Tenancy Deposit Scheme

As many of you may have heard the new Tenancy Deposit Scheme is now legislation in Scotland however there is currently no provider and as such means in effect no change for landlords at present. The Scottish government hope to appoint a provider in the next 9 months therefore we need to be prepared for the change.

What is the TDS?

• All landlords (or agent) will be required to transfer a tenants deposit to the provider for the duration of the tenancy.
• Upon lease end the landlord (or agent) will have to request return of deposit to tenant with whatever deductions have been agreed.
• This means all deductions must be agreed before works are instructed – if a tenant disagrees with a deduction he may request intervention from the scheme provider who will take an independent view on what is “fair”

What does this mean in practise?

We can only assume this is going to mean more deposit disputes as, from a tenant point of view, they have nothing to lose by disputing a deduction. The scheme will be “self financed” (from interest generated by the provider) and tenants will never have to bear any cost.

It will mean that if a tenant disputes a deduction the works will have to be financed by the landlord until agreement can be made ( for example if a tenant disputes that a clean is required we cannot use the tenants deposit to pay for the works until the adjudicator agrees (may take up to 20 days) which could mean a delay in new tenant moving in if landlord is not in a position to fund these works in the interim)

It will mean inventories are more important than ever before and must be full and up to date – the inventory will be key to keeping disputes to a minimum. The more evidence we have of how the property was before the tenant moved in the less disputes we see arising. Photographic evidence will also be vital.

We will be issuing more information as we discuss how we will tackle the new legislation however for now we must be aware of how important a complete, detailed and up to date inventory is for our landlords in keeping potential disputes to a minimum.

Please be aware this is only for your information and at present there is no action required by our landlords.

Thinking of Selling?

Many of you may be thinking about selling but are understandably cautious about the state of the market. We have seen some signs of the market starting to improve – more enquiries coupled with more stock. The recent budget announcement aimed at helping first time buyers should help stimulate the market.

The “First Buy” scheme will be open to those with a household income of less than £60,000 a year who can put down a 5% deposit on a new home . Those who qualify will be eligible for a loan worth up to 20% of the value of the property, jointly funded by the government and house builders. The loan will be interest-free for five years and only be repayable when the house is sold.

We would hope this will stimulate the market however what we really need is banks offering more fair and reasonable mortgages to all. Recent announcements of some lenders returning to 90% mortgages will also help the first time buyers.

If you are considering selling your property please do let us know and we would be delighted to discuss our sales service which offers extremely competitive rates to current landlords.

Landlord Registration

If your landlord registration is up for renewal you now must renew this yourselves as agents are no longer able to do this on landlords behalf. You will be contacted at your home address when your registration is due for renewal. Please do not ignore these letters .If you have any queries please contact Sally/Laura at the office.