The Scottish Government has recently published some interesting statistics about tenancy deposits in Scotland in response to a Freedom of Information Request. The publication itself can be found here and provides data on all three of the approved tenancy deposit schemes, how many deposits they each hold and the value of same. The clear ‘winner’ it seems is SafeDeposits Scotland who held nearly double the number of deposits than the other two schemes combined and 68 percent of the total value of all deposits protected as at the date of the statistics (31 March 2024).
What do the statistics tell us about the number and value of the deposits protected?
The total number of deposits currently protected is 263,785. That in itself is not the most interesting statistic on its own, but what these statistics also state is the there was a total of 346,816 private rental properties registered via landlord registration as at 31 March 2024, meaning a difference of 83,031 between the number of tenancies held and the number of potential private lets.
What might explain this difference?
There is no analysis in the statistics provided, but there could be a number of reasons for the difference. This could be simply that some of the properties are currently being advertised for let, some may be let without a deposit or with some form of deposit replacement product, some may have been removed from private lets entirely and the landlord register has not been updated, but it is also likely that some deposits that have been taken by private landlords have simply not been protected.
Are deposits still not being protected?
As we have blogged before, outside eviction actions and related civil claims, the next biggest part of the First-tier Tribunal’s workload are claims made against landlords for failing to lodge deposits, which for the period to 31 March 2022 represented 9% of all applications made and even a cursory glance at the recent decisions on the Tribunal’s website shows that there is still a significant number of such applications being made and penalties being imposed on private landlords.
What are the penalties being imposed on landlords?
In terms of the Tenancy Deposit Schemes (Scotland) Regulations 2011 (as amended), if a landlord does not pay a deposit into an approved scheme and issue the required prescribed information within 30 working days of the beginning of the tenancy (or if a deposit is paid by way of instalments and received after the start of the tenancy, within 30 working days of receipt), then the Tribunal can award a penalty against a landlord of up to three times the level of the deposit. Looking at the decisions made by the Tribunal, they often (but not always) do.
Summary
The deposit schemes have now been with us for more than a decade and yet there is a persistent and significant number of cases before the Tribunal where landlords have simply failed to protect deposits. Sometimes this will be by mere oversight, but there still appears to be a not insignificant minority of landlords who do not, as a matter of course, lodge and protect deposits as they should. What is true is that tenants are becoming more and more aware of the requirement to protect deposits and their rights around that, and it should be remembered that the deposit schemes themselves have a duty to inform tenants both when a deposit is lodged and when a tenancy ends, if the deposit has been lodged late and the potential for penalties being imposed. Beyond that, whilst the statistics are incomplete, it seems that landlords and tenants are making good use of the adjudication aspects of the schemes with 3,835 disputes being dealt with by SafeDeposits Scotland alone in the year up to 31 March 2024 or 10.5 adjudications every day of the year. If we had the figures for the other two schemes, this figure would undoubtedly be higher.
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