Inside Letting

Tenant deposit victory

Jane Rattray, Lindsays, writes for Inside Letting about recent cases, in relation to Tenancy Deposit Schemes (Scotland) Regulations 2011.

The Tenancy Deposit Schemes (Scotland) Regulations 2011 have had legal effect since 7 March 2011 and landlords should now be familiar with their duties under the Regulations. In summary, Regulation 3(1) provides that landlords must:

  • pay tenancy deposits into an approved scheme. All deposits received prior to the introduction of the Regulations should now be protected in a Tenancy Deposit Scheme. All tenancy deposits for new tenancies require to be paid into the relevant scheme within 30 working days of the beginning of the tenancy
  • provide tenant with the information in relation to tenancy deposits as prescribed by Regulation 42

The issue of tenancy deposits and penalties for failure to comply with the Regulations has been revisited in the recent case of Cooper v Marriott at Edinburgh Sheriff Court.  

The Facts

In Cooper, reported March 2016, the tenancy commenced on 15 June 2013 and continued until termination on 17 July 2015. A deposit of £550 was paid to the landlord but was never placed in an approved tenancy deposit scheme.  Mr Cooper raised a claim by way of Summary Application for payment of three times the tenancy deposit, being the maximum sanction for breach of Regulation 3(1) of the Tenancy Deposit Schemes (Scotland) Regulations 2011.

Sheriff Welsh found the landlord in breach of the Regulations and granted an order for payment of £1,050 representing approximately twice the tenancy deposit. 


Jane RattrayInterestingly, the Sheriff commented that “the regulations do not recognise the status of amateur landlord" and appeared to suggest that the courts should not treat ‘single property, buy to let landlords’ with greater leniency than commercial landlords.

This may signal a departure from the reasoning of Sheriff Welsh in his earlier reported decision, Jenson v Fappiano.                                                                                                                                                                                                                                              In Jenson, the Defender was a first time landlord. A deposit of £1,000 was paid to the landlord but this was not paid into an approved scheme until 27 January 2014 rather than August 2013 as required under the Regulations. The landlord admitted the breach, however, defended the action on the issue of quantum, submitting that he was a first time landlord and he had remedied the breach as soon as it became apparent. The landlord’s solicitor accordingly invited the Sheriff to exercise his discretion and award a token penalty of £1. In his decision of 28 January 2015, Sheriff Welsh accepted the defender was an ‘amateur landlord’ and awarded a modest penalty of £333.33 being one third of the original tenancy deposit.

The facts of this case should be distinguished from Cooper, as the landlord in Jenson rectified his breach as soon as he became aware of it and placed the deposit in an approved scheme, albeit late. This is likely to have had a bearing on the Sheriff’s decision when considering the extent of the breach and the monetary sum to be awarded to the tenant.

However, the recent decision in Cooper could suggest that the Courts are now reverting to a robust approach towards the Regulations as seen in the earliest reported cases. In Fraser v Meehan (2013) and Tenzin v Russell (2014), both landlords were ordered to pay their tenants three times their respective deposits for failure to place the deposit in an approved scheme and provide their tenants with the prescribed information.    

In summary, all of the above cases demonstrate that there is probably no defence to a landlord’s failure to place a deposit in an approved Tenancy Deposit Scheme. The situation is easily avoidable by paying the deposit into a registered Scheme and providing the prescribed information.

Scope of the duties

Until recently, it was widely understood that the duties under the Regulations lay predominantly with landlords, not their agents. However, in a recent case at Kilmarnock Sheriff Court, a letting agent in Largs was successfully prosecuted and fined for failure to secure deposits held on behalf of tenants.

Colvin Houston Ltd was fined £500 for failure to place two tenancy deposits, amounting to £925, in an approved scheme. Interestingly, the action was raised by North Ayrshire Council’s Trading Standards Team and framed under the Consumer Protection from Unfair Trading Regulations 2008 as opposed to a Summary Application by a tenant under the Tenancy Deposit Regulations. Nonetheless, this represents a strong legal precedent and letting agents should exercise diligence when confirming obligations under an agency agreement. Agents should consider refining their terms of business to specify exactly what services they will execute on behalf of the landlord in respect of tenancy deposits, what costs (if any) there will be and who will be responsible for those costs.

For further details of Tenancy Deposit Schemes and contact details check the Scottish Government website.

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