You might be thinking demolition was afoot in the Scottish
legal world. In fact, a shake-up of the way in which the lettings
of privately owned houses and flats are regulated is about to
occur.
The Scottish Government has just completed the second stage review of the Private Housing (Tenancies) (Scotland) Bill. This proposed new law promises to streamline the current minefield of legislation in this area and make it easier for landlords and tenants to understand their positions. It will introduce a new kind of private tenancy that is intended, over the course of time, to replace the short assured tenancy.
What is a Private Residential Tenancy?
A Private Residential Tenancy is a tenancy to an individual or individuals of a property, the sole purpose of which is to provide that person or persons with a home. This is helpful but it can be said that an assured tenancy, as defined under the current law, is the same thing.
The new definition is added to by a list of all of the tenancies that cannot be considered to be a Private Residential Tenancy. These include all of those leases currently accepted as falling into this category, such as leases of shops, agricultural land to name a few. However, an important inclusion in this list is those residential tenancies where there is a live-in landlord; these types of tenancies are not covered by the new bill. This list, as it stands, is not exhaustive and the Scottish Government can add to it at any time.
The Terms of the Tenancy
The bill provides that the Scottish Government may enshrine particular tenancy conditions of such tenancy agreements in law. At this time there are no proposed regulations to do this but it will be something that landlords and tenants will have to be aware of in future.
Landlords will now also be under a statutory duty to set out the terms of the Private Residential Tenancy in writing to the tenant. Most social landlords will have made a habit of doing so already, as it protects their own interests as well as those of the tenant.
In addition, the Scottish Government may issue regulations that direct landlords to provide specific information to the tenant about the tenancy. It is likely that this information will have to explain to tenants how they, and their landlord, can enforce their rights under the tenancy. This is not surprising as landlords currently have to provide such guidance anyway.
Referral to the First-Tier Tribunal
Under separate legislation to that being considered, all disputes between residential landlords and tenants will be transferred from the Sheriff Court to the Scottish Tribunals. It is envisaged that a specific Housing Tribunal will be set up to deal with such disputes.
The First-Tier Tribunal will have the power to draw up the terms of a tenancy where needed; sanction a landlord for failure to provide required information to a tenant; deal with disputes concerning rent reviews and set new rents if required; and deal with applications for eviction orders by a landlord.
Rent Reviews
In a similar way to that under the already existing legislation, the landlord may increase the rent payable by a tenant by serving a notice on the tenant. This cannot be done more than once in a 12-month period and sufficient notice must be given to the tenant.
The tenant has the right to refer the increase in rent to a rent officer (a public official) for adjudication to determine if it is fair. If the tenant does not agree with the decision following adjudication there is a further port of appeal to the First-Tier Tribunal. However, the decision of the First-Tier Tribunal will be final.
Rent Pressure Zones
These are a new addition to Scots law. The current proposals, if enacted, will allow a local authority to apply to the Scottish Government to designate an area as being a Rent Pressure Zone. If such an application is granted it will mean that the rent payable under any Private Residential Tenancy cannot increase by more than 1% above the consumer price index.
A comparison can be made to the rent control model that is operated in some cities in the United States. However, it is stated that the Scottish Government cannot designate an area as being a Rent Pressure Zone without them having first received an application from the relevant local authority.
Termination
The terms of the Bill, at present, are a replication of the existing law relating to Short Assured Tenancies. A tenant or landlord may give notice to the other, indicating a specified time frame and end date, that the Private Residential Tenancy is to come to an end. As is currently the case, such a notice should be served at the same time as a Notice to Quit. In the landlord's case there are specific grounds for issuing a notice under the Bill; these include, but are not limited to, the non-payment of rent by the tenant, the landlord wanting to sell the property, and the tenant's behaviour may be considered to be antisocial.
An important change however is that all of the grounds for eviction appear to be mandatory. Therefore, if the First-Tier Tribunal finds that the ground on which eviction is sought does exist then they must grant an order evicting the tenant.
In addition, sub-tenants are afforded the same protection as the tenant. This could be problematic for landlords but the easiest way to avoid such complication is to prohibit the subletting of a property within the Private Residential Tenancy agreement. In such cases the sub-tenant will have no protection.
A tenant who believes that an eviction order has been wrongfully granted or who has been wrongfully evicted will have the opportunity to apply to the First Tier Tribunal to overturn that decision should they choose to do so.
Other changes and a look ahead
The notice served by a landlord on a tenant indicating they would like the property back, or a notice served by the tenant to say that they are leaving the property, is currently known as Notice to Quit. The new act changes the name to a Notice to Leave. However, there is little change in how such a notice will operate.
Provisions have also been made to deal with circumstances where a tenant has died. A deceased tenant will be deemed to have left the tenancy to their partner, be that their spouse, civil partner or cohabitee.
On the other hand, the executor of a person who was a tenant living on their own, will be obligated to terminate the tenancy.
"Promises to streamline" you said? The bill has now been formalised and will shortly take its place on the statute books. Much of the current law will remain in place until the use of the Short Assured Tenancy is phased out. It looks as though landlords, tenants and their solicitors are going to be jumping between pieces of legislation for the time being.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
