The Association of Residential Letting Agents (ARLA) has urged Scottish ministers to back the introduction of a Tenancy Deposit Scheme in Scotland.

ARLA lent its voice to the debate after recent discussions were held in Scottish Parliament regarding the scheme. ARLA was behind the operation of the voluntary Tenancy Deposit Scheme in England and Wales before deposit protection became mandatory last year.

This legal requirement for the Private Rented Sector provided Alternative Dispute Resolution to tenants free of charge if problems arose over the allocation of deposits at the end of a tenancy.

ARLA suggested that this should be the main objective of any similar scheme operated in Scotland.
Ian Potter, ARLA’s head of operations, said Scotland should take its cues from the current scheme operating in England.

“There is no need to re-invent the wheel,” he said. “There is now a very high degree of experience in Britain that can be utilised for deposit protection across Scotland.”

In addition to the benefits of drawing on this experience, ARLA believed local authorities in Scotland had proven to be unenthusiastic about landlord registration resulting in lack of confidence among landlords,
agents and tenants.

“It would be exceedingly misleading for tenants to believe that their deposits are protected under the current regime,” Mr Potter said.

Of the three schemes operating in England and Wales, two are insurance-based schemes operating with regulated agents and affiliated landlords groups.

The third is a custodial scheme where deposits are lodged with the scheme at the outset. This scheme is paid for from the interest on deposits.

The insurance-based schemes are funded through subscription from either the letting agent or the landlord. Except for the notification of the start of a tenancy, their services are only needed in the event of a dispute arising.

All three schemes provide Alternative Dispute Resolution free to the tenant.