Scots tenants paying 'illegal fees' to letting agents

Letting agents across Scotland are making illegal charges to prospective tenants, housing charity Shelter has discovered.

Many tenants who took part in a survey were not aware they did not have to pay the extra charges, the charity said.

The law currently prohibits prospective tenants being charged "premiums" on top of their deposit and rent in advance.

But Shelter said most letting agents surveyed charged a pre-tenancy cost, in some cases up to £180.

"This is rip-off Scotland," Shelter Scotland director Graeme Brown told BBC Scotland.

"Just at a time when people are desperately trying to find a house and families are trying to build a home - and we know how difficult it is to get a house - people are being forced to find even more money.

"This is an illegal action being taken by letting agents."

Among other charges, uncovered by Shelter in its "mystery shopper" exercise, were administration fees for drawing up a lease or obtaining a credit reference.

But the charity said there was little awareness among tenants that such charges could be challenged.

Mr Brown said: "This is a business cost that should fall to either the agents themselves or the landlord.

"This should not be falling to the individual tenant.

"We have had costs as high as £180 charged to individuals and families. That is unacceptable."

Shelter Scotland has called for greater clarity in the law.

Mr Brown added: "The Scottish government have the opportunity to make it absolutely clear that this practice is illegal and has to stop."

New legislation comes into force next year, but some letting agents have said they believe it will allow them to continue charging premium fees.

A spokesman for the Scottish Government agreed that illegal premiums were unfair and could prove a barrier to people getting into rented accommodation.

He said: "We are determined to end this practice and have put in place the initial legislation to do so.

"We are now actively working on defining for legal purposes exactly what an illegal premium is.

"It is important we get that legal definition right, and we will seek parliamentary clearance of our proposal early next year.

"To provide further protection for tenants and those seeking accommodation, the Scottish government and its partners on the national Private Rented Sector Strategy Group are examining the case for regulation specific to (letting) agents."