Are letting agent fees legal in Scotland?

Tenant fees have been explicitly banned in Scotland since 2012.

The regulation which banned them was a clarification of the original Rent Act 1977, which prohibited taking any payments from tenants for anything other than rent and security deposits.

Understanding Letting Agent Fees in Scotland

If you are a tenant renting in Scotland, you might be curious about whether or not the fees charged by letting agents are lawful. Despite Scotland having one of the strongest protections for tenants in the UK in terms of rental expenses, the quick answer is that fees for lettings are not lawful. It has been illegal for landlords and letting agents to charge tenants for administrative or tenancy-related services since 2012, when a full tenant fee prohibition was put into effect.

It means that tenants in Scotland are not allowed to be charged for services such as setting up viewings, performing references and credit checks, creating tenancy agreements, or carrying out inventory checks. Because of the responsibilities that come with property management, the landlord or the letting agent is responsible for covering all of these costs.

The rules are not the same everywhere in the UK. The Tenant Fees Act 2019 is the law implemented by England and Wales, banning most fees while allowing specific charges that are acceptable. Northern Ireland remains the only region that does not have a total ban on tenant fees.

Which Fees are Banned for Tenants?

Tenants can’t be charged for:

Administration: This includes drafting a contract and other administrative tasks, such as providing you with a copy of the contract. Prior to the new guidelines, this cost between £100 and £150.

Tenant Referencing: Previously charged at £75 to £100 per tenant, they were used to determine a tenant’s suitability before the fee ban.

Credit history checks: Credit checks were sometimes carried out through credit agencies and cost between £50 and £100 per tenant. The purpose of these checks was to verify that a tenant is capable of paying their rent and to ensure that they do not have any significant outstanding loans.

Inventory Preparation: A full inventory is essential to protect the landlord’s and tenant’s interests.  In the past, the cost of preparing the inventory was often charged to the tenant or split between the landlord and the tenant.  This is no longer permitted, and it is up to the landlord to provide the inventory.

What fees can tenants legally be charged?

Landlords and letting agents are only able to charge tenants certain fees under current rules in Scotland. These include the following:

Rent: The amount that has been agreed upon to be paid to occupy the property.

Tenancy deposit: This is refundable at the end of the tenancy and has a maximum amount equivalent to two months’ rent.

Utilities and council tax: Tenants may be required to pay for gas, electricity, water, internet, TV licence and Council Tax.

How to Respond to Illegal Fees?

Whenever you are asked to pay a fee that is banned by the law, you should do the following:

Know your rights: You should become familiar with Section 89 of the Rent (Scotland) Act 1984, as updated by the Renting Homes (Fees etc.) (Scotland) Regulations 2012, so that you can dispute the charge with confidence.

Ask for clarification in writing: Make sure you ask for a detailed explanation of the cost and the reason it is being charged.

Point out the ban: You should remind the landlord or letting agent respectfully that the cost is not acceptable.

Refuse to pay: Your tenancy request cannot be denied just because you refuse to pay banned fees, as you are not legally required to pay these payments.

Report the fee: To report, you should get in touch with the trading standards team of your local council or Citizens Advice.

Keep evidence: Keep copies of any emails, letters, or receipts you receive in case you need to file a formal complaint or do something else in the future.

What happens if I get charged fees anyway?

If your landlord or agent charges a fee that is banned by the new laws, they have 28 days to return it. A first-time offender may face a £5,000 fine.

If you were charged a banned fee, you can report your landlord or agent to Trading Standards. If they violate the guidelines more than once, they may face prosecution by the council and be forbidden from renting out property in the future.

Tenant Rights on Letting Agent Fees in Scotland

In Scotland, letting agent fees for tenants are fully banned, making the rental process more straightforward. The rent and a refundable deposit, protected by a government-approved program, are the only payments that landlords are permitted to charge tenants. This approach lays the financial burden for tenancy setup and property maintenance firmly on the shoulders of landlords and letting agents.

Scotland’s regulations are the most protective for tenants when compared to those of the rest of the UK. The Tenant Fees Act 2019 provides similar protections in England and Wales, but Northern Ireland remains an exception. Understanding these things can help tenants avoid paying illegal fees, while landlords and rental agents can ensure they stay on the right side of the law.