The new private residential tenancy

On 1 December 2017, the first major change to private rented tenancy legislation in Scotland in almost 30 years took effect. From that date, the new private residential tenancy, created by the Private Housing (Tenancies)(Scotland) Act 2016, applies to all new lets in private rented housing. Existing tenancy agreements, mainly short assured tenancies, will stay in place until they come to an end.

The Scottish Government expects that the new tenancy will provide security, stability and predictability for tenants and appropriate safeguards for landlords, lenders and investors.

As many MSPs will know from their postbags, there can be a lot of misunderstanding and confusion about rights and responsibilities in private rented housing. So, this blog takes a quick look at what’s been happening and provides further sources of information.

What’s changing?

Most private rented tenancies, in place before 1 Dec 2017, are short assured tenancies. These last for a minimum of six months and can be ended by the landlord relatively easy at the end of the fixed term. This is commonly known as the ‘no-fault ground’ for possession.

This contrasts to the new tenancy which will be open- ended. It can only be ended by the tenant giving the landlord notice or by the landlord giving the tenant notice to leave. The landlord will have to say which one of the eighteen eviction grounds, set out in the legislation, they are using.

Other changes include:

  • The introduction of a model tenancy agreement which can be used by landlords to set up a tenancy.
  • Simplified notice procedures: only one notice to end the tenancy will be needed.
  • Increased notice to leave: generally, tenants who have lived in a property for more than six months must be given at least 84 days’ notice to leave.
  • A new dispute resolution mechanism: tenancy disputes will be heard by the new First-tier Tribunal (Housing and Property Chamber) instead of the sheriff court. The move to a Tribunal system is expected to make it easier for landlords and tenants to settle disputes.
  • New limits on rent increases: rents can only be increased once every 12 months and tenants must be given at least three months’ notice of proposed increases.
  • Rent pressure zones: in certain circumstances, local authorities can apply to Scottish Ministers to have a rent pressure zone in their area approved. This would limit rent increases, by a specified amount, for existing tenants with a private residential tenancy for up to five years.

 What does the change mean for tenants and landlords?

For tenants, the new regime should bring greater security of tenure. Landlords will need to have a valid reason for ending a tenancy. It should also give tenants the confidence to report any problems with their property to the landlord without fear of the landlord ending the tenancy.

Furthermore, if the tenant thinks that the landlord doesn’t have sufficient evidence to back the eviction ground that is being used they can take a “wrongful termination” case to the Tribunal. If the Tribunal agrees with the tenant, they can order the landlord to pay the tenant compensation.

For landlords, the model tenancy agreement and simplified notice procedures should make the process of letting a property easier.

Some landlords have been concerned about the ease with which they will be able to get their properties back with the removal of the no-fault ground for possession. However, the Scottish Government has sought to reassure landlords, pointing to the range of eviction grounds that are available for landlords to use. The grounds include that the landlord wants to sell or refurbish the property or if they intend to live in the property themselves.

Student lets

Some landlords have also been concerned about the impact of the new tenancy on the student market. While halls of residence type accommodation is exempt from the new tenancy arrangements, other properties let to students are not.

This issue has particularly been highlighted in relation to Edinburgh, where many landlords let their properties to students for the academic year. During the summer period, they use the accommodation for festival/short term lets. With no fixed terms, landlords may not know for definite that they will get their property back in time to advertise it and let it for the start of the new academic year.

The Scottish Government recognises that the change may require landlords in this market to adjust how they manage their properties.

Where can I find further information?

For the new tenancy to work properly, landlords and tenants will need to be aware of their rights and responsibilities.

The Scottish Government has published a range of relevant information on its website. It has also worked with Shelter to launch the New House Rules webpages. Finally, as always, SPICe can help MSPs and their staff with any further information they may need.

Kate Berry, Senior Researcher (Justice and Social Affairs Research Unit)

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