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 has recently 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.
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 recently 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 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 recently confirmed their intention to make it clear that premiums include service charges and administration fees. View a list of unlawful charges that can be reclaimed.
Letting agent fees are a grey area. The Scottish Government are consulting on this and we won't do anything until a decision has been reached.
The Scottish Government recently announced the results of this consultation and confirmed Shelter Scotland’s assertion that service charges and administration fees, required in addition to a fair rent and a deposit of no more than two months rent, is unlawful. This means that if you’ve been charged any of these fees in the last five years you can go to the small claims court to reclaim it.
You can read a summary of the consultation results on the Scottish Government’s website.
I’m allowed to charge fees now, the Scottish Government are going to make the fees unlawful later in the year.
Fees are currently unlawful under the Rent (Scotland) Act 1984. Any new legislation will not be to 'make' fees unlawful, but to clarify that this has been the case for some time now.
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 small claims 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.