We have a new website go to gov.scot

Private Rented Housing (Scotland) Act 2011 - Section 32 (Premiums) EQIA

Listen

Annex A

EQUALITY IMPACT ASSESSMENT - SUMMARY

Directorate: Division: team Housing, Regeneration, the Commonwealth Games and Sport Directorate

Housing Options and Services Unit

Private Rented Sector Team
Title of Policy Rent (Scotland) Act 1984 (Premiums) Regulations 2012
Date of completion of EQIA 2 October 2012

Background

A range of stakeholders have voiced concern about the lack of clarity regarding charges made to tenants for setting up a tenancy by agents or landlords. Under section 82 of the Rent (Scotland) Act 1984 it is an offence to require any premium as a condition of the grant or continuance of a protected tenancy. The provisions in section 82, 83 and 86 to 90 of the 1984 Act are applied to assured tenancies with modifications, by section 27 of the Housing (Scotland) Act 1988. A 'premium' is defined by section 90 of the 1984 Act as including any fine or other like sum and 'any other pecuniary consideration' in addition to rent.

Although it should be clear that this legislation prevents the making of any charge apart from rent and refundable deposit (not exceeding two months' rent), there appears to be considerable confusion. Some letting agents interpret the law as meaning that it is illegal only for a letting agent to charge a fee specifically to grant the tenancy, whereas others take the view that any fee (other than rent or a refundable deposit) charged by an agent is illegal.

The overall objective is to clarify the law in relation to charges made to tenants by landlords and letting agents who act on their behalf.

This policy contributes to the Scottish Government's work on improving standards and quality within the Scottish private rented sector.

The objective fits with the Scottish Government's strategic 'Safer and Stronger Scotland' objective. This helps local communities to flourish, becoming stronger, safer places to live, offering improved opportunities and better quality of life.

The EQIA is based on evidence and information gathered from:

  • the Scottish Government's 2009 Review of the Private Rented Sector;
  • engagement with a number of industry and consumer representative bodies; and
  • the analysis of a consultation on the charging of premiums in the private rented sector.

Key Findings

The Rent (Scotland) Act 1984 (Premiums) Regulations 2012 clarify the existing law that all charges in relation to the grant, renewal or continuance of a tenancy (apart from rent, a refundable deposit and charges in relation to the UK Government's Green Deal) made to tenants (regardless of their age) are illegal.

We believe that clarification of the law on premiums will remove significant financial barriers for some people (across the equality strands) in accessing privately rented accommodation. The regulations will provide clarity and prevent tenants being charged a wide varying range of fees that currently act as a significant barrier when accessing privately rented accommodation.

We do not consider that there will be any negative impact in relation to the equality duty, as a result of the law being clarified in relation to premiums.

Conclusion

Through our engagement with a range of stakeholders (both face-to-face and through the consultation process) and our analysis of the evidence available, we have identified that no negative impacts in relation to the equalities duty exists.

Positive impacts have been identified in relation to the existing law on premiums being clarified through the implementation of section 32 of the Private Rented Housing (Scotland) Act 2011. The law clarification will ensure that certain groups, in particular;

  • young people;
  • lone female parents; and
  • ethnic minorities (including migrant workers)

Will no longer face substantial financial barriers when attempting to access privately rented accommodation.

The Scottish Government is fully aware of the need to clearly communicate this law clarification to as wide a range of groups as possible. Therefore we will continue to work with key stakeholders such as Equality Organisations, Citizens Advice Scotland etc. to help ensure that those with protected characteristics are more likely to know their rights in relation to premium charges within the private rented sector.