An undercover investigation has revealed the shocking widespread practice of some letting agents in Scotland charging private tenants extortionate and unjustified upfront charges.

Shelter Scotland’s ‘secret shopper’ campaign investigated 29 letting agents, many of which have multiple offices across Scotland, and found that 90% demanded high upfront fees to tenants for services like credit checks and paperwork to process applications.

The housing and homelessness charity says such high fees can be illegal under section 82 of the Rent (Scotland) Act 1984 and are a giant obstacle for prospective tenants to overcome when they already face paying rent and a deposit before they even get the keys to their new home.

Shelter Scotland says that disproportionate fees by unscrupulous letting agents for credit checks, drawing up a lease and renewing a tenancy are making it even tougher for hard-pressed people to find affordable accommodation in the private rented sector (PRS). The charges are particularly unjustified considering that landlords are often also paying agents for the same services.

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Graeme Brown, Director of Shelter Scotland, says: “That some letting agents – established and new – are charging extortionate and unjustified upfront fees is shocking. They are not only ripping off desperate 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.

“New legislation clarifies tenant’s rights and the government must make it clear that all charges above rent and a reasonable deposit are unlawful. Only then will tenants, and indeed landlords, be assured that they are not being exploited.”

The charity says that current legislation leaves people who make up so-called ‘Generation Rent’ - who have little prospect of owning their own property – exposed to exploitation by letting agents. According to Shelter Scotland people who have little choice but to rent are often so desperate to secure a tenancy that they have little choice but to pay up to these agents.

Shelter Scotland says thousands of people are leaving themselves open to unfair treatment and financial exploitation simply because they are not aware these charges are illegal. The charity wants new laws to be implemented that make it clear that all charges to tenants are unlawful.

Graeme Brown added: “Times are hard enough for many people right now and the last thing they need is to be fleeced by unscrupulous letting agencies in their search for a home.”

(GK)