111.Part 4 of the 2006 Act (tenancy deposits) comprises sections 120 to 123. In that Part, references to a “tenancy deposit” and a “tenancy deposit scheme” are construed in accordance with section 120. Section 121 gives a regulation-making power to the Scottish Ministers to set out conditions that a tenancy deposit scheme must meet before it can be approved by them, and to make such further provision about tenancy deposit schemes as they think fit.
112.Section 37 of the 2025 Act modifies the regulation-making power in section 121 so that it can also be used to impose requirements on a person who administers an approved scheme to report to the Scottish Ministers on matters relating to the operation of the approved scheme including matters relating to unclaimed deposits. It also inserts a requirement that any such regulations must include provision to ensure that a tenancy deposit that is held under an approved scheme is not repaid unless a relevant application has been made, within a specified 5-year period, for it to be repaid. “Approved scheme”, “scheme administrator”, “relevant application”, “5-year period” and other relevant terms are defined in new subsection (5) of section 121 or new section 123A.
113.The following sections are also inserted into the 2006 Act—
Section 122A provides that a tenancy deposit held under a tenancy deposit scheme that has been approved by the Scottish Ministers (an “approved scheme”) is to be determined, by the scheme administrator, to be an unclaimed deposit if satisfied that no relevant application was made, within the specified 5-year period, for it to be repaid.
Section 122B provides that the Scottish Ministers may direct the scheme administrator of an approved scheme to the transfer of any unclaimed deposits to them or another person (a “fund administrator”). The scheme administrator must comply.
Section 122C provides that transferred unclaimed deposits may be used for certain purposes to support private tenants (or potential new tenants) and to cover reasonable administrative costs.
Section 122D provides that the Scottish Ministers must prepare a report on the use of unclaimed deposits that are transferred to them or another person. The report must be published within 3 years of the first day on which requested deposits are transferred. A copy must be laid before the Scottish Parliament as soon as reasonably practicable after publication. To inform any such report, the Scottish Ministers may direct a fund administrator to provide them with a report on the use of any unclaimed deposits that are transferred to the fund administrator.
Section 122E provides that the Scottish Ministers may, on the application of a former occupant, repay all or part of a tenancy deposit that was transferred to them or another person if they are satisfied that the applicant had a reasonable excuse for not making a relevant application within the 5-year period and would otherwise be entitled to it.
Section 123A defines various expressions used in Part 4 of the 2006 Act.