Letting agent Code of Practice

From 31st January 2018 any person who carries out letting agency work [1] must comply with the Code.

The Code is intended to help landlords and tenants understand the standards of practice they can expect from a letting agent.  

The Code itself is quite lengthy - only the main areas likely to be useful for advisers have been summarised below. Full details can be found in Schedule 1 of Letting Agent Code of Practice (Scotland) Regulations 2016.

All letting agents must: [2]

• Conduct business in a way that complies with all relevant legislation.

• Be honest, open, transparent and fair in your dealing with landlords and tenants (including prospective and former).

• Provide information in a clear and easily accessible way.

• Apply all procedures and policies consistently and reasonably

• Carry out services provided using reasonable care and skill

• Ensure all staff and any subcontractors are aware of and comply with the Code and any other legal requirements

• Maintain appropriate records. This is particularly important in order to demonstrate that a letting agent has met the Code’s requirements.

• Ensure all private information is handled sensitively and in line with legal requirements

• Respond to all enquiries and complaints within reasonable timescales and in line with any written agreements.

• Inform the appropriate person (landlord or tenant or both) promptly of any important issues or obligations in the use of the property, such as repairs or breach of the tenancy agreement.

In addition, letting agents:

• Must not unlawfully discriminate against a landlord, tenant or prospective tenant on the basis of age, disability, sex, gender reassignment, marriage or civil partnership, pregnancy or maternity, race, religion or belief or sexual orientation.

• Must not provide information that is deliberately or negligently misleading or false

• Must not communicate with landlords or tenants in any way that is abusive, intimidating or threatening. [3]

If a tenant asks in writing for the landlord’s name and address, the agent must provide this free of charge within 21 days. [4]

There are detailed regulations concerning how letting agents should engage with landlords. These are not covered here but can be found within section 3 of the regulations.

Marketing must be clear accurate and not misleading. The agent must have the landlord’s permission and all reasonable steps must be taken to ensure the letting agent’s registration number is included in all property advertisements or communications. The letting agent is also obliged to ensure that other legal requirements are met, for example regarding landlord registration numbers and energy performance certificates.

Tenants must be given all relevant information about a property - for example, length and type of tenancy; the rent; the deposit; other financial obligations such as council tax; any guarantor requirements and what pre-tenancy checks will be required at the outset. [5]

The agent must comply with all relevant legislation, in particular s.82 Rent (Scotland) Act 1984 prohibiting the charging of illegal premiums.

Agents must not, as a condition of granting the tenancy, require tenants to use a third party service that charges them a fee. [6]

In deciding how viewings are conducted letting agents must ensure that they do not unlawfully discriminate against anyone protected by the Equality Act 2010.  

If a tenant currently lives in the property, they must be given reasonable notice of viewings (at least 24 hours) and ensure the tenant is present unless otherwise agreed.

The application process must be agreed with the landlord and applicants must be informed as soon as possible about the outcome of applications.

If references or other checks are carried out these must be explained fully to the applicant and any guarantor and written permission must be provided. Any third party reference service must not charge the tenant a fee. [7] And all private information must be handled sensitively and in line with legal requirements, for example the law relating to data protection.

Where the letting agent prepares the tenancy agreement on the landlord’s behalf they must ensure it meets all legal requirements. The agreement must also include the landlord’s registration number.

The tenant must be given enough time to familiarise themselves with the agreement, raise any questions and seek independent advice before signing. The tenant must be given any signed copy of the agreement along with any other documents required by statue.

The agent must inform the landlord of the statutory requirements on tenancy deposits and if they lodge the deposit on the landlord’s behalf they must ensure compliance with the legislation.

If the agent is responsible for managing the check in process they must produce an inventory (which may include a photographic record) unless otherwise agreed in writing by the landlord. If the tenant is not present when the inventory is made they should be asked to check it and raise in writing any changes or additions within a specific reasonable timescale. The agent must take reasonable steps to remind the tenant to sign and return the inventory.  If the tenant does not, the agent must inform them in writing that they will nevertheless regard it as correct. [8] The tenant must be provided with a copy of any signed inventory.

The agent must have written procedures in place in relation to rent, including how late payments will be handled. Where the agent collects rent on the landlord’s behalf they must as a minimum give the tenant a statement of rent account on request. Where a tenant pays cash they must be provided with a receipt. [9]

When contacting tenants who are in arrears, letting agents must not act intimidatingly or threateningly, nor must they knowingly or carelessly misrepresent your authority and/or the correct legal position. [10]

If keys are held these must be kept secure and detailed records must be maintained regarding their use.

The tenant must be given reasonable notice of an agent’s intention to visit the property and the reason for this. At least 24 hours’ notice must be given unless the situation is urgent or giving such notice would defeat the object of entry. [11]

However, if the tenant refuses access, the letting agent, landlord or any third party have no right to enter the property using retained keys without a warrant. [12] Advisers should note that were a tenant refuses access the landlord may make an application to the First Tier Tribunal in order to gain access. See the section on Landlord applications to the First Tier Tribunal for more information.   

Letting agents are required to have written procedures and maintain relevant records in terms of repairs, maintenance and any obligations carried out in terms of safety regulations. Where the letting agent manages repairs on behalf of a landlord they must have written procedures and processes for this including target timescales for carrying out routine and emergency repairs. [13] The regulations provide more detailed guidance on what is expected from letting agents who manage repairs.

In all circumstances the letting agent must comply with the relevant tenancy law and ensure appropriate legal procedures are followed when seeking to end a tenancy. There must be clear written procedures in place, including where the tenancy is brought to an end (either by landlord, tenant or where a tenancy has been abandoned) and these procedures must be applied consistently and reasonably. A letting agent must not try to persuade or force a tenant to leave without following the correct legal process. [14]

Before a tenant leaves the property the letting agent must inform them of their responsibilities such as the standard of cleaning required and the tenant must be given the opportunity to be present at any check-out visit unless there is good reason not to. For example, evidence of violent behaviour. [15]

Where any deposit is managed on behalf of the landlord reasonable steps must be taken to come to agreement about repayment. In the event of a dispute the scheme regulations must be used.

The agent must take all reasonable steps to ensure that their registration number is included on all relevant documents.  

Enquirers and complaints must be responded to within reasonable timescales. There must be a clear written complaints procedure that at a minimum must be available on request. [16] There can be no charge for handling complaints and records of complaints must be kept for five years.

Agents must make landlords and tenants aware of the Code and give them a copy on request. This can be done electronically. [17]

Agents must not communicate with landlords or tenants in any way that is abusive, intimidating or threatening. [18]

Section 8 of the regulations concerns the handling of client money. The Code requires written records to be maintained and there are detailed regulations regarding any funds held. There are also regulations covering professional indemnity and insurance.

Letting agents are required to notify the appropriate relevant authorities, such as the police or National Crime Agency, if they suspect any person using their services is engaged in money laundering, human trafficking, or another criminal activity. [19]