker and cheaper alternative to taking legal action.

The first tenancy deposit scheme - administered by Letting Protection Service - was approved by ministers in April.

All three schemes will operate across Scotland from July 2, when the legal requirement to submit deposits into a scheme will begin.

In order to provide landlords with time to prepare, the first category of deposits to be paid into the schemes will be from November 2012.

Shelter Scotland director Graeme Brown said: "Monday July 2 starts the clock ticking towards the point when all tenants' deposits will be protected by law in Scotland. This means that, finally, the unfair withholding of millions of pounds from deposits by landlords and agents will be a thing of the past, as will the hardship it causes to tenants.

"The introduction of a compulsory scheme to safeguard deposits is a step in the right direction towards protecting tenants, landlords and agents. We hope the tenancy deposit scheme achieves a transparent and fair system for all."

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