Regulation of letting agents is sought by the Scottish Government through a new regulatory framework via the Housing (Scotland) Bill.
Currently there is no statutory regulation of letting agents in Scotland, which means that anyone can set up a letting agency, whether or not they have the appropriate experience or qualifications to do so.
The Bill seeks to introduce a formal register of letting agents, which aims to promote high standards of service and levels of professionalism, as well as giving landlords and tenants easy access to a mechanism that will help resolve disputes where they arise.
At present, Part 4 of the Bill defines letting agency work as "things done by a person in the course of that person's business in response to relevant instructions which are:
(a) carried out with a view to a landlord who is a relevant person entering into, or seeking to enter into a lease or occupancy arrangement by virtue of which an unconnected person may use the landlord's house as a dwelling, or
(b) for the purpose of repairing, maintaining, improving, insuring or otherwise managing a house which is, or is to be, subject to a lease or arrangement"
It will be mandatory for anyone carrying out letting agency work in Scotland to be registered, and any failure to register will be a criminal offence. An applicant to the register must pass a 'fit and proper person' test and similar factors to landlord registration will be looked at, e.g. any convictions for dishonesty, fraud, discrimination, and contravention of housing, landlord and tenant law. There will be a fee to register, as yet to be specified. All registered letting agents will be issued with a registration number to be used on all documentation, and advertisements.
Once registered, all letting agents in Scotland will be required to follow the Letting Agent Code of Practice (as yet to be determined). Landlords and tenants can refer breaches of the Code to the new First-Tier Tribunal for a determination. The letting agent must be given an opportunity to rectify the breach prior to such a referral being made. Where the Tribunal finds that the Code has been breached, they can issue a Letting Agent Enforcement Order setting out steps to be taken by the letting agent, and failure to comply with such an Order is an offence, subject to a fine and/or ultimately, removal from the Register.
If you need any further advice in relation to proposed changes under the Bill and the regulation of letting agents, please contact our private rented sector team.
