The Big Rental Shake Up
December will see the biggest change to the Private Rented Sector in Scotland for 30 years with the introduction of the Private Residential Tenancies that replace Short assured tenancies. The Scottish government released details of what the documents will look like in October. The tenancy is designed to provide security, stability and predictability for tenants and appropriate safeguards for landlords, lenders and investors and the key points are;
• From December 1, every new private tenancy will be a private residential tenancy.
• Setting up a new tenancy involves less paperwork. You won’t have to issue AT5 or AT7 forms to tenants before they sign their lease.
• While new tenancies will have no end date, we’ve set out 18 grounds for repossession, including a new grounds where you intend to sell the property and where the property has been abandoned
• Once the new tenancy comes into force any existing short assured and assured tenancies will continue, but new tenancies granted in the private rented sector from 1st December 2017 will be private residential tenancies. For Landlords the government have specifically outlined the following improvements;
• no more confusing pre-tenancy notices, such as the AT5
• where a tenant is in rent arrears, a landlord can refer a case for repossession more quickly.
• a Scottish Government recommended 'model tenancy agreement', which will include standardised tenancy terms
• a digital version of the Scottish Government 'model tenancy agreement', which will include discretionary terms that can be edited, allowing landlords to easily put together and send out a tenancy agreement suitable for their specific property
• one simple notice when regaining possession of a property called a 'notice to leave' – this will replace the current 'notice to quit' and 'notice of proceedings'
• eighteen modernised grounds for repossession, which include new grounds where the property has been abandoned or the landlord intends to sell
For tenants the government approvals are;
• more security – it's an open-ended tenancy so your landlord can't just ask you to leave because you've been in the property for a set length of time
• protection from frequent rent increases – your rent can't go up more than once a year and you must get at least three months' notice of any increase
• any rent increase can be referred to a rent officer, who can decide if they're fair
• if you've lived in a property for more than six months, landlords have to give 84 days' notice to leave (unless it's because you've done something wrong)
• if you think you were misled into moving out, you can now apply to the First-tier Tribunal for a 'wrongful termination order'. If the Tribunal gives the order it can award up to six months' rent in compensation
• local authorities can apply to Scottish Ministers to cap the levels of rent increases in areas where rents are rising too much
With these new rules to be implemented on the 1st of December and the paperwork only released by the government in October, many landlords have yet to see details of the new documents whilst others have expressed concerns about the changes so just how
significant are these changes? “The implementation of the Private Housing (Tenancies) (Scotland) Act 2016 will see the biggest changes to the private rented Sector in Scotland for 30 years with the end of fixed term Short Assured Tenancies.” explained Brian Gilmour, Director of Indigo Square Property.
One of the main aims of this act was to provide greater security of tenure to those living in private rented accommodation. Many live with the permanent concern that their landlord will end their tenancy in just a few short months for no reason other than he wants a change. That is no longer possible. Tenants will only be moved out of a home under specific grounds so what do landlords need to be aware of?
Brian Gilmour went on to say “For many landlords the fear of the change is worse than the actual change. The paperwork will alter and the notice period of tenants to leave is also different. The biggest concern to landlords is now that a tenant can leave the property inside the first 6 months which they cannot currently do.” Gilmour continued “For good landlords and good tenants it should make very little difference.” Although as Gilmour expanded, although most will see little difference, the main focus of the change is to benefit tenants “This is really a tenant focussed piece of legislation. The main benefit to the landlord is that the proposals are to make evictions a smoother and swifter process.” Brian Gilmour of Indigo Square Property went on “The concept is to try and make the whole process simpler. There will be only one piece of paper when a tenant is to leave the property”
The Short Assured Tenancy came into force in 1987 and will be ending on 1st December 2017 but it is not the complete ending of such tenancies existing tenancies will continue under the current regime until they need to be renewed or until both parties decide they want to opt onto the new system.