Graeme Brown: Firm action needed on unlawful letting fees

WITH more than 270,000 households across Scotland renting privately, Graeme Brown, director of Shelter Scotland, asks if it is time to take stock of the private rented sector

AT SHELTER Scotland we want to see a bigger and better private rented sector (PRS) – a sector that works for both tenants and landlords. We want to see a flourishing PRS where there is real competition on rents, where responsible landlords thrive and where firm action is taken on those other landlords who undermine the reputation of the sector. We want to see a form of private renting that can offer a home with all that implies – dignity, security and stability.

To ensure this happens we’ve been working with and advising the Scottish Government on the best way forward to shape the next housing bill. We hope this will give tenants, landlords and their agents a clear and transparent set of rules.

So, what needs to happen? We would like to see a change in the way private renting and tenants are viewed. Ultimately, we need to start treating tenants as consumers. Markets which work well, in my view, listen to consumers. Products are developed and evolved as consumer interests are articulated and acted upon. Unfortunately, the consumer voice in private renting is weak.

The vast majority of tenants, according to the Scottish Government, don’t feel well-informed. Many people who phone Shelter Scotland’s national helpline – 19,000 in the last year – tell us they feel powerless and there’s an unfortunate culture in some instances of choice being no more than “take it or leave it”.

This is evident nowhere more so than in the case of unlawful fees charged by some letting agents. An undercover investigation by Shelter Scotland last year showed that unlawful charges are worryingly widespread, with 90 per cent of those we contacted during our mystery shopping exercise demanding unlawful upfront charges. One letting agent in Glasgow charged £180 for “administration” fees, with another charging £80 to draw up a lease. Would you pay £80 for what is essentially a photocopy?

To clarify, despite the fact that premiums charged to tenants have been illegal in Scotland for almost 30 years under the Rent (Scotland) Act 1984 Part VIII, the nature of what should be classed as a premium has been long contested by some, to the detriment of tenants who are still being asked to pay these charges.

Shelter Scotland firmly believes that misinterpretation of the law of what should be classed as a premium and how to deal with agents who break the law is leaving thousands of people open to unfair treatment and financial exploitation.

Our worry is that there continues to be very little awareness among tenants about what is legal and reasonable to pay to letting agents and tenants’ rights if they have been charged such fees.

To help tenants, Shelter Scotland launched reclaimyourfees.com this week to help private renters exercise their right to claim refunds for fees unlawfully charged by letting agents.

ReclaimYourFees.com offers information and advice on what letting agents can and can’t legally charge for, template letters which tenants should send to agents outlining the legal case for a refund and a user guide to taking agents to the small claims court if they refuse to pay up.

In the first 24 hours of launch the website was visited by more than 600 people who started proceedings to reclaim more than £11,400 in fees unlawfully charged – an indication of how widespread the practice really is.

While we are pleased with the success of the campaign, it is by no means a long-term solution. We want the Scottish Government to move quickly to implement legislation passed last year that makes it clear that all charges to tenants above rent and a reasonable deposit are unlawful. Only then will tenants, and indeed landlords, be assured that they are getting a fair deal from letting agents.