‘Unscrupulous and exploitative’ landlords are ignoring a new law which requires them to register and protect their tenants’ deposits. This is according to a motion being debated at the Scottish Parliament today, in response to a campaign by the Scottish CAB service.
The new Tenancy Deposit Scheme legally requires all private landlords to register their deposits, in order to ensure the tenants get the deposit back at the end of the tenancy. But last week it was revealed that only 50% of deposits had been registered under the scheme, and many landlords are still refusing to give tenants their deposit back without adequate reason.
Last month Glasgow Central CAB ran a campaign to highlight the issue, which prompted Green MSP Patrick Harvie to lodge the motion (see below), which is being debated today. Citizens Advice Scotland have published a briefing for the debate, which outlines the scale of the problem across Scotland. The key points in the briefing are:
- The private rented housing sector represents just 11% of all housing in Scotland, but accounts for 27% of all housing enquiries to Scottish Citizens Advice Bureaux.
- 14% of all private rented housing enquiries brought to the CAB are about deposits.
- In 2011 the Scottish government introduced the Tenancy Deposits Scheme, which requires all private landlords to register their deposits with a third party, who would then decide at the end of the tenancy whether the tenant should get it back.
- Last week it was revealed that 50% of deposits have not been registered. Meanwhile a survey by Safe Deposits Scotland has shown that 55% of tenants are unaware that their landlords are legally required to register deposits.
Ahead of today’s debate, Citizens Advice Scotland’s Head of Policy Susan McPhee says:
“Despite the new law, CAB advisers across Scotland continue to see many cases of people who have had their deposits unfairly with-held by landlords and letting agents. The excellent campaign run by Glasgow Central CAB last month has raised awareness of the issue, and we are very pleased to see MSPs debating it today. However this is not just an issue in Glasgow but across the whole of Scotland.
“The Tenancy Deposit Scheme was introduced in 2011 to address this problem, but still only half of deposits are being registered. In order to ensure that the new regulations do what they set out to achieve, there needs to be better enforcement and better support for tenants taking action on this issue. Hopefully today’s debate will focus attention on this issue, making landlords aware of their responsibilities and tenants aware of their rights.”
Citizens Advice Scotland have joined with the Scottish government and other agencies to create an information site for private sector tenants and landlords at: www.RentingScotland.org.
For more information, interviews etc, please contact Tony Hutson on 0131 550 1010 or 07774 751655.
Notes to editors - click to expand/collapse
Appendix A: Patrick Harvie’s Motion Being debated at Holyrood at 5pm today (Tuesday)
Motion S4M-06681: Patrick Harvie, Glasgow, Scottish Green Party: Protecting Tenants' Deposits That the Parliament expresses deep concern for what it considers the many private sector tenants in Scotland who remain at risk of unfairly losing their rental deposits; notes reports in the Glasgow Evening Times that most private landlords in Scotland are not yet complying with the legal requirement to lodge their tenants’ deposits with an approved deposit scheme, despite the deadline for compliance having passed on 15 May 2013; further notes the concern expressed about this issue by the Glasgow Central Citizens’ Advice Bureau, which has been receiving new clients every day seeking help in recovering deposits and which has described the issue as the biggest facing young people in the city; would welcome an end to exploitative and unscrupulous practices in the private rented sector and believes that this is vital if tenants are to have confidence in taking on tenancies, and considers that the forthcoming housing bill provides the opportunity for measures, including the regulation of letting agents, that will safeguard the interests of tenants.
Appendix B: The CAS briefing, sent to all MSPs ahead of the debate.
Protecting Tenants’ Deposits: A briefing from Citizens Advice Scotland
04 June 2013
In 2012/13, enquiries about private rented housing made up 27% of all housing-related enquiries in citizen advice bureaux across Scotland. Although the private rented sector is growing, it still only makes up 11% of the total housing sector. This shows that advice need is disproportionately high for the private sector compared with social rented housing.
Of all the issues brought to Scottish CAB offices about private sector housing, 14% were about deposits. Deposits were also the fourth biggest consumer issue brought to the service during 2012/13. Rapid turnover of tenancies and landlords unfairly withholding deposits combine to mean that a tenant can lose hundreds of pounds over a period of two or three years.
Case evidence from CAB offices across Scotland shows that many tenants still have their deposits withheld unfairly, particularly in major cities like Glasgow, Edinburgh and Aberdeen.
An East of Scotland CAB reports of a client who is having difficulty in getting back a £425 deposit from previous landlord who states he is experiencing “financial difficulties.” He has continually made promises about returning the money but as yet has not kept any of these. The client is unemployed and her husband is on minimum wage. The prospect of having to use the Small Claims Court to recover the deposit is daunting and upsetting for them.
A West of Scotland CAB moved out of his flat but the landlord has not returned the deposit, despite the client asking for it several times. The landlord told the client that he could not pay back the deposit until he finds someone else for the room as he has no money. It states in the lease that the landlord would return the deposit 14 days after end of tenancy and says nothing about finding a replacement tenant. The CAB adviser found that the landlord was not registered and had not used the Tenancy Deposit Scheme.
Tenancy deposit scheme
The Scottish Government’s Tenancy Deposit Scheme requires landlords to register deposits in one of three approved schemes. However, statistics from Safe Deposit Scotland show that in May 2013, just 50% of deposits had been registered.
Tenants are expected to take action if landlords have not registered their deposit in one of the compulsory schemes, but a survey carried out in January by Safe Deposit Scotland showed that 55% of tenants were unaware that their landlord was required by law to safely secure their deposits.
The first cases in which a client has taken a landlord to court over non-registration of a deposit will be heard in June 2013, but Citizens Advice Scotland is concerned that tenants often do not have the knowledge of their rights or the confidence to take landlords to court. If tenants are the ones responsible for ensuring landlords are complying with the legislation by taking legal action, this places a burden on advice and legal aid services to help tenants through this process. In addition, many tenants will not be eligible for legal aid, meaning they face the financial implications of legal action.
A potential solution to the difficulty facing tenants in accessing justice is the introduction of alternative dispute resolution. Introducing a new Housing Panel, for example, could help resolve issues between tenants and landlords before they reach the court. Whatever form this new housing body takes, the approach will need to be holistic and sensitive to the differences between tenants in social and private rented housing.
Helping tenants to know their rights
Holding landlords and letting agents to account relies on well-informed tenants. The Scottish Government has taken steps toward ensuring that all tenants in Scotland know their rights by introducing a new Tenants’ Information Pack which landlords and letting agents are required by law to present to tenants at the beginning of their tenancy.
To support the introduction of the Tenants Information Pack, Shelter Scotland, Citizens Advice Scotland and others have come together to provide information to tenants and landlords on a new website: www.RentingScotland.org.
Citizens advice bureaux across Scotland continue to see many clients who have their deposits unfairly withheld by landlords and letting agents. The Tenancy Deposit Scheme was introduced in 2011 to address this problem, but still only half of deposits are being registered. In order to ensure that the new regulations do what they set out to achieve, there needs to be better enforcement and better support for tenants taking action on this issue.