Government ban on all tenancy fees could set precedent

In a move that will send shivers through the entire UK lettings industry, the Scottish government has announced that legislation will be toughened up to ban all up-front fees.

Scottish housing minister Keith Brown has confirmed that letting agents should not be charging the fees and said that the Rent (Scotland) Act 1984 will be clarified to become unequivocal on the matter. The move also affects landlords who, for example, currently charge tenants for inventories and paperwork.

While this move has been played out north of the border, it is being seen as a worrying precedent for the rest of the UK.

What now looks like a crisis for many letting agents in Scotland followed a vociferous campaign by Shelter to ban any and all tenant fees – for example, reference checks, credit checks and inventory fees.

The Scottish law will now be clarified so that all tenant charges, other than rent and a refundable deposit, will be deemed illegal.

Housing minister Keith Brown said: “The majority of letting agents operate in a thoroughly professional manner and play an important role in the Scottish private rented sector.

“However, numerous cases of tenants across the country being ripped off were uncovered by Shelter Scotland.

“As a result of this consultation, we will make it crystal clear to tenants, landlords and their agents that all premium fees, over and above rent and a deposit, are unlawful.

“We will now commence the necessary legal provisions to come into force later this year.”

Gordon MacRae, head of communications and policy at Shelter Scotland said: “This is great news for everyone who has been ripped off by unscrupulous letting agents. It will finally put an end to this unlawful practice and ensure that tenants are no longer exploited.

“Shelter Scotland has been campaigning all year for these fees to be outlawed.

“Our reclaimyourfees.com website has proved so popular that already more than £100,000 worth of claims against letting agents have been made using our free step-by-step toolkit.

“Moves like this can only strengthen Scotland’s private rented sector and help make it a fairer and more secure place to live for the 270,000 households that now call the sector home.”

The change in the law, due in November – the same month as the tenancy deposit deadline – is likely to hit some agents extremely hard.
 
Ian Wilson, managing director of Martin & Co, said: “As a business we collect around 7% of total revenue in Scotland from the fees being banned.

“It’s bad news for letting agents generally in Scotland, but if you were being charitable you could say that at least it provides
Article courtesy of Landlord Today
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