Edinburgh University Students Association Safeguarding Tenancy Deposits: the Tenancy Deposit Schemes (Scotland) Regulations 2010 (Draft)

Transcription

1 Edinburgh University Students Association Safeguarding Tenancy Deposits: the Tenancy Deposit Schemes (Scotland) Regulations 2010 (Draft) October 2010

2 Edinburgh University Students Association Edinburgh University Students Association (EUSA) represents 27,000 students currently studying at The University of Edinburgh. We are an active but autonomous member of the National Union of Students. We work to improve student support and higher education for students across Scotland and the UK. As well as striving to improve the student experience within the university we also work to improve the lives of students in their communities outside the university. Introduction Edinburgh University Students Association (EUSA) strongly welcomes the draft regulations for a tenancy deposit scheme in Scotland. Many students visit the EUSA Advice Place to ask for help in retrieving their deposits which have been withheld by landlords. This can cause considerable financial problems. Tenancy deposit schemes will make a positive difference to all tenants and in conjunction with the Housing (Scotland) Bill currently with parliament and further private rented legislation later in the year it will help to improve the private rented sector. To have the most positive impact on the sector a tenancy deposit scheme must be self-financing, it must set out clear guidelines to what is reasonable for landlords to reclaim, and it must be well publicised to tenants and landlords so that they are clear of their rights and responsibilities. It is essential that tenancy deposit schemes have a dispute resolution service and we are particularly pleased that this is included in the regulations. Chapter 1: General Provision about Tenancy Deposit Schemes It would appear that in cases where the landlord has failed to submit a deposit into a custodial or insurance scheme, the landlord will only face sanctions if the tenant notifies authorities that this is the case. If so then it is crucial that tenancy deposit schemes are publicised well so that tenants are aware of their rights. If the responsibility falls on the tenant to notify authorities then the tenant is required to have some existing knowledge about tenancy deposit schemes at the very least that they exist in the first place and that their landlord is legally bound to place their deposit in a scheme. They must be aware that their landlord faces sanctions if they don t comply, and know who they should inform if their landlord does not comply. We are concerned that the only way tenants can take action against a landlord who does not place a deposit in a scheme in the first place is through the court. This could potentially deter people from taking action against their landlord. Currently the only way that tenants can retrieve their withheld deposit is by applying to the small claims court which is a costly, lengthy and daunting experience, the prospect of which discourages many people from applying. Therefore many deposits unfairly withheld remain so. Support and advice must be available for tenants who want to apply to the court. Many tenants may not want to do so for fear of inciting further problems with their 2

3 landlord. We also believe that tenants should not be charged for applying to the court. Question 1: Do you support the proposal that the tenancy types covered by a tenancy deposit scheme should be aligned with existing landlord registration legislation? We are not sure why properties with resident landlords are not covered by the regulations. It is not uncommon for landlords to let their property whilst living in it and tenants who are sharing with a resident landlord should be offered the same protection as other tenants. Chapter 2: Conditions for approval of a Tenancy Deposit Scheme EUSA believes that one scheme provider would be better than several. Having several schemes in operation could be confusing to tenants and landlords and harder for them to decide which scheme was the best to use. The National Union of Students (NUS) UK has reported to us that even with just three schemes in operation in England there have been numerous fraudulent schemes set up. One scheme for all would provide clarity as well as security. Tenants and landlords would know for certain that the scheme they were using was dependable and secure. If more than one scheme does exist, then it is important that they are called distinct names so there is no confusion. Question 11: Do you have any views on the provisions relating to the use of excess income accrued on deposits? EUSA recognises that tenancy deposit schemes should be self-financing and any income made should pay for the running costs first and foremost. However, we think that using any excess income towards schemes that would benefit the community would be beneficial to tenants, landlords and local authorities; for example using the money for better communal recycling facilities, safe bike racks, or better lighting. These would all improve the standard of living for tenants and improve the value of the area and in turn the value of properties. Question 13: Do you consider that both custodial and insurance scheme models afford adequate protection for tenancy deposits and should be permitted in the regulations? EUSA believes that the custodial scheme offers better protection for tenancy deposits. The insurance scheme is more complicated, particularly when disputes occur. Resolving disputes could potentially take longer as initial action is dependent on the landlord passing the deposit to the scheme after a dispute has been noted. Question 18: What are your views on whether approved schemes should repay deposits to lead tenants if so used, or to individual tenants? Schemes should repay deposits to individual tenants where there are joint tenants renting a property. Private rented accommodation is an important source of accommodation for students who will most often be living in shared houses. It can be difficult at the end of the tenancy, when everyone has gone 3

4 home for the summer, for the lead tenant to return deposits to other tenants when they no longer live in the same property or are in regular contact. Also, returning the deposit only to the lead tenant provides no protection in cases where there are disputes between tenants. Chapter 3: Requirements relating to Dispute Resolution EUSA strongly welcomes the provision in the regulations for a dispute resolution service. Currently, tenants must apply to the small claims court to dispute their deposit return. This is a costly and daunting experience so we are pleased that the regulations state that dispute resolution should not require either party to attend any form of hearing. We also welcome the presumption in dispute resolution that the deposit should be repaid to the tenant unless the landlord establishes a case to the contrary. We note the duty to provide certain information to landlords and to tenants. We urge that tenants must be told clearly from the start of the tenancy how they can dispute the amount of tenancy deposit returned. We would urge that it is made entirely clear to tenants and landlords how the dispute resolution service operates so that they are able to make use of it and to avoid court proceedings. Furthermore, disputes should be resolved as quickly as possible and money to be returned should be done so quickly. The NUS UK has reported to us that in England there have been lots of complaints from tenants that disputes take too long to return money to the relevant people. Often tenants use deposits to pay for their next accommodation so a delay in returning the disputed amount could cause significant financial and accommodation problems for tenants. Question 21: Are you content with the proposal for ADR to be free of charge for tenants and landlords, at the point of access? EUSA fully agrees that ADR should be free of charge for tenants and landlords. Often people renting private accommodation are doing so because they cannot afford to buy, or they are young families, migrant workers or students. For tenants who have the reached the stage where they are entering ADR, the fact that their deposit has not been returned could already be affecting them financially. For example, they may not have enough money to pay the deposit for their next accommodation. Students are particularly vulnerable because of their low income over the academic year. The introduction of a dispute resolution service should be an improvement on the current situation of having to use the small claims court which can cost money. ADR should therefore be free and accessible for all tenants. Chapter 4: Miscellaneous We believe that publicising the scheme to tenants and landlords is vital to its success. To truly protect tenancy deposits in Scotland people must be made aware of the new legislation so that it can have the greatest effect. 4

5 EUSA believes that there is a large role for the Scottish Government in publicising the introduction of tenancy deposit schemes so that tenants and landlords are aware of their existence. Only then will they know that their landlord is failing to fulfil their legal duty and that they should notify the appropriate authorities. Tenants must know who to notify and how to get in touch with them. The period leading up to the introduction of the schemes will be particularly important. The fact that there will possibly be more than one scheme in operation means that a coherent message from the Scottish Government will be important in getting the message out about the new legislation. We welcome the requirements in the regulations for scheme administrators to provide information to tenants. If many schemes are in operation it will be important to make sure that the quality of the information is good across all schemes. In information provided to the tenant from the scheme administrator there should be a note of where tenants can get independent help and advice if they do not feel that they want to speak to the scheme administrator for whatever reason they may for example think that it would compromise their case for getting their deposit back. Question 23: Do you have additional views on how approved schemes should be publicised? Information about the schemes could be included in advice and information for tenants and landlords about HMOs and landlord registration. As part of plans to improve and strengthen standards in the private rented sector tenancy deposit schemes fit well with these other two initiatives. Students associations could also have a role to play in getting information to student tenants about the schemes, for example via leaflets provided in advice centres by the Scottish Government or the individual scheme administrators. Question 24: Do you support the proposals in relation to the requirement for a landlord to provide information about his or her registration status? Yes. Landlord registration has helped to strengthen private rented accommodation and protect tenants. It helps to ensure that only fit and proper people become landlords therefore it protects tenants. Currently, it can be difficult to enforce. At April 2009, only five landlords had been refused registration and one struck off the list. 1 No one has ever been prosecuted for failing to register. 2 Any proposals which would make it easier to identify unregistered landlords would be much welcomed. 1 Landlord registration in Scotland: three years on, Shelter, April Stage 1 Report on the Housing (Scotland) Bill, Local Government and Communities Committee, Scottish Parliament

6 Question 25: Are there any other circumstances in which you think it would be appropriate for a scheme administrator to share information with local authorities? For example, of sanctions and penalties applied to a landlord, or the outcome of adjudication found against a landlord. Should the scheme administrator discover that a landlord does not have an HMO license and requires one, it should share the information with local authorities. For example in cases where the deposit should be returned to individual tenants in a shared house rather than the lead tenant scheme administrators could request the property s HMO licensing code. Like with landlord registration, it is difficult for local authorities to identify unlicensed properties and it could be helpful if the tenancy deposit scheme helped in this matter. HMO licensing was introduced to protect tenants and licensed properties must adhere to safety standards. Landlords who are not licensed are putting tenants lives at risk. Question 26: Do you agree with the proposals relating to the requirement for approved schemes to submit annual and quarterly reports to Scottish Ministers? Yes. The schemes will be holding public money and it is essential that they are monitored and evaluated. Additional feedback Tenant contact details It is essential that schemes make sure that they have multiple contact details for tenants and double check these at least annually. Students change addresses, telephone numbers and addresses, and this could cause problems for returning deposits. For further information about this response contact Liz Rawlings, EUSA President, by calling or president@eusa.ed.ac.uk Edinburgh University Students' Association is a charitable body, registered in Scotland, with registration number SC