The Tenancy Deposit scheme, which came into effect on July 2, 2012, ensures protection of deposits for tenants renting properties from private landlords or letting agents.
Under the scheme, agents in receipt of a tenancy deposit are obligated to transfer the deposit to one of the licensed scheme providers who will hold the deposit until the end of the tenancy. In the event of the deposit repayment being disputed by either party, evidence will be requested from both parties and an independent adjudicator will be assigned to resolve the dispute.
For CKD Galbraith, who use SafeDeposits Scotland to look after tenants' deposits, the tenancy deposit scheme has been a positive experience with deposits being simple and fast to upload and also return at the end of tenancy. Disagreements under the new scheme have also been very low, with more than 98% of deposits returned to the tenant without dispute.
Bob Cherry, partner in charge of CKD Galbraith's lettings department, said: "Over the past five years there has been a boom in the lettings market but at times that has created issues of unscrupulous agents who move into the sector believing they can make a quick profit.
"The growing importance of the lettings market had to be followed by increased safeguards for tenants and landlords and we believe the Tenancy Deposit scheme has helped to provide that.
"Prior to the scheme, there had been examples of agents holding onto deposits because the sum of money had been used elsewhere most likely to help run the lettings business itself.
"Now, tenants have greater peace of mind and it is harder for dishonest agents to function within the industry.
"We believe that most agents and tenants have benefited from the scheme, with landlords less likely to become embroiled in disputes and tenants reassured that their deposit is safe.
"There probably has been an effect on some letting firms in Scotland, with those who relied on tenants' deposits for cash flow purposes struggling to adhere to the legislation. However, this is a necessary consequence to ensure the rights and finance of tenants are guaranteed at all times.
"With potential for adjudication under the scheme, the tenant's position is improved and landlords, through their agents, can no longer consider a deposit as their money.
"Coupled with the Scottish Government's recent publication of their Private Rented Sector strategy, we are now seeing positive steps to root out bad practice in the lettings sector. Increasing accountability to tenants, industry bodies and government can only be seen as a good thing for the private rental sector."
CKD Galbraith currently operates six regional lettings teams from its 14 offices throughout Scotland and is a member of the Royal Institution of Chartered Surveyors (RICS), the Association of Residential Letting Agents (ARLA) and the National Approved Letting Scheme (NALS).
In addition, CKD Galbraith holds a SafeAgent accreditation which guarantees that tenants' and landlords' money is protected by a client money protection scheme.