In a few months’ time, assured shorthand tenancies (ASTs) in Scotland will be a thing of the past. Landlords will be required to provide a new type of tenancy, knowns as a "private residential tenancy."
Under the The Private Housing (Tenancies) (Scotland) Act 2016, tenants will have greater security, and landlords, lenders and investors will have additional safeguards. While the government has yet to provide an exact template of what the new contract between a tenant and landlord will be, we do know that a private residential tenancy will be open-ended, lasting until a tenant wishes to leave the property, or a landlord relies on one (or more) of 18 grounds for eviction. Here’s what else we know…
- There will be no minimum period of let and no pre-tenancy notices will be needed.
- 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.
- The Act is expected to come into force at the end of 2017.
- Existing ASTs will continue on the same terms and conditions. (The parties 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.)
How will landlords benefit from private residential tenancies?
- No more confusing pre-tenancy notices, such as the AT5.
- If a tenant is in rent arrears, a landlord can refer a case for repossession more quickly.
- Standardised tenancy terms will be included in the Scottish Government recommended "model tenancy agreement."
- The current "notice to quit" and "notice of proceedings" will be replace by one simple notice — a "notice to leave" to help a landlord regain possession of a property.
- Includes 18 modernised grounds for repossession, covering situations where the property has been abandoned or the landlord intends to sell.
How will tenants benefit from private residential tenancies?
- Increased security: this is an open-ended tenancy so a landlord can't ask a tenant to leave because they've been in the property for a set length of time.
- Increased protection from frequent rent increases: rent can't go up more than once a year and at least 3 months' notice of any increase must be given.
- Any rent increase can be referred to a rent officer, who can decide if it is fair.
- If a tenant has lived in a property for more than 6 months, landlords have to give 84 days' notice to leave (unless the tenant is in breach).
- If a tenant believes they were misled into moving out, they can now apply to the First-tier Tribunal for a "wrongful termination order." If the Tribunal gives the order it can award up to 6 months' rent in compensation.
- Local authorities can apply to Scottish Ministers for a "rent pressure zone" and cap the levels of rent increases in areas where rents are rising too much.
If you're concerned about rent pressure zones and how they might be enforced, don't worry too much. This is a provision clause to be taken out only in very extreme circumstances — say Glasgow landlords tried to hike the rents up in Govanhill to match the rents in the west end...!