30 January 2015
Appeal by landlords against Sheriff Court Decision in favour of a tenant as a result of the landlords’ failure to comply with the Tenancy Deposit (Scotland) Regulations 2011.
Mr Russell and Ms Clark, as landlords of a property at 4/6 Admiralty Street, Edinburgh appealed against the Sheriff’s decision to award a sum in favour of their tenant amounting to 3x the tenancy deposit of £750 due to their failure to comply with regulation 3 of the Tenancy Deposit (Scotland) Regulations 2011. The landlords had failed to pay the tenant’s deposit of £750 into one of the three approved tenancy deposit schemes and subsequently made deductions from the deposit before returning the balance to the tenant at the expiry of the lease. The Sheriff Principal upheld the Sheriff’s decision to award the sum of £2,250 to the tenant, holding that the landlord had a clear duty to protect the tenant’s deposit and had failed to do so.
The duty to lodge a deposit with one of the approved schemes is absolute and there is no defence to a court action for payment under the Regulation if the deposit has not been properly lodged. It appears that the court can take into account circumstances when fixing the sum to be awarded but so far in such cases the courts have been awarding the maximum amount. We are aware of at least one claims company looking to represent tenants and pursue such actions on a commission basis. Accordingly, there is an increasing risk that landlords may find themselves subject to court action under the Regulations.
Link to original judgement: Stuart Russell and Laura Clark v. Samdup Tenzin, Inner House, Court of Session  CSIH 8A