Letting agents may go bust as illegal fees campaign takes off

Letting agents may go bust as illegal fees campaign takes off

14:52 PM, 24th May 2012, About 12 years ago 10

Text Size

Landlords are warned to check out that their letting agents protect their money as a new scheme helping tenants reclaim unfair fees threatens make some firms go bust.

Housing charity Shelter Scotland is leading the campaign against rip-off letting agents – and has helped more than 100 tenants start claims for the repayment of thousands of pounds of illegal charges.

On the first day of the campaign, 600 tenants contacted the charity, with 73 starting claims for repayment of £11,700.

Shelter is warning landlords that paying refunds could put a financial strain on some letting agents who do not have the cash reserves to settle grievances with tenants.

Letting agents outside a recognised money protection scheme like SafeAgent or ARLA (Association of Residential Lettings Agents) may close leaving landlords out of pocket.

Shelter Scotland says misinterpretation of the law under section 82 of the Rent (Scotland) Act 1984 of what should be classed as a premium and how to deal with agents who break the law is leaving thousands of people open to unfair treatment and financial exploitation.

The charity gives examples of the charges which could be considered premiums:

  • Credit checks – fees for carrying out credit checks
  • Reference checks – fees for carrying out reference checks
  • Inventory fees – charges for checking and preparing an inventory
  • Renewal fees – any administration charge to renew an existing tenancy
  • Holding fees – any non-refundable holding fees or similar payments for the grant of a tenancy
  • Copies of the lease – charges for duplicate copies of a lease
  • Transfer fees – a payment to formally transfer or assign a tenancy to someone else
  • Overpriced furniture – sale of furniture to a tenant for an excessive price

Graeme Brown, Director of Shelter Scotland, said: “Over 272,650 families and individuals in Scotland call the private rented sector home, and that number is rising.

“That some letting agents – established and new – are routinely ripping off tenants by charging extortionate and unjustified upfront fees is shocking and quite simply exploitative.

“They are not only ripping off people who need a roof over their head and who, in many cases, have little or no choice but to pay up, but they are also undermining the work of good letting agents who offer a fair deal to tenants.”

For more information about the campaign, visit the Shelter Scotland website

Share This Article


17:58 PM, 24th May 2012, About 12 years ago

Some of these are excessive, some are fair game. For example - reassigning a tenancy. Have you ever tried to get a reassignment done on a 10 bed student let? You need to get all tenants (incoming and outgoing) at the same time to sign a deed of assignmnent.

One genuine problem is agents are ultra competive on their management rates bu a dominant position allows a few to ramp up the tenant charges. The only time I can see a tenant sign Ho fee costing 400 is if the rent is £40k a week.

18:44 PM, 24th May 2012, About 12 years ago

Is this about '
extortionate and unjustified upfront fees' to tenants, or any fees at all to tenants? Is Shelter saying that any agent charging a fee to a tenant is ripping them off?

Mark Alexander - Founder of Property118

19:37 PM, 24th May 2012, About 12 years ago

Hi Jan

I stand to be corrected but I believe a law exists in Scotland, but which has been ignored for years, which makes it illegal for Letting Agents to charge fees to tenants. The Scots are really clamping down and are also in the process of introducing compulsory custodial Deposit Protection. It's going to be a blood bath!

19:26 PM, 25th May 2012, About 12 years ago

Glad we're in England then!

Ben Reeve-Lewis

9:16 AM, 26th May 2012, About 12 years ago

And the Welsh this week announced proposals to licence and regulate landlords, which is interesting. Its as if the ghost of Rugg is still hanging around, despite English parliament saying they will not regulate.

You have to ask why. Is Shelter's campaign and the thinking that is out there in society having an effect? Are common and repeated stories of letting agents going bust getting into wider consciousness? Are programmes like Channel 4s Rogue Landlords supporting a groundswell?

I appeared in the Channel 4 follow up, I acted as researcher for their last one on property conditions and since then I have been appproached by no less than 3 other TV production companies looking to do programmes and series on housing, a pilot for one I filmed 2 weeks ago and am meeting Panorama next week about a housing edition.

Why are so many TV companies wanting to do stuff on housing?

All this seems to me to suggest that the public's attention is turning to our world, it's ceasing to be a little corner of life and actually moving centre stage, rather than Cameron simply stating it is.

17:59 PM, 26th May 2012, About 12 years ago

Housing should always have been centre stage.
What are councils going to do when hunbdreds of thousands of Greeks and Spanish present themselves in the UK  as homeless.
Pity anyone on a council waiting list.
These EU migrants will take precedence as they will be deemed to ne in greater housing need.
If you think housing is in dire straits now, just wait til the Greeks start coming.
And they won't be bearing any gifts!!, they will expect the full range of the wonderful world of UK benefits which will be paid out by the DWP and councils.
Uk taxes will have to go up to pay for all the EU migrants and the benefits they will be given.
It is about time that the free movement of labour in the EU was stopped.
We are full up and cannot afford anymore
Plus they are not needed.
EU migrants should be turned back at the UK border.
We don't want them or need them.
We have millions of UK nationals underemployed and unemployed not to need any low skilled EU migration.
Will any of this happen.
Prepare for conditions to worsen even more in the social housing sector and property available for UK national LHA claimants.

Ben Reeve-Lewis

19:46 PM, 26th May 2012, About 12 years ago

I know. I have been listening to radio 4 today and heard how the government is setting plans to deal with the fallout of the Eurozone crisis if people from the EEA, who have a right to housing services, fetch up on our shores, fleeing the fallout of their own country's fiscal system.

We do indeed live in interesting times.

This week I read of well-heeled French people fleeing a socialist government and also Greeks abandoning a sinking ship.

Think Jugaad though Paul. Instead of focussing on the problem hjow can we make it work?

Mark Alexander - Founder of Property118

21:00 PM, 26th May 2012, About 12 years ago

A pessamist sees the difficulty in every opportunity whereas an optimist sees the opportunity in every difficulty.

Ben Reeve-Lewis

21:13 PM, 26th May 2012, About 12 years ago

Yes. Do you know that the Chinese use the same written character for crisis and opportunity?

I keep banging on about this Mark but we need to always look at what can be done, not the obsatcles. Working that way you can get some fantastic and radical ideas. In that sense we should be celebrating these developments.

Look at Trevor Ballis and his wind up radio. the more restrictions we get dumped with the more creative we get. It is human nature.

It is also human nature to gripe. We have a choice

0:13 AM, 27th May 2012, About 12 years ago

I just can't see the juugard principle working. for housing.
It would have been thought of by now.
Having a massive influx of EU migrants is hardly going to be the catalyst for imaginiative ideas.
The ONLY solution is to stop giving QE money to the banks and embark on a mass housebuilding programme to equal the 60's.
Give the money to the housbuilders to build but at cost only.
No profits to the builders, just BUILD.
There needs to be assurances that this social accommodation will NOT be given it imigrants ,  EU or otherwise.
UK nationals should have precedence in social housing.
I am afraid the only way we can ensure govt social housing goes only to UK nationals is to imposed border controls on all immigrannts.
We do not need anymore from anywhere unless they are highly skilled.
We have enough idiot unemployed to fill all the low wage jobs.
Housing infrastructure is the best way of injecting demand into the UK economy.
Only govt money ansd pressure will force the issue.
New towns need to be created and expansion of others needs to occur.
I think there is something like 10 million of pent up demand for social housing.
Just imagine demand for 10000 sofas and cookers.
Trouble is most of the household goods will come from China.
I think only Agas are made in the UK now.
None of this will occur and as a consequence the national debt and defecit will continue to increase massively with the burden being imposed on the hard pressed tax payer.
Those on benefit will continue to coin it in without having to bother working.
What a sad state of affairs the UK is in.

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership


Don't have an account? Sign Up

Landlord Tax Planning Book Now