Letting agents ‘ripping off tenants’ - housing charity

PRIVATE tenants in Scotland are being ripped off by some letting agents making “extortionate” and potentially illegal upfront charges, according to a housing charity.

An undercover probe by Shelter Scotland found that nine out of ten agents it investigated were demanding “high” fees from tenants for services on top of the rent payment and deposit.

In one instance, an administration fee of £180 was charged by a company handling a property in Glasgow.

The charity said thousands of people are leaving themselves open to unfair treatment and financial exploitation because they are not aware they should not have to pay extra charges.

Shelter Scotland director Graeme Brown said: “Times are hard enough for many people right now and the last thing they need is to be fleeced by unscrupulous letting agencies in their search for a home.”

At the moment, more than 272,000 households in Scotland are considered to be in the private rented sector.

Current laws prohibit charges for drawing up a tenancy agreement and it is also an offence to charge any “premium” as a condition of continuing a tenancy.

The charity’s “secret shopper” exercise investigated 29 letting agents chosen at random, many of which have multiple offices across Scotland. For each enquiry a specific property was chosen, charging a monthly rent between £360 and £600. Each letting agent was telephoned and asked for further details on the property, particularly the costs involved.

Investigators said that 90 per cent demanded “high upfront fees to tenants for services like credit checks and paperwork to process applications”.

Branding the findings “shocking”, Shelter said such fees can be illegal under the 1984 Rent (Scotland) Act and are a major obstacle for prospective tenants to overcome when they already face paying rent and a deposit before getting the keys to their new home.

The charity found that upfront charges, mostly described as administration fees, ranged from £16 to £180. Eleven letting agencies charged £120 or more across Edinburgh, Glasgow, South Lanarkshire, Falkirk, Bathgate, Stirling and Dundee, the survey revealed.

Shelter also uncovered instances of tenants being asked to pay a fee to renew their tenancy, ranging between £25 and £50 every six months.

The organisation added that “disproportionate fees by unscrupulous letting agents” for credit checks, drawing up a lease and renewing a tenancy are making it even tougher for hard-pressed people to find affordable accommodation in the private rented sector.

The charity wants new laws which make it clear that all charges to tenants, over and above rent and deposit payments, are unlawful.

Mr Brown said: “That some letting agents, established and new, are charging extortionate and unjustified upfront fees is shocking. They are not only ripping off desperate people who need a roof over their head and who, in many cases, have little or no choice but to pay up, but they are also undermining the work of good letting agents who offer a fair deal to tenants.

“New legislation clarifies tenant’s rights and the Government must make it clear that all charges above rent and a reasonable deposit are unlawful. Only then will tenants, and indeed landlords, be assured that they are not being exploited.”