The new Private Housing (Tenancies) (Scotland) Act introduces a number of crucial changes impacting both landlords and tenants. It is important for you to be aware of how these changes may affect you.
The principal achievement of the 2016 Act is the consolidation of the current private tenancy schemes into one single tenancy: the Private Residential Tenancy (PRT). When the Act comes into force in the latter half of this year, Short Assured Tenancies and Assured Tenancies can no longer be created.
Landlords of an existing Short Assured or Assured Tenancy will have the option to convert their tenancy into a PRT, with automatic conversion only occurring where the tenant of an Assured or Short Assured Tenancy dies, and someone succeeds to the existing tenancy interest. Schedule 1 of the Act lists properties which cannot be subject to a PRT, such as purpose-built student accommodation and holiday homes.
While older tenancy schemes contain a ‘no fault’ ground for eviction, whereby a landlord can evict their tenant following the end of the contractual period of the tenancy, the absence of a contractual period within a PRT eliminates the possibility of this ground for eviction. For tenants, this lack of a contractual period allows for notice to be given to their landlord that they will be leaving at any point of the tenancy (a contractual period of six months had been included at earlier stages of the Bill, but is no longer in the Act).
Landlords can also give notice to leave at any point of the tenancy within a PRT, though one of the remaining grounds for eviction must be satisfied, namely the landlord intending to use the property for another purpose, criminal or anti-social behaviour being undertaken by the tenant within the property, or the tenant being in rent arrears for three consecutive months. Tenancies subsisting for less than six months only require 28 days’ notice to be given to the tenant, with those subsisting for more than six months requiring a notice period of 84 days.
Repossession of the property by the landlord is now not possible until the end of this notice period, as opposed to the current regime which allows landlords to repossess the property as soon as the tenant vacates the property following their eviction.
Where a tenant feels they have been misled in their eviction, they can apply to the First-Tier Tribunal for a wrongful eviction order, which, if granted, may require the landlord to provide payment to the tenant of up to six months’ rent. Should this order be granted, the Local Authority in which the landlord is registered will be informed, which will be considered should the landlord attempt to renew their registration.
Another crucial change in the new regime is the attempt by the Scottish Parliament to protect tenants with new rent controls within the legislation. Landlords will now only be able to review and change rents annually, with a three-month notice period being required to be given to tenants of any changes. Concerns have been raised that this may lead landlords to set their rents too high in order to ensure that they recoup the costs incurred to them through being a landlord, as they will not be able to raise rent prices to account for any unexpected costs throughout the year.
Similar to the pre-1989 Regulated Tenancy scheme however, is the ability of tenants to refer to a rent officer to assess a fair rent for the property should they feel any increases to be unreasonable. This rent officer is accountable to the First-Tier Tribunal, and the valuation of fair rent for the property can thereby be appealed.
The Private Housing (Tenancies) (Scotland) Act 2016 will introduce a number of clear changes intended to streamline the process and consequences of tenancy, though it is yet to be seen whether these developments will be improvements or not. All that is certain until the Act comes into force is that landlords and tenants will both begin to experience a vastly different relationship with one another.