By Mike Edwards

The Letting Protection Service Scotland the sister company to the Deposit Protection Service in England and Wales) has applied to run a tenancy protection scheme in Scotland. Though part of a tender process the DPS rightly emphasises it will be the only contender in Scotland to have had any experience of protecting deposits.

In its activities for England and Wales the DPS has protected more than 1.7 million to date, amounting to more than £1.3bn in value. Its application is fully expected to be approved and will trigger implementation of compulsory tenancy deposit protection in Scotland where, unlike England and Wales and argued by many very sensibly, insurance-backed schemes will not be authorised.

Instead, landlords and agents who take deposits must put the money in a banking or ‘custodial’ scheme and from the date the Scottish scheme launches from that date they will have 30 days (not the 14 as in England and Wales) to protect deposits for all new tenancies. Landlords holding deposits for existing tenancies will have nine months’ from the launch of the first scheme to protect their tenants’ deposits.

Under the Tenancy Deposit Schemes (Scotland) Regulations 2011, which came into force in March 2011, landlords and letting agents will have a duty to protect tenants’ deposits as soon as the first approved scheme launches. This is thought likely to be from April 2012 or if not soon after.     
               
There has been constant criticism of the English decision to allow three schemes, two of them insurance backed and in effect promoted by vested interests. In reality The Dispute Service in effect is for agents and Mydeposits.com is for Landlords enabling both to hold onto the deposit monies.

This was seen by many objective commentators as rather defeating the object of TDP which is to keep the tenant’s money – and all too often it is forgotten just whose money the deposit actually is – 100% safe and protected from abuse by others.

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