An interesting news item caught our eye recently, with SafeDeposits Scotland – the Glasgow-based, government-approved tenancy deposit scheme – revealing that one Edinburgh tenant forget to claim back a cool £5,250 deposit.
Staff said it was their biggest ever ‘missing’ deposit case, with a year-long exercise carried out to track down the person in question.
The tenant, whose deposit and rent had been paid by their employer, left the rental property in Edinburgh in spring 2016 but left the deposit money unclaimed for well over 12 months.
SafeDeposits Scotland, the largest tenancy deposit scheme in Scotland, holding nearly 60% of the country’s private rental deposits, tried in vain to reach the former tenant via email, text and telephone. Despite repeated attempts, success only came in April this year.
The company also says this story is only the tip of the iceberg with regards to unclaimed returns, with the firm currently holding £604,513.86 in unclaimed money from 2,440 deposits. In 2017 (as of March 29), the firm’s tenant team had identified 309 ‘missing’ tenants by phoning, emailing and texting them. A total of £120,238.77 in unclaimed money was returned to these tenants.
“We’ve been aware of this sizeable unclaimed deposit for over a year and it’s astonishing that such a large amount could go unnoticed for such a long time,” Victoria Nixon, Operations Manager of SafeDeposits Scotland, said of the unclaimed deposit story. “We’re relieved that it’s gone back to where it belongs.”
She urged companies who pay for rented accommodation on behalf of an employee to check that they have received the money that they are due. SafeDeposits Scotland are only able to contact the name on the lease – which in this case would have been the employee, not the employer – even if it’s not the leaseholder who has been responsible for paying the rent.
“We can’t automatically pay money back as by law tenancy deposit schemes do not hold bank details for tenants,” Nixon added.
As a landlord, it’s important that you have an awareness of deposits and what your obligations are when it comes to protecting them. It’s important that you work closely with your letting agent and tenants to ensure a tenant’s deposit is adequately protected. You may also need to remind a tenant of how exactly they claim back their deposit at the end of a tenancy. As the above figures state, some just aren’t clued-up enough and a large sum of unclaimed deposits is sitting around as a result.
In Scotland, you must arrange a deposit and first rental payment with a tenant before they move into your rental property. You must collect the tenancy deposit and then register it with a third party tenancy deposit scheme, which protects your tenant’s deposit until the time when it is due to be repaid.
Like in England and Wales, there are three separate schemes in Scotland where landlords can protect their tenants’ deposits. As well as SafeDeposits Scotland, there is also Letting Protection Service Scotland and my|deposits Scotland.
Registering deposits with one of these schemes must be done within 30 days of the start of a tenancy. What’s more, you must inform tenants which of the tenancy deposit schemes their deposit is in, as well as other information you are legally required to provide. If there are any disputes at the end of the tenancy (which, sadly, can sometimes be the case), having a tenant’s deposit in a protected scheme will help to sort out any issues or complications in a quicker, more efficient way.
If you fail to protect a tenant’s deposit and/or provide key information in accordance with the Tenancy Deposit Schemes (Scotland) Regulations 2011, you could face heavy financial sanctions.
It’s not something that can be swerved or avoided. It is a key part of any tenancy and good practice must be enforced at all times to avoid any problems at a later date. If your tenants are unaware of how to reclaim their deposits, you and your letting agent can work closely with them to ensure any confusion is quashed.
At Letting Solutions, West Lothian’s first dedicated lettings agency, we work closely with our landlord clients to ensure a tenancy is managed in the correct way from start to finish. We make sure to look after your rental property as if it was our own, tailoring our management packages to match our clients’ requirements.
As part of our services, we advise on safety issues and other regulatory requirements and deal with all security deposits and insurances, as well as preparing inventories, selecting tenants and providing gas, electrical and energy performance certificates.
During the tenancy itself, we manage rental payments, carry out repairs and maintenance on a landlord’s behalf and offer a 7 day/24 hour emergency service to cope with any eventuality. At the end of a tenancy, we carry out an exit inspection and report, work proactively to minimise void periods, negotiate on the return of deposits and bill settlements, and organise any repairs if need be.
In essence, we are there to take the hassle away from you, to allow you to get on with the job of letting properties out and achieving healthy rental yields along the way.
For more information about our services, and what exactly your deposit obligations are, please give us a call on 01506 496 006. To receive a free instant online valuation of your rental property, click here.