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Unlawful letting Fees in Private Rental Sector continue despite first court case

The first case of lettings agents charging private rented housing tenants unlawful fees concluded in Aberdeen Sheriff Court at the end of November with the defendant being found guilty. Despite this, there remains some uncertainty regarding fees and a number of letting agents continue to decline refunds of charges previously made, or to request fees from current prospective tenants.

In the Aberdeen case, an administration fee of £125 plus VAT was charged to Michael Cross and three others by Aberdeen University in 2009. The defendant claimed the 2011 Act extended premiums to include administration fees and therefore prior to this they were lawful. The defendant was found guilty on the basis that the 2011 Act clarified the premiums but did not amend them. The fee plus interest and expenses were payable to the pursuer. 

This sets an important precedent regarding tenancy agreements entered into before the Private Rented Housing (Scotland) Act 2011 clarified the position on charging premiums during letting agreements which was originally set out in the Rent (Scotland) Act 1984. Therefore, as well as no premiums currently being charged, any premiums paid prior to the 2011 Act should be refunded. To be clear, a premium is anything other than the deposit and rent. Examples may be a fee to register with the agent, a fee for them to produce the tenancy documents, and fees for a credit check or inventory.

It is vital that these unlawful fees and poor practice are stamped out in order to ensure the private rental sector improves its reputation and lettings agents’ reputations are not unfairly tarnished by the few who are refusing refunds or continuing to charge fees.


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