Problems with illegal fees and deposits

A security deposit is money paid to a landlord (or a letting agency acting on their behalf) as security against, for example, rent arrears, damage to property or removal of furniture.

If you're asked to pay a security deposit you should check the condition of the property and its contents carefully. When the tenancy ends, you may be held responsible for anything which is missing or damaged, and the landlord might claim all or some of your deposit.

You were charged illegal fees or premiums

Illegal premiums include charges for registering with the letting agency, charges for credit checks and administration fees. Any fees charged by the landlord to create or renew a tenancy agreement are also illegal. 

A private landlord or letting agency might ask for a deposit to secure a property before you sign a tenancy agreement. It's sometimes called 'key money' or a 'holding deposit' and it’s against the law in Scotland. This type of illegal fee is also known as a premium.   

If you paid a holding deposit, you should ask if it’s refundable or if it can be used towards your tenancy deposit or rent.    

If the landlord or letting agency won’t refund your holding deposit  

If you took the tenancy but the landlord did not put your holding deposit towards the tenancy deposit or your rent, this is illegal.   

You can ask the landlord or letting agency to repay these fees up to 5 years after the tenancy has ended. If they refuse, you can ask the First-tier Tribunal (Housing and Property Chamber) to take action. You can find out how to apply to the tribunal on the First-tier Tribunal website.

If you did not take the tenancy, you should write to the landlord or letting agency to ask for the holding deposit to be returned. If a landlord refuses to return your holding deposit, you can raise a court action using the simple procedure. You can find more about how to use simple procedure. If a letting agent refuses to return your deposit, you might be able to raise an action in the First-tier Tribunal (Housing and Property Chamber) because they have breached the Code of Practice. You can find out more about the Code of Practice on the Scottish Government website.

If you need advice before taking action about illegal premiums, contact your local Citizens Advice Bureau. 

You haven't been given an inventory

If the accommodation is let furnished, the inventory is a list of the furniture and other contents which have been provided by the landlord. It's linked with the deposit - if there are damaged or missing items the landlord could take money from the deposit at the end of your tenancy. 

It's best for both you and the landlord that there's an inventory, since it reduces the likelihood of a dispute over whether there are missing or damaged items. 

The landlord or their letting agent normally draws up an inventory. It should list everything, with a good description of the items, including their age if antique or new, and their condition. You should check that you agree with the inventory before you sign and date it. It's good practice for the landlord to give you a copy. 

If the landlord doesn't draw up and agree an inventory, you can draw up one as soon as you get the keys to the accommodation, preferably before you move any of your belongings in. Take date-stamped photographs or videos to show the condition of furniture and appliances if you can. 

If you're visually impaired, you can ask your landlord to provide an inventory in a different format, for example on an audio tape or in Braille. Your landlord may be discriminating against you if they refuse to do this. More about disability discrimination.

The deposit seems too high

Under section 90(3) of the Rent (Scotland) Act 1984, a deposit must not be more than two months' rent. 

You shouldn't be charged other illegal fees or premiums. 

Your tenancy deposit hasn't been paid into a deposit scheme

Most private landlords are required by law to pay tenancy deposits into one of three tenancy deposit schemes. There are some exceptions, like if your landlord is a family member or your tenancy lasts less than 30 days and the landlord does not wish to make any deductions. There's more information about unprotected deposits on the Shelter Scotland website. 

The three schemes are:

• my|deposits Scotland

• SafeDeposits Scotland

• Letting Protection Service Scotland.

The landlord must tell you which scheme holds the money and how that scheme works. They have to do this within 30 working days after the tenancy starts.

If you have agreed to pay the deposit in instalments, the landlord should tell you how much you have paid into the scheme within 30 working days of each payment being made.

If they haven't given you any information about where your deposit is protected, you should write to them to ask for this information. 

If your landlord should have paid your deposit into a scheme but they haven't, you may be entitled to between 1 and 3 times the deposit amount. You need to take a complaint to the First-tier Tribunal about the landlord not complying with the protection rules. But you should consider how safe your tenancy is - some tenants (like private residential tenants) are better protected from eviction in retaliation, whereas others can be more easily evicted by their landlords. 

If you’re considering taking legal action you should consult an experienced adviser, for example at a Citizens Advice Bureau - where to get advice.

How to get your deposit back at the end of a tenancy

You should get it back if you’ve left the property in a good condition and with no rent arrears or unpaid bills. Your landlord cannot try to charge you for reasonable 'wear and tear' of any fixtures, fittings or furniture. 

If there's a clause in the tenancy agreement covering the deposit you might be able to challenge it because it's unfair, for example, a clause which doesn't allow for fair wear and tear.

If there's no inventory when you move in, your landlord could find it more difficult to keep part of your tenancy deposit to carry out repairs if they can't prove the condition the property was in when you moved in.