About illegal tenancy charges in Scotland
Although currently it is illegal under Scottish Law most letting agencies in Scotland charge new tenants a fee on top of their rent and deposit. Despite the fact that this practise is so common and it is difficult to avoid paying illegal fees tenants have the right to get their money back.
However, current legislation has not been explicit enough about additional charges such as reference checks, credit checks and inventory fees.
If your landlord or letting agency asks you to pay for anything other than the rent and deposit for your property that’s classed as a tenancy fee. They might claim that this is for the administration costs involved in checking your references or setting up your lease and letting agents also can charge a fee to provide references for tenants who are moving elsewhere.
The law will now be clarified so that all tenant charges, other than rent and a refundable deposit, will be deemed illegal.
The Rent (Scotland) Act 1984
This act (as amended) prohibits landlords from charging tenants for the cost of preparing a lease, administration charges, money for key or for the cost of preparing an inventory etc. All of these charges are known as "premiums".
Accordingly Rent (Scotland) Act 1984:
s 82 - 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 or the making of any loan (whether secured or unsecured) shall be guilty of an offence under this section.
(2) Any person who, in connection with the grant, renewal or continuance of a protected tenancy, receives any premium in addition to the rent shall be guilty of an offence under this section.
(3) A person guilty of an offence under this section shall be liable to a fine not exceeding level 3 on the standard scale.
(4) The court by which a person is convicted of an offence under this section relating to requiring or receiving any premium may order the amount of the premium to be repaid to the person by whom it was paid.
s 88 - Recovery of premiums and loans unlawfully required or received
(1) Where under any agreement (whether made before or after 12th August 1971) any premium is paid after 12th August 1971 and the whole or any part of that premium could not lawfully be required or received under the preceding provisions of this Part of this Act, the amount of the premium or, as the case may be, so much of it as could not lawfully be required or received, shall be recoverable by the person by whom it was paid.
2) Nothing in section 82 or 83 above shall invalidate any agreement for the making of a loan or any security issued in pursuance of such an agreement but, notwithstanding anything in the agreement for the loan, any sum lent in circumstances involving a contravention of either of those sections shall be repayable to the lender on demand.