The Students' Representative Council (SRC) have challenged a West End letting agency who have been charging prospective tenants, including students, illegal holding deposits and reference fees. Cairn Letting have since made adjustments to their application process, but are continuing to charge holding deposits.
Cairn Letting charge their prospective tenants holding deposits of £500 per flat to ensure the reservation of the property for two weeks. After the two weeks, the £500 goes towards the property's deposit, which is refunded to the tenants at the end of their tenancy. However, if the prospective tenants withdraw their application within those two weeks they risk losing all or part of the holding deposit.
There is also the concern that prospective tenants might lose money if Cairn decide to terminate proceedings at the application stage, for example if any of the guarantors are found to have adverse credit information.
Glasgow Guardian heard from one student who almost lost her entire £500 deposit. Becky Cutler, a fourth year psychology student, pulled out of proceedings with Cairn this October after finding a flat elsewhere, and Cairn refused to refund the deposit.
She claims she "specifically asked if we decided not to go through with it, would we lose it" and was told it would be "refundable on a daily basis of how long the flat has been off the market for, which was two working days." Cutler never signed the lease for the property.
She contacted the SRC and emailed Cairn, who eventually agreed to refund £250, to which she replied again demanding the full sum back, citing the Rent (Scotland) Act 1984 and government information which states that holding deposits are illegal. Cairn subsequently refunded the full £500 within a few days.
Cutler commented: "I would encourage anyone who is in a similar situation to quote the 'Rent (Scotland) Act 1984' and ask for their money back. What Cairn are doing is essentially taking advantage of students who are desperate for accommodation at this time of year."
Cairn also used to charge a £48 reference fee for a "comprehensive reference check" including a credit check of guarantors. While tenants had the option of providing their own credit information and avoiding the fee, Glasgow Guardian heard from students who felt paying it was the easiest way to complete the application process in time.
Joseph Lee, a third year student who lived in one of Cairn's properties in his second year, had to pay for his reference check. He told the Glasgow Guardian: "They charged me a fee for checking my references; it annoyed me at the time, but we had looked for a flat for weeks and just wanted some peace of mind. I was desperate to secure the flat."
However following their correspondence with the SRC and subsequent consultation with their solicitor, Cairn have removed this from their application documents.
SRC President Breffni O'Connor told the Glasgow Guardian: "We first approached Cairn in June of this year as we had become aware that they were charging prospective tenants administration fees and also taking holding deposits, both of which are illegal under the Rent (Scotland) Act 1984.
"Initially we entered into a discussion with Cairn about them altering the terms & conditions they issue new tenants with and they removed all references from these terms & conditions to charging administration fees.
"Unfortunately they have been reluctant to stop charging holding deposits despite the fact they are clearly breaking the law by doing so."
Under the Rent (Scotland) Act 1984, landlords and letting agents can only charge tenants for rent and a deposit, the latter being refunded at the end of the tenancy. In 2012 the Scottish Government clarified the law to deal with ambiguities in the legislation, which had not been clear about additional charges.
The Rent Act has now been clarified so that all "premiums", such as charges other than rent and a refundable deposit, are illegal.
O'Connor added: "It's both disappointing and upsetting to see students being taken advantage of by companies in this manner as they are relying on prospective tenants being unaware of the law and their rights."
She warned: "We strongly discourage students from renting from any landlord or letting agency who charge these types of illegal fees. If you have paid any extra fees on top of deposit or rent please visit the Advice Centre and talk to them about how you can reclaim these fees."
The Glasgow Guardian spoke to Tim Weir, a lawyer who works for Thompsons Solicitors. Weir has set up a free helpline for students who want legal advice about renting. He warned that many students are not aware of their rights before viewing properties, commenting that many students entering the rental market "feel coerced into it [signing unfair contracts]" and as such "nobody holds the landlords accountable."
When asked about Cairn's insistence on a holding deposit, Weir noted: "The tenancy deposit regulations are pretty clear that the deposit on the flat is the deposit on the flat."
Cairn Letting are maintaining their position however, and gave the Glasgow Guardian a statement saying: "The Holding Fee is fully refundable (should the tenancy agreement not go ahead) and is only used to secure a property so it can be taken off the market.
"Should the tenant(s) follow through with the tenancy agreement, the holding fee becomes part of the deposit required for the tenancy. Therefore, there are no fees taken that shouldn’t be taken. By securing the holding deposit, it gives comfort to the tenant(s) that the property is secure for them."
The SRC provide advice for students who are unsure of their renting rights. More information can be found here. Tim Weir's free helpline is available on 0141 565 1225.