The Private Housing (Tenancies) (Scotland) Act 2016 has been passed by the Scottish Parliament and will create the new Scottish Private Residential Tenancy, (SPRT) which will be introduced on 01 December, 2017. The SPRT will deliver improved security of tenure for tenants, including students in smaller purpose built and mainstream private rented accommodation, and also the power for local authorities to designate rent pressure zones within their jurisdiction. There will also be streamlined procedures for starting and ending a tenancy and a model tenancy agreement is being prepared for use by the Scottish Government.
The SPRT will become the standard tenancy agreement between residential landlords and tenants and will replace the most common types of residential tenancies in Scotland – the Short Assured Tenancy and the Assured Tenancy. The main points to note in the Act are as follows:
- There will be no minimum period of let and no pre-tenancy notices will be needed.
- There will be a model tenancy agreement which may be used by landlords and tenants. Whilst it will not be obligatory to use the model agreement produced, some of the clauses in it will be compulsory including: provision for receipts for cash payment of rent, notification of adults other than the tenant occupying the property, a prohibition on sub-letting without consent and access for repairs.
- A number of tenancy agreements have been excluded from the effects of the Act including agricultural tenancies of more than two acres, social housing tenancies and holiday lets.
- Purpose built student accommodation will be exempt but only if the planning permission for the accommodation stipulates that it has to be used predominantly for housing students and the provider of the accommodation has at least 30 bedrooms in one building or as part of a complex again predominantly used to house students. All other student tenancies in smaller purpose built and mainstream private rented accommodation will fall within the new regime. Landlords subject to the new regime will be unable to end the student tenancies at the end of the 10 month academic term time as many do at the moment.
- Tenancies will continue indefinitely unless the tenant wants to leave or the landlord can utilise one of the prescribed grounds for repossession. The grounds for repossession include the landlord or lender looking to sell the home or extensively refurbish it or a breach of the tenancy agreement by the tenant or change in the tenant’s status: the ‘no fault’ ground for termination will be removed.
- Only one notice to leave will be needed to end the tenancy. Tenants must give four weeks’ notice to leave no matter how long it lasted. When a landlord may found on one of the grounds for repossession, the notice periods are as follows:
- if the tenancy lasted for six months or more, 12 weeks’ notice;
- if the tenancy lasted for less than six months, four weeks’ notice; and,
- regardless of the length of the tenancy, four weeks’ notice where the tenant:
- is not occupying the property as their home; or
- has failed to pay three consecutive months’ rent in full or is in breach of the tenancy agreement; or
- has behaved antisocially or committed a relevant criminal offence or associates with a person in the let property who has a relevant conviction or engaged in anti-social behaviour.
- Rents may be reviewed once a year; the landlord must give the tenant at least three months’ notice of the increased rent. Tenants can challenge the proposed rent increase by seeking an order determining the rent from a rent officer. The rent officer must determine the open market rent which is “fairly attributable”; appeals can be made against such orders to the First Tier Tribunal.
- Local authorities can apply to the Scottish Ministers to designate areas as rent pressure zones to regulate existing but not initial rents. If the local authority is successful, the rent pressure zone can be put in place for a maximum of five years. Landlords within the area affected will be able to raise rents by at least a minimum of CPI + 1%.
- If certain conditions are met, partners, family members aged 16 and over and resident carers may succeed to a private residential tenancy on the death of the tenant.
The Act will come into force on 01 December, 2017. At that point, existing assured and short assured tenancies will continue on the same terms and conditions. The parties to any such tenancy could agree to convert it to a private residential tenancy but, as yet, the legislation does not require them to do so. If, however, an existing tenancy is inherited by a successor (under existing succession rules), it will become a private residential tenancy and become subject to the new legislation.
For more information on the new private residential tenancy please contact Andrew Purdie.