New Tenancies Scotland:
This week the Scottish Government published the new “Model Tenancy” agreement for residential lets in preparation for major reforms of the private rented sector (PRS) due to commence 1st December.
The Private Housing (Tenancies) (Scotland) Act 2016 recently passed by the Scottish Parliament will mean a new private residential tenancy in Scotland replacing all existing tenancy agreements which are currently based on the English assured shorthold tenancies, which in Scotland are known as Short Assured tenancies.
A new Tribunal will be set up as an alternative to the courts with the aim of dealing with tenancy disputes in a more tenant friendly and informal manner.
The main changes will be:
- No more fixed terms – all new tenancies will be of indefinite length until brought to an end by the tenant with a 28 day notice, or by the landlord relying on one of 18 grounds for repossession incorporated in to the Act.
- There will be no more “no-fault” “Section 21” type possession procedure in Scotland. Instead, landlords will be obliged to prove breach of contract in the case of damage or rent arrears, using one or more of the 18 grounds for repossession.
- The tenant will have to be three or more months in arrears of rent before the landlord can apply for possession.
- Other grounds include when the landlord genuinely wishes to sell and market the property within 3 months, or if the landlord wishes to live in the property.
For giving notice when the tenant has been in the property 6 months or less, or for breaches of tenancy including rent arrears, anti-social behaviour or criminal convictions, 28 days’ notice is required.
In the case of selling or the landlord wanting to live in the property, the landlord must give at least 84 days’ notice.
Tenants will be able to terminate the tenancy at any time on giving the landlord 28 days’ notice. This will mean that a tenant can give the landlord notice to leave soon after the start of a tenancy.
3 months’ notice must be served for increases of rent, which is restricted to one increase request every 12 months, which in turn is subject to rent officer for adjudication, if the tenant refers it.
Scottish Ministers will also be given powers under the legislation to implement “rent pressure zones” (RPZs) where, for any given district (usually major cities), a rent cap will be set to restrict rents to a maximum level.
Purpose built student accommodation, holiday lets, social housing, police and military housing will all be exempt from this new regime.
The stated aim of the legislation is to improve security of tenure for tenants, protected by the 18 grounds for possession, most of which are similar to the current Scottish Short Assured tenancy grounds (the English Section 8), giving a mix of mandatory and discretionary grounds.
The 18 grounds for eviction will include:
- The landlord intends to sell the property.
- The landlord intends a major refurbishment where it would be impracticable for the tenant to occupy.
- The landlord intends to use the property for a non-residential or commercial purpose.
- The landlord or a family member of the landlord – spouse, civil partner, cohabitant, parent, grandparent, child, grandchild or sibling – intends to live in the property.
- The tenant is in rent arrears for 3 or more consecutive months, all of the arrears totalling at least 1 month’s rent. The tribunal will have discretion on whether to evict if the rent is less than one month in arrears.
- The tenant is involved in criminal or anti-social activity at or near the rental property
- The tenant is in breach of the tenancy contract (agreement). This might include but would not be limited to: subletting or assigning the lease without permission.
- The tenant is failing to give the landlord reasonable access on when served notice.
There are “safeguards” in the legislation to prevent landlords from getting around the some of the eviction grounds, such as putting the property on the market and not intending to sell (pricing it too high), doing a sham refurbishment or landlord occupation. If they are caught out on this, they will be forced to offer the previous tenant a new tenancy or give compensation of 6 months’ rent.
Given that landlords are unable to end a tenancy when the term has expired, or gain possession on a “no fault” basis when trouble arises, it is thought that landlords may in future be deterred from investing in rentals, knowing they don’t have the old safeguards afforded by the Short Assured tenancy.