Scotland slams the door on ‘rip-off’ letting agent fees

This should remove a real burden from tenants who generally have no choice but to pay and may already be under financial pressure. It sets an example to the rest of the UK.

Yes definitely.

Add the cost of 2.5 months rent to all the fees and you can see why agencies are making it more and more difficult for tenants to move. It may not surprise you that landlords are also charged these fees every time a new tenant moves in, plus various others that you haven’t mentioned on here.

Just another example of over-charging when in fact they are just charging it because they can, as everyone else does it

Yes definitely.
Scotland generally has more laws to protect tenants than England and Wales, as does France and Germany where tenancy is more common than ownership. There is a housing shortage in England, particularly in the South East. This scenario makes tenants tenants ripe for exploitation & they need all the protection they can get.

NO. The industry need regulation, not destruction!
Of course there are rogue agents, just as there are rogue solicitors, bankers. MPs etc… Why punish a whole industry for the misdeeds of a few?

It is illegal for agents to charge viewing fees, and if an agent refuses to reveal their administration charges, or asks for money up front, the tenant can walk away. No one is forcing a tenant to use a particular agent, but it is advisable to use an genuine, established, professional agent who will generally have fees towards the bottom end and will gladly tell what they are doing to earn it.

The deposit is not a fee, it is security bond returned to the tenant at the end of the tenancy, unless they cause damage or do not pay utility, council tax bills, neither is advance rental a fee.

Tenants need protection as do landlords [there are more bad tenants than bad landlords, but we hear little about them], the reasons for using a lettings agent is because the law is now so complex the majority of tenants and landlords have no idea what their rights and obligations are, the government changes the law on aspects of rental frequently, and many times without informing the industry, or anyone else. They have just altered the ‘Estate agents act’ to allow Tesco & Sainsburys to act as estate agents, by removing the safeguards necessary to protect the public, all without informing the industry.

Tenants need proper legal assured shorthold tenancy agreements, they need deposit protection, they need to be aware of repair obligations, insurance, rights of entry, saftey requirements, licensing for rentals, tenants need professional inventories, many landlords require credit and external reference checks, and tenants need to provide them, the list grows daily. Most landlords are also unaware of the myriad of regulations, and can unknowingly walk into disaster.

All these things take time and cost money, so who is to pay?
The landlord can stand all the tenants costs, and the tenant then changes his mind, or the references are no good and the landlord cannot accept them, why should the landlord pay for this?

And of course If the landlord has to bear all these costs, they will end up tagged them onto the rent anyway.

I would never ever let any of my properties without using my agent, because I just don’t have the time or knowledge to do it properly, just as I would use a solicitor or accountant for legal or financial matters, to do otherwise is courting disaster.

@m in reality a tenant is forced to use a particular agent. Renters are basically stuck with whichever agent the landlord of their preferred property opted to sign a contract with. I’m sure I speak for most people when I say I make my decision based on the home I will be living in for 12 months (often picking from a very limited pool) and not the body handling the initial contract. Only once have I been able to choose between two agents both letting the same flat, and funnily enough on that occasion they agreed to waive their fees as a sweetener!

As a letting agent, I agree fully with the landlord “m” who posted above. Many of those on the other side of the debate believe that agents only work for the landlord, and that all agents are treating tenants badly.We treat our tenants as clients, just as much as our landlords. It’s in the interests of both the landlord and the agent that tenants are happy in the property.

We have only been charging the tenant for referencing, precisely to prevent the problems mentioned by “m”, i.e. prospective tenants changing their mind late in the process or tenants failing our checks. I can guarantee that both of those problems will increase because of what the Scottish Government is doing.

So the loss of fees is not the real problem, it will be the significant additional cost of processing people who fail our checks or who do not take up an offer.

Shelter, as the main campaigners for this change, seem to think we are in the social housing business. Instead of punishing all agents and landlords in the private sector, they should be spending their funds on persuading councils and housing associations to step up to the plate!

Hi G, I’m not in Scotland I’m afraid, and not sure the move would work for me at the moment!

If referencing costs are around £75 as you suggest, then I could accept that. But if that is a representative cost, the agent I went through made approximately £130 out of us at a time when money is understandably tight.

I’m pleased to hear you charge the cost to your own tenants, and it’s an interesting point you make about whether or not tenants should pay for exit inventories. Again – perhaps I wouldn’t be so hesitant about this if I hadn’t had to pay £180 for it. I was present for the initial inventory, which was fairly easy as the property was largely unfurnished. They took a few photos of cracks and damages and wrote down everything that was marked. To do this again when we leave doesn’t seem to represent £180 of work, in my mind.

@Jennifer
The inventories you describe do sound a bit perfunctory. Even before the advent of tenancy deposit schemes in Scotland, we arranged very detailed inventories by professionals. They are primarily about the condition of the property rather than the contents.

Although they are very detailed, we charge less than you were asked for, and the landlord pays.

While I’m against ripping people off with excessive fees which a lot of agents have been doing for years, as a private landlord I feel the government is unjust in making it illegal for a landlord to charge a prospective tenant the cost of a credit check..

I have recently left a rented flat to buy a house (sorry – apartment – they use that word to make flats sound better). In my experience letting agents are out for all that they can get. People don’t move unless the accomodation that they live in is unsuitable and agents know this – and so prey on vulnerabilities of people so add on extra charges, some are unlawful in Scotland – but the vulnerable tenant to be won’t argue – they need to move. So the charge is added and paid. I don’t blame the agents, if I could earn money from changing an address ona document, charge £100+ then I would do that too. If the tenants reclaim this the practice will stop all it needs is a few cases in the sherifs court to refer to and agents will have no option but to repay all these fees (I bet most of the reclaimyourfees success stories were settled outof court for this reason).

Landlords are complaining that they need reference fees to protect their investment. Hmmmm. Well I am sorry but with great rewards comes great risks and if you are not prepared to take a risk then don’t expect the rewards.

A typical landlord will have invested £20,000 to buy a property that in 20 years time will be theirs – paid for buy their customers rent – and will be worth 10x and more their initial investment. No other investment will offer these returns in such a short space of time with a minimum of effort. So high rewards for high risk…. the risk being that one or 2 of their tennants in this time will be bad costing the landlord only a couple of thousands to put the problem right – out of a return of £180,000+ this is a small amount.

So why are they complaining?

Last part of the problem is that the letting agents charge both sides for the same thing in many cases and neither side know it.

I was charged £125 to renew a fixed term contract. I would be grateful if someone could explain how a letting agent would arrive at this figure and what costs are entailed that I am covering.
If I don’t renew the fixed term and stay on a monthly rollover I can be told to vacate the property with one month’s notice (it says this in my contract), although, legally I believe the landlord would have to give me two month’s notice.

I am currently moving from a rented flat into a rented house. Unfortunately, the house is with a different agent and so far I have had to pay:

£225 – for what they call an application fee
£60 – “Administration” fee
£50 – Guarantor check fee

When I sign the agreement, I will have to pay one months rent + £100 for the deposit (understandable), then a months rent on top (which I knew about anyway) but then a further £60 for a copy of the inventory and another £60 in 6 months for a “tenancy renewal fee”.

I have also had to pay £30 to my current agency to provide a reference. They even charged 45p to pay by my DEBIT card as I couldn’t get into their shop to pay at the time.

I’m thinking of going to trading standards, but I’ll have to pay up and move into the property first as I don’t want to kick up a fuss and have it withdrawn, otherwise I’ll lose everything I’ve paid so far. I’m angry though.,

USA vs UK: I had moved from USA to Scotland and troubled seeing such a sloooow Process for renting. I don’t understand why the owners have depended on agents so and so much and can’t rent on their own. Rental offices are not working on Saturdays is really aching, where as newly on job need to make some time out of Office time on weekdays. Some times, you don’t have good manager, who don’t like giving time off. God bless such a lazy process.