Many landlords require their tenants to pay a rent deposit before they take on the tenancy. This deposit is then held in line with the National Rent Deposit Scheme against any damage to the property during the tenants’ occupation of it. Provided the property is left in the same condition as it was before the tenancy the deposit is then returned to the tenant in full. More information on the National Rent Deposit Scheme is available on the Scottish Government's website, a link to their website can be found in the 'Related Sites' section of this page.
A rent deposit cannot be higher than two months rent and it should be made clear what could be deducted from it before the tenancy starts.
The tenancy agreement should state exactly what will be taken into account before the deposit will be returned, for example damage to the fixtures, fittings or furniture in the property, the overall decor, outstanding rent etc. Nothing can be deducted from the deposit for reasonable wear and tear.
It is important to ensure that you have a detailed inventory and also dated photographs prior to the tenant moving in, in case of disputes.
Orkney Islands Council runs a rent deposit scheme whereby tenants can apply for assistance with their deposit and, if the application is approved, Orkney Islands Council will pay the deposit directly to the landlord who will then place the deposit in one of the recognised National Rent Deposit schemes. The tenant repays the council in instalments. Under this scheme, the landlord must contact the council when the tenancy is coming to an end to check if the deposit is to be repaid in full to the tenant or if part is due to the Council. Orkney Islands Council will pay up to one month’s rent as a deposit under this scheme.
Certain criteria apply in qualifying for this scheme. Our leaflet outlining this is available from the 'Related Downloads' section of this page.
Accepting a rent deposit from the scheme does not stop the landlord applying to the National Deposit Scheme to retain part or all of the deposit to cover damages. However the landlord must inform the Council of these damages and the amount of money he/she intends to apply to be retained. For further information please see our Rent Deposit Leaflet, available from the 'Related Downloads' section of this page.
Please note that whilst charging a rent deposit is acceptable, a landlord cannot ask for any key money or charge anything for providing a lease, such charges are illegal.