Housing Minister Keith Brown today confirmed that letting agents should not be charging a range of upfront fees to private tenants.
Currently, under the Rent (Scotland Act) 1984, landlords and their agents can legally charge rent and a deposit only when granting a tenancy.
However, current legislation has not been explicit enough about additional charges such as reference checks, credit checks and inventory fees.
The law will now be clarified so that all tenant charges, other than rent and a refundable deposit, will be deemed illegal.
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
Keith Brown said:
“The majority of letting agents operate in a thoroughly professional manner and play an important role in the Scottish private rented sector.
“However, numerous cases of tenants across the country being ripped off were uncovered by Shelter Scotland.
“As a result of this consultation, we will make it crystal clear to tenants, landlords and their agents that all premium fees, over and above rent and a deposit, are unlawful
“We will now commence the necessary legal provisions to come into force later this year”
Gordon MacRae, Head of Communications and Policy at Shelter Scotland said:
“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 reclaimyourfees.com web site has proved so popular that already more than £100,000 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.”
Marieke Dwarshuis, Director of watchdog Consumer Focus Scotland, said:
“Many tenants have had to pay substantial fees to letting agents and it has often not been entirely clear what all of these charges have been for.
“Clarifying what letting agents can and cannot charge will better protect tenants and should help to ensure letting agents can operate with the trust of tenants.
“An important next step will be making sure that prospective tenants know about the new rules so they can secure the keys to a new home without worrying about being ripped off by extra charges.”