Review of The Private Housing (Tenancies) (Scotland) Act 2016
Did the new dawn come with a red sky?
Significant changes to tenancy agreements came into effect on the 1st of December 2017.
The first change to housing legislation in 29 years since the 1988 Housing Act is inevitably a major event, but what’s the verdict on the detail and what are the changes to be aware of?
- From 1 December, a residential lease will be a Private Residential Tenancy.
- Short Assured and Assured Tenancies entered into before 1 December will continue but no new ones can be created. No more AT5 notices!
- The period of lease will be open-ended.
- Misbehaviour by either Tenant or Landlord will have consequences – either through grounds for eviction or a Tribunal which can be accessed by either party.
- Correspondence can be done (with agreement) electronically – including all notices.
- The Scottish Government has reacted to pressure to increase the level of security of tenure for residential tenancies in the private sector while also offering safeguards for landlords and lenders.
- There is now a Model Tenancy Agreement. Our last tenancy stood the test of time for a quarter of a century; it included many of the issues now addressed anyway so we have incorporated the changes into our ‘model agreement’ instead.
- The new Private Residential Tenancy (PRT) ends the straightforward ability to end a tenancy without needing to show fault.
- There are extended grounds for terminating a tenancy.
- A new ‘Notice to Leave’ – now 12 weeks (previously 40 days).
- Subletting (historically disallowed) can give rise to the creation of a PRT. This is relevant to sharing rooms in flats or occupancies of farm cottages.
Higher standards & Mutual respect
The changes are designed to bring clarity to both parties and ensure a higher standard of letting affecting agents, landlords and tenants (though the opportunity was there in part when landlord registration was introduced). Respect lies at the heart of the new agreement with fewer places to hide if any try to abuse the system. For instance:
- Gaining access to a property now requires 48 hours’ notice.
- Rent increases can happen only annually with a potential for capping in certain areas.
Terminating a tenancy
- There are now 18 grounds to terminate a tenancy (one more than before) in Schedule 3 of the Act.
- Split as before between mandatory and discretionary or a blend of the two.
- Seven have been discarded from the old list but in their place, there are nine that are new or strengthened.
- Safeguards against anti-social behavior and overcrowding.
- New ground if a landlord simply wants to sell.
- Rent arrears is one of the grounds that is a blend of mandatory and discretionary.
- A First Tier Tribunal (FTT) replaces the Private Rented Housing Panel for taking any dispute. We shall have to hope that this is quick, straight forward and fair.
- Should a tenant remain at the property after the Notice to Leave has expired, the process to get vacant possession involves an application (free) to the Housing & Property Chamber of the FTT.
- The question of reasonableness needs to be addressed if the ground for eviction is based on a discretionary ground.
Certification – Duty to share information
Copies of certification must be given to tenants (option to do this electronically) for the following.
- Landlord registration
- Energy performance
- Electrical and gas safety.
Many of the changes are helpful, however it will be interesting to see if the new arrangements are fit for purpose; we shall have to see how the market reacts. The concern is that the sector contracts and supply and demand could lead to increased rents – the reverse of what was hoped for by policy makers.
What is likely to happen as a consequence of this shake-up is that there is no hiding place for misbehavior. The process is intended to be handled professionally. As regulated professionals – actually that suits us just fine.