Major letting agencies using "barely legal" leases, says expert

Students are being asked to sign leases which in some cases are "barely legal" and one case "against the law", according to an investigation carried out by The Journal.

An examination of five different student leases by a University of Edinburgh law professor and law students has revealed a number of sub standard elements.

Elaine Tyre, Assistant Director of the Legal Practice Unit, and law students Arezo Darvishzadeh and Christine Tonner examined landlord accountability, as well as problematic clauses hidden within leases.

It was found that many of the leases were in conflict with the Housing (Scotland) Act 2006, which aims to strengthen the rights of tenants and 'repairing standard' for landlords.

All the legal analysts agreed that most of the leases considered were restricted the rights of the tenants. Ms Tonner said: “The intention of the Housing Act was to even out the balance between tenants’ and landlords’ rights.

"Most of these leases are very weighted in favour of the landlord still, and undermine that Act.”

The worst was a lease from a private landlord, but significant issues were also found with larger letting agencies. The best lease was from EH Letting, a small Edinburgh letting agency.

Ms Tyre indicated that the worst lease was “barely legal” and had “absolutely no responsibilities on the landlord in it.”

It states that the tenant cannot leave the property before their date of termination and if they do, they would be liable to pay damages to the landlord to cover any costs incurred.

This would include any advertising and fees for re-letting the property. Usually, two months notice is the legal amount of time a tenant is required to give before leaving the property.

The landlord, however, is only required to give four weeks notice in order to remove the tenant from the premises.

According to this lease, tenants are also liable to insure their own possessions, but the landlord is not legally responsible to insure any of the items within the flat.

Futhermore, the tenant must clean the window internally and externally every six weeks, and meet the costs of any redecoration, damage, “discolouration” and gardening; money to cover this will be taken out the deposit.

Ms Darvishzadeh, who examined the lease, said: "They are contractually opting out of all of the obligations as a landlord, and are deliberately vague.

“It’s just not fair. Some of these provisions are against the law.”

Grant Management’s lease fared a little better under scrutiny, but had significant monetary stipulations written into the contract. If the tenants stay longer than the original date signed for, the company's lease states that the tenants may only be given one month’s notice of a rent increase, when there should be at least six months given.

This leaves the tenant open to unexpected increases in rent.

Debbie Rummens, managing director of Grant Management responded: "Our practise is to only increase the rent at the stage of negotiating a renewal so more than one month's notice would always be given, as this happens a minimum of three months before the end of the tenancy.

"Our understanding is that a month's notice is acceptable during tenancy which is continuing on a month to month basis. If tenants are unhappy with the proposed increase, they have the right to refer the case to the Private Rented Housing Panel."

Grant Management also requires that direct debit is used, and penalises all other payment with a £10 admin fee. If the tenants do incur a cleaning bill, it will be removed from the deposit, and on top of this, there is a £25 charge per person.

Ms Rummens insisted that: "Any additional charges are to cover genuine administration costs that are in line with OFT guidelines."

In fact, most of leases had large administration charges written into them. For example letting agency, DJ Alexander claim four percent interest on late rent payments, on top of a £35 administration fee.

This lease also contained a clause that stops the tenant withholding rent if repairs aren’t carried out. The Journal approached David Alexander, who said: “Those charges are a deterrent, and anyone that has a problem paying us can come see us to discuss their situation.

“The secret of residential letting is keeping tenants and landlords happy in equal measure. It’s our best interests to treat our tenants well, student or executive. Everyone is looked after in the same manner.”

Although the administration charges in the University of Edinburgh student accommodation lease were not as high as in others, some of the stipulations were considered possibly problematic with regard to insurance.

For example candles are not allowed in the premises. Ms Tyre noted: “If students don’t read this clause and use candles, and something happens, the tenants could be liable for all damage caused. And I’m sure many students who let these flats don’t read that and don’t think about the consequences.”

The EH Letting lease was the best one, according to Ms Tonner: “It’s good for landlord obligations. Unlike the others, there are quite a few things the landlord is contractually obliged to do to look after their tenants.”

Ms Tyre suggested that the best way to avoid getting caught in difficult legal situations is to read the leases thoroughly before signing:

“When it says that you must give your landlord written notice when you are away for more than two weeks, and you don’t, kiss goodbye to your deposit, because if anything happens in that time you will be liable for it.”