Thursday, 22 November 2012

End to illegal charges on tenants

The law covering what fees letting agents and landlords charge private tenants has been clarified.

The Scottish Parliament has voted to approve secondary legislation so that all tenant charges, other than rent and a refundable deposit, will not be permitted.

From November 30, the law will now also allow any charges in relation to the UK Government’s Green Deal that may be attached to a privately rented property.

The current legislation, the Rent (Scotland Act) 1984, has not been explicit enough about additional charges such as reference checks, credit checks and inventory fees.

The move follows a consultation launched earlier this year on how to deal with unfair and illegal premiums.

It is estimated that there are around 500 letting agent businesses in Scotland involved in around 150,000 private lettings per year

Minister for Housing and Welfare Margaret Burgess, said:

“The vast majority of Scotland’s letting agents and landlords operate in a professional and above-board manner, and play an important role in the Scottish private rented sector.

“I am pleased that the legality of pre-tenancy charges has been clarified.

“This Government was determined to end the illegal practice of charges such as holding deposits and reference checks.

“The law is now clear on this matter and will help remove a barrier that will make the private rented sector more accessible for a wide range of individuals and families.”

Graeme Brown, Director of Shelter Scotland, says:

“This is great news for everyone who has been ripped-off by unscrupulous letting agents. It will finally put an end to this unlawful practice and ensure that tenants are no longer exploited.

“Shelter Scotland has been campaigning all year for these fees to be outlawed. Our web site has proved so popular that already more than a quarter of a million pounds worth of claims against letting agents have been made using our free step-by-step toolkit.

“Moves like this can only strengthen Scotland’s private rented sector and help make it a fairer and more secure place to live for the 270,000 households that now call the sector home.”

Click here to view the original article End to illegal charges on tenants

NetRent Comment

Clearly the Scottish Government believes that there is no cost to setting up a tenancy. They obviously believe that it's free to do the paperwork including references, tenancy agreement, inventory, bank set up etc. which will come as a surprise to landlords, agents and tenants alike.

In typical style Shelter, a charity, also believes that every other business should also be a charity and lays the blame for all the ills of the letting industry firmly at the door of letting agents who are exploiting tenants. Their claim that this makes renting in Scotland 'fairer and more secure' is dubious to say the least.

Having succeded in Scotland their next target will be Wales where the Welsh Assembly has already indictated that it too wants to end tenancy set up charges. England won't be far behind.

The reality is that it does cost to set up a tenancy and those costs will have to be passed in in the form of increased rents. So we'll have moved from a system where charges are transparent to a system where charges are hidden. And the benefit to everyone? None.