Letting Agency Fees

Letting agency fees, for things like ‘administration’ or ‘reference checks’, are illegal in Scotland, and despite a legal clarification made by the Scottish Government in 2012, many letting agencies are still charging them, or unjustly refusing to refund fees they have charged tenants before the clarification.  You have the right to claim a refund for any fees you have been charged any time in the last five years, and tenants are generally very successful in getting a refund.

EPTAG have created this step-by-step guide to help tenants get their money back.

What are letting agency fees?

If your landlord or letting agency asks you to pay for anything other than the rent and deposit for your flat, that’s a letting agency fee. They might claim that this is for the administration costs involved in checking your references or setting up your lease. Prices vary, but the going rate seems to be around £70-90 per person.

Other charges that usually count as an illegal fee are: service charges, non-refundable holding fees, fees for renewing a tenancy, assignation fees, or charges to add a new person to the lease. There are many others, but the general rule is: any charge or fee other than rent or protected deposit is an illegal ‘premium’.  These fees are illegal, and you can claim them back.

Are you sure this is illegal?

Section 82 of the Rents (Scotland) Act 1984 states that:

Any person who, as a condition of the grant, renewal or continuance of a protected tenancy, requires, in addition to the rent, the payment of any premium or the making of any loan (whether secured or unsecured) shall be guilty of an offence under this section.

Following the clarification of the law, Section 32 of the Private Rented Housing (Scotland) Act 2011 contains a robust definition of letting agency fee or ‘premium’ as they are called in the law:

premium means any fine, sum or pecuniary consideration, other than the rent, and includes any service or administration fee or charge

Some letting agencies have argued that ‘premiums’ are only illegal after the clarification of the law in 2012, however tenants are successfully claiming back fees from before that date, and so letting agents may not be able to rely on this argument any more.  Whether you have been charged a fee before or after 2012, they are all illegal, and you have a right to claim them back.

So how do I claim my letting agency fee back?

Step 1: Ask Nicely

The first thing you need to do is ask your landlord or letting agency to refund the money, explaining calmly and politely that they cannot legally charge you any additional fees, and that they are required by law to give it back. The best way to do this is send them a letter by recorded delivery, because then they cannot deny that the request was received at their offices.

Here’s a template you can use to write your own letter:

To Whom It May Concern

Administration fee paid for tenancy of [address]

On [date], I signed a lease for a property managed by [letting agency], where I am still currently resident. In order to obtain the tenancy, I was required to pay an administration fee of [fee amount]

It has come to my attention that section 82 of the Rent (Scotland) Act 1984 expressly prohibits landlords or letting agencies from charging their tenants for any fee other than their rent and deposit. Section 88 of the Act states that tenants who have been charged any additional fees are entitled to have this returned, and as such I am asking you to refund the full amount.

If I do not receive a response within 14 days, I will be forced to take this matter to the small claims court.

Yours Faithfully,

[Name]

If you’re lucky, the letting agency might decide that it’s easier just to refund your fees at this stage, but in case they don’t, you’ll need to have proof that you’ve tried to resolve the matter yourself before you can move on to the next step.

Step 2: Raise a Small Claims Action

Going to Small Claims Court sounds a bit intimidating, but it’s really a lot easier than you might think. You don’t need to hire a lawyer because the small claims process is designed so that the average person can represent themselves, and in a case as straightforward as this one, it’s unlikely that you will be asked to argue your case. All you have to do is fill in some forms explaining why the letting agency owes you money, and return them to the Sheriff Court along with the court fee (£15 for claims under £200, or £65 for claims over £200), which you can even claim back from the landlord if you win.

You can download a copy of the form, which is called a summons, from the Scottish Courts website in either MS Word or pdf format (you need form 1b from the list). The form you download will include two copies – the “Pursuer’s Copy” and the “Defender’s Copy” – and you need to enter the same information in both.

Step-by-step guide to the form:

  1. The contact details of the court. For Edinburgh and the surrounding area, that’s:

Edinburgh Sheriff Court and Justice of the Peace Court
Sheriff Court House
27 Chambers Street
Edinburgh
EH1 1LB

0131 225 2525

Edinburgh@scotcourts.gov.uk

  1. Pursuer’s details: that’s you.
  2. Defender’s details: enter the landlord/letting agency’s name and address.
  3. “The pursuer claims from the defenders the sum of [amount] and the expenses of bringing the action.”
  4. 5.a Defender’s solicitor: unless the letting agency’s solicitor has already contacted you regarding this matter, put “none”.

5.b If you have paid the court fees electronically, include the reference here.

  1. This part is completed by the Sheriff Clerk, so leave it blank.
  2. This is your Statement of Claim. The Govan Law Centre have written a template for use in tenancy fee claims, or alternatively, there is guidance on the Scottish Courts website for writing your own.

All other parts of the form will be completed by the court staff.

You can send the completed forms and payment to the Sheriff Court electronically, by post, or in person. If you are concerned about the process, you might find it reassuring to return the form in person (please note that you will be searched on entering the building), as the court staff can check that the form has been filled in correctly, and answer any questions you might have.

Step 3: Wait for a Response

After you have submitted the paperwork, the court will serve (deliver) the summons to the letting agency. They will be given a deadline to respond, by which time they have to either admit liability, or dispute the claim.

In most cases, the cheapest option is for the landlord/letting agent just to give you the refund, so there’s a very good chance that this is what they’ll do. It’s easier for them because it saves them the hassle of going to court over something they can’t win, and it would cost them more to hire a lawyer to help them try to dispute the claim than it would to refund the fees.

Step 4: If You Have To Go To Court

This is unlikely, but if the letting agency dispute the claim, you may need to attend court or appoint someone else to attend on your behalf – this can be a friend, relative, or a representative of an organisation like the Citizens Advice Bureau. You will have several weeks notice if you have to attend court, which will give you time to prepare and seek advice if necessary, and you may even be able to claim for lost wages if you have to take time off work. The Scottish Courts provide guidance for attending small claims court, which includes a list of places that you can contact for free advice.

Remember that even if you have to go to court, the law is on your side. The legislation makes it very clear that it is illegal for a landlord or letting agent to ask you to pay any additional fees, so as long as you can show that what you paid wasn’t part of your rent or deposit, they have no excuse for not giving you a refund. Ideally, you should have a receipt (this is often bundled with your lease paperwork), bank statements showing how much you paid, or correspondence asking you to pay the fees. If you don’t have anything like this, try to get some evidence that the landlord or agent normally charge fees, which should be pretty easy because most of them advertise the fees quite openly.

This all sounds interesting, but why should I bother?

Because it’s your money, and the letting agency have taken it from you illegally. You would complain if you got short-changed by a few pounds in a shop, and the only difference here is that it’s costing you a lot more money.

However, if you claim your tenancy fee back, you’re not the only person who benefits. If enough of us complain, it becomes less worthwhile for letting agencies to continue charging fees, especially if they keep having to pay tenants’ expenses for taking them to Small Claims Court. Every time a claim like this is processed through the courts, it’s helping to show how common it is for letting agencies to charge these illegal fees, by taking up their time, we’re creating an incentive for better enforcement in the future.

 

Disclaimer: This information was provided by EPTAG members who have no legal qualifications, but have made a several successful claims against a letting agents in order to recover letting agency fees which were charged illegally.