The first change that takes place is the introduction of the Private Residential Tenancy (PRT) on 1st December 2017.
Short Assured Tenancies in Scotland (SATs) will slowly become a thing of the past which is the tenancy agreement that was used pre 1st Dec 2017 to let property and now all new tenancies after 1st December 2017 will be let on the new Private Residential Tenancy (PRT).
However, all existing Short Assured Tenancies will continue until they are either terminated by the current tenant vacating or if the Landlord serves the appropriate notices on the tenant to vacate.
This means that if you have an existing tenant they will just continue on their existing Short Assured Tenancy for years to come until the property next becomes vacant.
The major differences between the new Private Residential Tenancy (PRT) compared to the previous Short Assured Tenancy (SAT) are as follows:
- No fixed term – The new Private Residential Tenancy will be open ended, and the tenant and landlord won’t be able to agree a fixed duration for any lease. There will be no end date on the new PRT tenancy agreement.
- Removal of the ‘no fault’ ground for repossession – landlords won’t be able to end the tenancy unless one (or more) of the 18 grounds for possession can be applied.
- Rent can only be increased once every 12 months and tenants must be given three months’ notice.
- Under the new Private Residential Tenancy (PRT), the tenant is now able to give notice to vacate the property any time after the start date of the lease. The tenant must give the landlord a minimum 28 days’ notice and it must be in writing.
- Council areas of Scotland could be declared Rent Pressure Zones (RPZ). If a local council believes rents are rising by too much in their area, causing issues for tenants and putting pressure on the council to provide housing (or subsidise the cost of housing), they can ask the Scottish Ministers to have this area designated as a RPZ. A rent cap will be set in that area for up to five years of at least 1% above the consumer price index (CPI). It will only apply to existing tenants and any new letting would be at the going rental market rate.
I would like to expand further on Point 2 above as this will be the most important change for Landlords.
One of the key amendments brought about by the new tenancy is the removal of the ‘no-fault’ ground for repossession. In plain English, this basically means that the landlord will be unable to simply ask a tenant to leave once the date of the tenancy agreement expires as there will now be no end date on the new Private Residential Tenancy agreement.
If the landlord wishes to give notice to a tenant to vacate on the new tenancy, they must adhere to the new eviction orders for a legitimate reason (the 18 conditions detailed below). The notice period for any eviction order depends on which ground is used and the length of time that a tenant has occupied the property and will be anything between 28 days and 84 days’ notice for tenants that have occupied a property for 6 months or longer.
Please note: Mandatory grounds are in bold print. Discretionary grounds are in normal print.
1. Landlord intends to sell the property at market value within 3 months of tenant ceasing to live in the property.
2. The mortgage lender will be selling the property
3. Landlord intends to refurbish which will involve major disruptive works
4. Landlord intends to live in the property as their main residence
5. Family member intends to live in property as their main residence
6. Landlord intends to use property for non-residential or commercial use
7. Property required for a religious worker and will be used for these duties
8. Tenant is no longer the landlord’s employee (mandatory if application made within 12 months of tenant ceasing to be an employee)
9. Tenant does not require supported accommodation anymore
10. Tenant is no longer occupying the property
11. Tenant has breached part of the tenancy agreement (but not rent arrears – separate ground for this)
12. Tenant is in rent arrears for over 3 consecutive months (mandatory if on day of tribunal hearing tenant owes at least one months’ rent and arrears are not related to delay/failure in benefit payment)
13. Tenant convicted of an offence committed at/near property or convicted of using property for immoral/illegal purpose
14. Tenant has participated in anti-social manner
15. Tenant associates with someone who has a criminal conviction or who has engaged in anti-social behaviour in the property
16. Landlord has had their registration revoked or has been refused registration
17. Landlord’s has had their HMO licence revoked
18. Landlord has been serviced with an overcrowding statutory notice
So, in summary looking to most of the cases from the past where a Landlord wanted a tenant to vacate their property these are all still catered for in the new lease agreement such as rent arrears, re-occupying it as your main residence or you want to sell it, which are all basically as before.
However, you don’t have the automatic mandatory right to repossess the property just because you say wanted a friend to stay in it or for any other unspecified personal reason.
No 2 – The second change taking place is that all Letting Agents in Scotland will need to comply with the new Letting Agent Code of Practise (Scotland) regulations 2016 by 31st January 2018.
The Letting Agent Code of Practice (Scotland) Regulations 2016 mainly affects the running of Letting Agencies and the way they do business with Landlords and Tenants.
The changes are all for the good of the letting industry and professional letting agents have nothing to fear. It will hopefully weed out any agents not offering the required service levels to meet with the code of practise in Scotland.
No 3 -The third change taking place is that all agents will need to meet a training requirement and become registered letting agents by 1st October 2018.
Derek Gibb & Partners Ltd have fully embraced these new regulations and were one of the first firms to sign up and undertake further training requirements provided by Landlord Accreditation Scotland (LAS) and the Chartered Institute of Housing (CIH).
We are pleased to let our Landlords know that we have passed the training requirements and now only need to make sure that the further requirements for adapted procedures is in place before applying for registration before 1st October 2018.