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Presently in Scotland it is illegal for any party to charge fees to a prospective tenant or present tenant to obtain or maintain a tenancy agreement. The spirit and ethical direction of this policy is to stop tenants from being exploited in regard to being able to rent freely and fairly.
Unscrupulous landlords and letting agencies are currently acting against the spirit of this policy. This means that the policy needs redefining to include an explicit ban on referencing fees or any fees relating to obtaining information about a tenancy that has come to an end.
When speaking with letting agencies, we have been made aware that some have taken legal advice on the matter of charging current or ex-tenants for a reference and found that it is within the boundaries of the law.
Letting agencies, landlords and hall operators are currently not required to charge for references under the law, many do so as a way of recuperating costs incurred by a tenancy.
For example, one letting agency in Dundee justified their use of a £25 referencing fee as “covering the cost of finding information about the tenant, writing a letter and emailing it to them.” There is no evidence that this justification has been costed at £25, which is a ludicrous valuation of approximately five minutes of administrative work.
This shows to us that referencing fees are being used for two reasons: firstly, to profiteer from tenants who are unaware that the spirit of pre-existing laws is for them not to be hindered by fees in a tenancy. Secondly, they are being used to justify a ‘premium service’ element in the industry.
In practice, the latter means that these property owners and operators are utilising their “word” to exclude tenants from obtaining new tenancies without paying an indirect premium fee. The reason that this premium is indirect is because the property owner or operator charging this fee is not directly, or “on paper”, inhibiting a tenant from obtaining a tenancy. However, in practice all new property owners or operators would expect a reference from a previous landlord as justification for granting a new tenancy.
Tenants and landlords are equal partners in a tenancy agreement. Referencing fees are a perpetuation of an unfair relationship between renter and landlord. A reference letter is not worth more because it was paid for. It's the moral thing to do to drop referencing fees.
Your support will help us to develop a strong campaign to act against referencing fees and lobby for a change in law.