Extract from an opinion of counsel on letting agents' fees in Scotland

Fees or charges required by letting agents or landlords from tenants as a condition of the granting, renewal or continue of an assured or short assured tenancy are ‘premiums’ and unlawful in Scotland.

It has been unlawful to require fees in respect of assured and short assured tenancies since the tenancy regime was first introduced in the late 1980s. Due to uncertainty over the legislation which covers upfront charges in the lettings industry and pressure from private tenants, the Scottish Government decided to clarify the definition of ‘premium’ contained in the Rent (Scotland) Act 1984.

This clarification came into force on the 30th of November 2012 and made it plain that the definition of premium includes administration fees or charges.

Due to continuing uncertainty surrounding the law which covers premiums, particularly in relation to fees charged before the Scottish Government’s clarification of the law, Shelter Scotland have sought the opinion of counsel. This is published below. The issues considered in the opinion are the legislation and caselaw which covers premiums, both before and after the Scottish Government’s clarification of the law in November 2012. Counsel’s opinion was also sought on a specific case which called at the small claims court, and accompanying legal opinion, which has been circulated around the lettings industry as ‘precedent’.

We hope this will give private tenants and the lettings industry in Scotland clarity over the issue of tenant fees. Particularly in relation to those which were charged before the Scottish Government’s clarification of the law in November 2012.