Move to stop landlords keeping cash

A new scheme will make it easier for tenants to get their deposits back from landlords.

The Scottish Government is considering two schemes where a third party holds the deposit and, at the end of a tenancy unless there is a dispute, pays it back immediately.

The new scheme, under the Housing Act, will mean landlords will no longer be able to withhold tenants' deposits, usually the equivalent of one month's rent, for spurious reasons.

The Evening Times has reported cases of tenants being left in financial difficulty after landlords refused to pay back their deposit.

Under the new plans deposits will not be held by the landlord, management company or letting agent and would instead be in a bank account managed by the new scheme.

The system will not require funding from tenants or landlords and will use interest accrued from the accounts to pay for the running costs.

If there is a dispute over the return of the deposit, it will be judged by the an independent adjudicator from the scheme.

John Blackwood, Director of the Scottish Association of Landlords said: "We want this to work for both tenants and landlords but have concerns about enforcement - we fear only good landlords will sign up."

When, as housing minister, Alex Neil proposed the changes to the legislation, he said: "When deposits are unfairly withheld, it can cause hardship and misery for the tenant and, in some cases, affect their ability to secure another tenancy.

"We will continue to work to put in place a practical rent deposit scheme that will offer real protection for tenants.

"The scheme will strengthen the reputation of the private rented sector in Scotland."

The consultation will run until 22nd January 2012.