The New Private Residential Tenancy now in place in Scotland
What happened on 1st December 2017…
The Scottish Government confirmed that a new form of Scottish residential tenancy known as the Private Residential Tenancy (“PRT”) would come into force on 1 December 2017 when the main provisions of the Private Housing (Tenancies) (Scotland) Act 2016 (the “Act”) take effect. The Act will apply to any new private rented sector tenancy starting after 1st December 2017.
This means that from 1st December 2017, you cannot issue a Short Assured Tenancy in Scotland. So, a few changes ahead…..
Goodbye Fixed Term: There will not be a fixed minimum term under the PRT. So no more 6-month minimum terms.
Model Tenancy Agreements: A Model Tenancy Agreement (MTA) was published in draft for consultation by the Scottish Government. The consultation period has ended and the final version of the MTA is expected next month. The MTA will contain mandatory and discretionary clauses and a statutory guidance note.
Notice Periods: A tenant will be able to bring a PRT to an end on 28 days’ notice AT ANY TIME (the parties can agree to adjust this notice period after the tenancy starts). The landlord must give 4 weeks’ notice to evict if the tenancy is within its first 6 months or, after that, 12 weeks notice to evict.
Evictions: If the tenant disputes the ground of eviction, the landlord will have to seek eviction through the new First Tier Tribunal (“FTT”) which has been set up to adjudicate on disputes.
Specific Grounds: The landlord must now have grounds (a specific reason) for evicting the tenant. As with the current short assured tenancy regime, the 18 grounds of eviction are a mix of mandatory grounds, where eviction must be granted by the FTT if the ground is proved, and discretionary grounds where the FTT will only grant eviction if it finds it is reasonable to do so. You will need to familiarise yourself with the grounds to know, if you needed to evict your tenant, which Grounds would apply to your situation. Furthermore, thoroughly referencing tenants BEFORE offering them a tenancy will be paramount with the new tenancy agreement structure! Speak to a member of our team about West’s 5-point referencing procedure to see how we ensure only the best tenants are selected for our tenancies.
Grounds for eviction include: the landlord intends to put the property up for sale or refurbish the property to the extent it is not practical for the tenant to occupy it; the landlord wants to use the property for a non-residential purpose; the landlord or a family member of the landlord intends to live in the property; the tenant is carrying on criminal or anti-social behaviour at or in the vicinity of the property; and the tenant has breached the tenancy agreement.
Restrictions on Rent Increases: Landlords can seek an increase in rent by issuing a rent increase notice to the tenant but cannot increase the rent more than once in any 12 month period. The possibility of statutory control of rent now exists in Scotland as local authorities can apply to the Scottish Government to designate an area as a “rent pressure zone” which, if so designated, means rent increases can be no greater than a percentage set by the Scottish Government for a period of up to 5 years.
If the tenant thinks the proposed rent increase is unreasonable they can refer the matter to a rent officer to determine open market rent whose decision can be appealed to the FTT. Landlords within a rent pressure zone will however still be able to increase rents by a minimum of Consumer Prices Index + 1per cent. Edinburgh City Council has already discussed implementing rent controls under the Act in order to control rent increases in the city.
Finally, here’s the big one………..Withdrawal of the right terminate on a set date: Then big change of importance to many Landlords will be the withdrawal of the right to terminate the tenancy at a specific end date through serving a Section 33 and Notice to Quit. Now the tenancy can continue until either the tenant terminates the tenancy or the landlord is able to recover possession under one of the 18 specific grounds outlined in the Act.
Already landlords have been in touch with us to make sure they understand the implications of the changes. We are more than happy to set up a call to discuss these changes and what impact it will have on your rental properties.
At West, our team are up to speed with ALL the new changes. We know it can be a bit disconcerting having a change this big and that’s why we are here to help.