Friday 5 March 2010

Unlawful tenancy premiums: a tenant's perspective

Here, GLC publishes a client's experience, in his own words, of being required to pay 'service charges' when he let a flat in Glasgow, and how he was able to obtain a full refund.

"When I moved to Glasgow 2 years ago I needed somewhere to stay. Having found a flat in the city through an agent, when I went to sign for it there were the usual rent in advance and deposits to pay but the agent also added £235 for a “service charge”. When I challenged this I was told it was to cover “preparation of the lease, credit checks, preparation of the furniture inventory” and other items they could not remember. It was also made clear that if I did not pay it then they would not sign me up for the tenancy and the whole search process would start again".

"I signed up and paid the £235 but decided to check on its legitimacy while I was a tenant. The charge is clearly a premium which is an unlawful charge in Scottish law. Not only that, but charges to the tenant for preparation of the lease are explicitly prohibited in Scottish law. At the end of the tenancy I again challenged the service charge and requested its return. The manager of the agency advised me that they were free to charge what they liked and it was a legitimate charge. He is wrong on both counts".

"Govan Law Centre clarified the legal position and agreed to contact the agent for me. At this point the agent offered to return £120. This was returned to them requesting a return of the full amount. They later offered £120 again which was again returned and an action for payment was raised at the Sheriff Court under the small claims system".

"The immediate response was for the agent to refund the charge in full and the costs of lodging the claim with the court. However they still maintain this is a good will gesture and they are entitled to charge premiums in this way. Interestingly the letter says “any prospective tenant has a choice whether they wish to take up the services we offer” so clearly they still intend to refuse tenancies unless this premium is paid".

"The message from this claim is that agents and landlords will probably hold out to the bitter end but if challenged through court, will refund your money."


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