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Letting Agent Code of Practice – Written rules and what it means for tenants

Letting agent has a discussion with two tenants, a young man and a young woman, on a sofa
James Mullaney
Written by James Mullaney

It is now a year since the Letting Agent code of practice came into force, setting out what is expected from letting agents managing properties in Scotland.

A recent case in Dundee has shown how these changes are starting to benefit private renters.

“Failure to Occupy”

The case involved a student renter who applied to become a joint tenant of a property with 5 other co-tenants. She signed an application form in February 2018 and paid her share of the tenancy deposit. The date of entry was set for 26 July 2018 however, she contacted the agency in early May 2018 to advise that she would no longer be able to take up the tenancy.

She was told by the letting agent that she would remain liable for rent until a substitute co-tenant was found. She found no mention of any charges for finding a replacement tenant in her paperwork though.

In late June 2018 the agency informed her that they would be returning her deposit less £150 for “extra administration work” as a result of the applicant “pulling out” of the lease.

Application to the tribunal  

She applied to the First-tier Tribunal for Scotland (Housing and Property Chamber) to look at her case. The tribunal looked at the evidence and agreed that there was no justification for the agency to deduct an amount from the deposit because of the prospective renter’s “failure to occupy” the property.

Whilst the tribunal accepted the letting agent’s argument that the part-deposit withheld was not a premium, they judged that the agent had failed to return the prospective renter’s money in a timely manner. Importantly, the client had proof that she had made the deposit payment and an email trail confirming a timeline of events which was helpful in informing the tribunals decision.

The email evidence also showed that there was no mention by the agency of any charge for viewings to find a future tenant for the property – let alone a breakdown of how the suggested administration charge had been calculated.

The letting agent had no written complaints procedure either, a further breach of the code.

Tribunal Decision

The tribunal took the view that the prospective tenant should have the £150 part-deposit returned to her. The agent was also ordered to compensate the prospective renter £75 for the inconvenience of the unexpected charge. The Letting Agent Enforcement Order (LAEO) also stated that the agent should make their prospective renters aware of the code of practice and create a written complaints procedure. It’s against the law for a letting agent to not follow the instructions of an LAEO and they can be prosecuted if they ignore it.

Important Points

This decision highlights some important points for prospective renters:

  • Always get it in writing – you then have a paper trail if things go wrong!
  • Written proof – get receipts when paying in cash
  • An internal written complaints procedure must be available to you if needed
  • The letting agent should make you aware of the Letting Agent Code of Practice before you move into a property
  • Letting agents can only ask prospective tenants to pay for rent and a refundable deposit (which can’t be more than 2 months’ rent)
What else does the code say?

The Letting Agent Code of Practice covers a wide range of areas relating to how a property is:

  • Let (eg. advertising, viewings, moving a tenant in)
  • Managed (eg. rent collection, property visits, repairs)
  • Ended (eg. check out, tenancy deposits, bringing tenancy to an end)
  • Administered (eg. complaints, money handling, communications)

The first step if you have a problem with your letting agent is to put your complaint in writing and the agent must respond in line with their complaint procedure.

If you feel that the response is not satisfactory, then you can approach the First-tier Tribunal.

If you have any questions about the tribunal or the new code for letting agents, please check our web advice or get in touch:

https://scotland.shelter.org.uk/privatetenants