Following the recent consultation on the issue of premiums, the Scottish Government decided to continue the prohibition on premiums.
The Scottish Government intended to pass Regulations on this issue which many letting agents were hoping would provide greater clarity to the existing legislation.
Yesterday, the Scottish Government placed before Parliament a Scottish Statutory Instrument entitled the Private Rented Housing (Scotland) Act 2011 (Commencement No. 4) Order 2012. Despite such a grand title, the Statutory Instrument simply seeks to bring into force the provisions of Section 32 of the Private Rented Housing (Scotland) Act 2011 with effect from 30 November 2012.
What does this mean?
Essentially, Section 32 of the 2011 Act amends Section 82 of the Rent (Scotland) Act 1984, which has the general prohibition on premiums. In essence, the only real change as a result of the bringing into force the remaining provisions of this section is that the definition of “premium” is extended to mean :-
“Any fine, sum or pecuniary consideration, other than the rent, and includes any service or administration fee or charge”.
Further to this the Scottish Government also placed before Parliament another Statutory Instrument entitled The Rent (Scotland) Act 1984 (Premiums) Regulations 2012 which simply stated that if tenants are paying for a “green deal plan” for energy efficiency improvements under the Energy Act 2011 such payments are not a “premium”. So this is an express exemption from the general prohibition and definition of a premium.
We spoke with the Scottish Government department who had responsibility for the consultation and they have confirmed that the Scottish Government does not intend to pass any further Regulations on this issue at present or provide any further guidance.
If letting agents or landlords are unsure as to what charges are lawful or not or require any advice on this please feel free to contact one of the members of our Housing and Private Letting Team who will be happy to discuss matters with you.