Over £125m is owed to thousands of tenants in Scotland as “part of an illegal letting fees scam” that could “trigger an avalanche of PPI-style payouts.”1
The Scottish Sunday Express newspaper made these accusations at the weekend. Additionally, a petition has been released on the Downing Street website to ban fees in England.
This petition requests that all fees charged to tenants, including referencing checks, administration, and inventories, should be prohibited.
Agents could Face Ruin over Fee Refunds
Within Scotland, the Sunday Express explains the legal enforcement of a relatively unknown law, made 28 years ago, which makes it illegal for tenants to be charged any fees in the renting process, excluding rent and a deposit.
Last week saw the law come into widespread effect.
The Sunday Express went on to say that the introduction by ministers did not attract much attention, although housing charity Shelter Scotland have since led a campaign supporting the move.
Gordon MacRae, Head of Policy at Shelter Scotland, says: “This is the newest mis-selling scandal to hit Britain; you could say that this is going to be the new PPI.”1
The campaign, titled Shelter’s Reclaim Your Fees, hopes to add to the 1,500 tenants who have already recovered over £280,000. They also revealed that 90% of Scotland’s 500 letting agents have been illegally charging fees to tenants on about 135,000 lets a year.1
Shelter Scotland have also provided existing and former tenants with a standard letter to send to their agents, and have directed tenants to take their claim to the small claims court if it is rejected.
The Sunday Express admits that the move may lead to some letting agents having to close, and the Association of Residential Letting Agents (ARLA) says that jobs could be lost.1
Letting agents Countrywide says that they will battle any claims: “The amendment to the legislation does not amount to a statement of law from the date of the original Act and certainly does not attempt to make the provisions apply retrospectively. Any fees charged prior were lawful.”1
However, a Scottish Government spokesperson says: “The rights of people who may wish to claim back illegal charges are not affected by the clarification of the law.”1