Letting agent fees are unlawful in Scotland

Scotland has taken a monumental step towards protecting renters from exploitative letting agent fees with new legislation that renders such fees unlawful. For many years prior to this, those renting in Scotland were facing ever-increasing service charges for everything – from viewing a home to the closure of their tenancy​ agreement. The cost and burden of these often opaque and exorbitant fees had been paid mainly by low and middle-income households who couldn’t afford to rent without them.

The Scottish Government’s Renting Homes (Fees etc.) (Scotland) Act 2020 came into force on 1 December 2020, ending the use of tenancy fees and restrictions on up-front payments by landlords and agents when people enter into a tenancy agreement. The measures also provide a model tenancy agreement, which will offer standardised protection across the sector.

Justice Secretary Humza Yousaf said: “The first of its kind in the UK, this historic move finally bans landlords and letting agents from charging tenants fees that are no more than their normal outgoings in seeking a home. Having ultimate clarity over what costs you may incur at the very start of your tenancy is essential if we want Scotland to be fair and just society where everybody is treated with dignity and respect”.

These new laws will therefore undoubtedly make it easier for people to genuinely find appropriate homes, in a clear and fair manner, free from excessive and unfair practices that had become commonplace over the years. People should beware however that although an end has been put to these excessive fee charges, it is still possible for landlords or agents to charge tenants for lost rent, damage caused beyond normal wear and tear or any costs incur when tenant leaves the property without notice.

In summary, Scotland has taken decisive action both in terms of protecting tenants but also making renting homes more organised and accessible. Letting agent fees are now unlawful in Scotland but it is important to understand any other charges and restraints you may face when entering your tenancy agreement.

On October 1, 2019, legislation was passed in Scotland banning the unlawful charging of fees by letting agents and landlords. This is great news for tenants, who had been facing steep fees when renting or renewing leases, with an average of £200 being charged. The new law outlaws these unfair fees and adds further regulations to make the renting process fairer and more transparent.

What did the previous system look like? Prior to this ban, letting agents in Scotland had been legally able to charge tenants various different kinds of ‘administrative’ fees such as referencing fees, tenancy renewal fee and check-out fees. These charges could run into hundreds of pounds on top of actual rent payments. This caused a financial burden for tenants which is no longer acceptable with the recent law change.

It’s important to note two key points about this change: Firstly, if you are a tenant in Scotland then it is now illegal for your letting agent or landlord to charge you any kind of fee relating to renting a property! Secondly, if you are an agent or landlord in Scotland, then you should familiarise yourself with the rules around letting agent fees to ensure that you comply with the law.

The Scottish Parliament first looked at this issue in 2017 and began to research how best to end these unfair practices. In 2018 a Private Member’s Bill was passed by MSPs in order to create the Rent Pressure Zone scheme, which places limits on rent increases and gives councils additional powers to tackle lettings agents who engage in aggressive or unfair practices. As well as this, the Scottish Government has recently published a Tenant Information Pack introducing further guidance on what information tenants are entitled to prior to entering into a tenancy agreement with their landlord or agent.

This is a huge win for renters in Scotland and is an important step towards making renting fairer throughout the country. No one should be unfairly exploited or financially burdened when trying to find somewhere safe and secure to live. Letting agent fees are now unlawful in Scotland, meaning that tenants can rest assured that any additional money they pay will go towards actually living in their home, rather than unfair and unnecessary mandatory charges by agents.