Renting in Scotland Is About To Change Fundamentally
The new Private Residential Tenancy (PRT) will change fundamentally the balance between landlord and tenant in Scotland. It will come into effect on 1 December 2017. Introduced under the Private Housing (Tenancies) (Scotland) Act 2016, the new tenancy will replace the widely used Short Assured Tenancy and Assured Tenancy in Scotland.
Amongst other things, the new tenancy will -
- be open-ended, which means a landlord will no longer be able to require a tenant to leave simply because a fixed term has ended;
- allow a tenant to serve 28 days’ notice shortly after the tenancy commences;
- simplify tenancy-related documentation;
- introduce a mandatory model tenancy agreement;
- provide protection for tenants against excessive rent increases;
- include the possibility of local rent control in "rent pressure areas";
- provide grounds for repossession by a landlord in 18 specified circumstances, the key ones perhaps being a genuine need to return to live in the property, a firm plan to dispose of the property or to substantially renovate it, a situation of rent arrears, and anti-social behaviour by the tenant;
- introduce new provisions for tenancy succession should a tenant die;
- provide for housing disputes to be referred to a new first-tier tribunal rather than the Sheriff Courts.
How will existing assured and short assured tenancies be affected when the PRT takes effect?
They won’t. Existing short assured tenancies and assured tenancies will continue until they are terminated. All new residential tenancies in favour of individuals in Scotland after the effective date however will be Private Residential Tenancies unless an exemption applies, and it will no longer be possible to create an Assured or Short Assured Tenancy after the effective date. Even if a landlord created what on paper appeared to be a Short Assured Tenancy, the reality is that after the effective date it would be a PRT.
How will the new tenancy impact on landlords?
It shouldn’t worry responsible landlords who take a business-like approach to letting. They shouldn’t have any need to end a tenancy other than for one of the reasons set out in the grounds and they need the assurance of a continuing rental income with minimal voids. The new tribunal arrangements for formal dispute resolution should be simpler, hopefully quicker, and more focussed (The new first-tier “Housing and Property Chamber” will focus solely on housing, as opposed to the miscellany of matters coming before Sheriffs). The new tenancy will however require landlords to be astute in tenant selection, as it will no longer be possible to end a tenancy simply because things aren’t working out as anticipated, unless one of the grounds applies.
In future blogs we'll look at the potential pitfalls and areas of concern for landlords, and at how the new arrangements will impact on letting agents.
This summary is just that, and there’s lots more we won’t bore you with here. Get in touch if you have any questions, or take a look at the Scottish Government guidance notes here.
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