A number of people who have made use of #ReclaimYourFees have received responses from their letting agent turning down their request for the repayment of their fees.
These responses are based on an incorrect interpretation of the law. The Scottish Government have made it clear that these fees are unlawful. In addition our own team of solicitors, a number of Scottish law firms including TC Young and success stories from tenants who have reclaimed their fees support this. We have also sought an advocate’s opinion which is available on to download on our website.
In the hope that tenants will not be put off from reclaiming unlawful fees from letting agents we have set out the facts, to show that the law is on the tenant’s side.
The letting agent says:
Charging fees is accepted practice amongst most letting agents in Scotland.
Although the charging of fees is adopted by many letting agents across Scotland it is unlawful. Any fees required as a condition of the granting, renewal or continuance of a tenancy, in addition to rent and a deposit of no more than two months rent, are unlawful. This includes any administration or service charges. These fees can therefore be reclaimed – regardless of the amount. View a list of what could count as unlawful.
What the law says:
Section 82(1) of the Rent (Scotland) Act 1984 states that ‘Any person who, as a condition of the grant, renewal or continuance of a protected tenancy, requires, in addition to the rent, the payment of any premium shall be guilty of an offence under this section’. Section 27 of the Housing (Scotland) Act 1988 applies this section assured tenancies as it does to protected tenancies. Section 90(1) of the Rent (Scotland) Act 1984 defines a premium as including ‘any fine or other like sum and any other pecuniary consideration in addition to rent’.
This means that any fees required as a condition of the granting, renewal or continuance of a tenancy are unlawful, and can therefore be reclaimed – regardless of the amount.
But the tenant can’t reclaim their fees because they agreed to pay them, or signed a contract agreeing to pay them.
Whether a tenant agreed to pay fees does not matter – they are still unlawful and can be reclaimed. This is true even if the tenant signed a contract.
We’re allowed to charge fees to people who are not yet tenants.
It is Shelter Scotland’s view that it doesn’t matter how such charges are described. Where administration or service fees are required as a condition of the granting, continuance or renewal of a tenancy, in addition to rent and a deposit of no more than two months rent, these are unlawful premiums. Both current and prospective tenants do not have to pay these fees.
We’ve sought legal advice and our fees are not premiums.
The Scottish Government have confirmed that pre-tenancy administration fees and service charges are premiums. Shelter Scotland also has several examples of tenants who have successfully claimed back unlawful fees from their letting agent, both at the small claims court (now the simple procedure court) and also before reaching that stage of the process. Don't be discouraged - proceed with the next stage.
You’re damaging our reputation by saying we charge premiums and we can take legal action against you for that.
For a statement to be defamatory it must be false. The Scottish Government have confirmed that premiums include service charges and administration fees. View a list of unlawful charges that can be reclaimed.
You can read a summary of the consultation results on the Scottish Government’s website.
A recent court ruling in favour of letting agents set an important precedent meaning that I do not need to repay fees to you.
This is completely incorrect. There has been no ‘court ruling’ and no ‘important precedent’ has been set. Shelter Scotland were involved in a small claims (now the simple procedure court) case in which the pursuers decided to drop their case. This was because of the length of time the action had taken and the stress relative to the amount of money being reclaimed. The case was not considered by the court and no decision based on the terms of the Rent (Scotland) Act 1984 was reached.
In reaction to this we have sought the opinion of an advocate, which we have made available on our website.
The law was changed in November 2012 and any fees charged prior to this are legal.
Fees were unlawful under the Rent (Scotland) Act 1984 before November 2012. Under s.90 of the 1984 act ‘any pecuniary consideration’ required in addition to rent and deposit is unlawful – this covers any money over and above what agents and landlords can legally ask for. All the Scottish Parliament did was to make it plain that ‘premium’ does indeed include administration and service charges by clarifying the law.
This was confirmed in a recent court case where the Sheriff stated: “In my opinion the definition was not changed - it was improved to make it crystal clear to all involved in residential leasing that administration fees ought not to have been imposed and ought not to be imposed.”
The Scottish Government has no authority to determine the meaning of the legislation on premiums.
Housing is a devolved matter and the Scottish Government has the power to make laws in relation to all aspects of housing. See ‘Devolved and reserved matters explained’ on the Scottish Parliament website.
We will not be refunding any fees paid by you.
Don’t be put off! Make sure that you move to step 3 of the reclaim your fees process and lodge a claim in the simple procedure court to get your fees back.
Blog post by TC Young Solicitors
TC Young Solicitors wrote a blog on the subject, pay special attention to the third paragraph
If you are an agent or landlord who charges any of these fees, you should be prepared for current (and previous) tenants to contact you to attempt to reclaim these fees. We are aware that a number of agents have been approached already in this regard. If you have been charging fees which would fall within the definition of an illegal premium, as stated above, you are unlikely to have a defence should a tenant wish to pursue you for repayment of these. You may simply have to pay up.