CAMPAIGNERS were celebrating yesterday after a landlord was ordered to repay £7500 to a tenant over a “sham” holiday let in Edinburgh.

Scotland’s tenants’ union Living Rent brought the case to a First-tier Tribunal and claimed that other landlords were using the loophole to avoid tighter regulations covering regular leases. It said the first victory of its kind set an important legal precedent that would “empower tenants to fight back”. Although the landlord had required the tenants to sign a “holiday let” lease, the tribunal said it was unenforceable.

The case related to the landlord’s failure to protect the tenants’ deposit on taking up the lease.

Under normal agreements, landlords are required by law to protect deposits in a third-party scheme, but in this case the landlord argued the lease was a holiday let and therefore he was not obliged to.

However, the court rejected this and fined him the maximum possible.

Earlier this year, Living Rent published a report claiming that many landlords were using such “sham” holiday let leases to avoid regulation and legal responsibilities.

Such agreements do not give tenants the same protection from eviction or deposit deductions, and the properties are not required to have the same health and safety regulations, like in houses of multiple occupation (HMO) licences. In addition, holiday let landlords are not required to register, which means that those struck off the landlord records could continue to rent properties as holiday lets.

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Gordon Maloney, who led the Living Rent action, said: “This case is an important victory for tenants and sets a clear precedent: landlords cannot simply pick and choose which laws apply to them, and no amount of coercing tenants into signing sham leases can change that. We know there are other landlords in Edinburgh doing the same thing, and this should be a warning to them that the gig is up.

“The whole case, however, underlines the urgent need for further regulation and clarity on holiday lets. People shouldn’t have to be experts on Scottish housing law in order to find somewhere safe to live, and it should not have required tenants to undertake ten months of legal action to get this verdict. If the government is serious about protecting tenants, they need to regulate and crack down on holiday lets now to avoid anything like this ever happening again.”

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Jac, a tenant in the Royston Terrace flat, added: “This case has clearly shown that many landlords will do anything in their power to avoid their responsibilities and disregard tenants’ rights. The choice to try and make this flat a ‘holiday-let’ was a very conscious choice by the landlord, who wasn’t even registered, to rip off tenants without having to face any legal repercussions. Luckily in our case, the landlord also under-estimated how powerful the tenants can be when they fight together.”