Massive reform for Private Rented Sector as Tenancies Bill is published
The Private Housing (Tenancies) (Scotland) Bill 2015 proposes a complete reform of the current tenancy regime, making it one of the biggest changes to tenancy legislation in over 25 years. For many landlords the key areas of concern are the proposals to remove the right of a landlord to end a lease naturally using the so called “no fault ground”, proposals to allow rent controls in designated areas, the impact of the proposals on the operation of the specialist student let market and the impact of the proposals on the ability of a landlord to tackle anti-social behaviour and recover possession promptly when the tenant falls into rent arrears.
The main proposals are:
replacing assured and short assured tenancies with a Scottish Private Residential Tenancy (SPRT), with landlords required to use a model tenancy agreement (to which they can add their own clauses to supplement the prescribed ones);
tenancies will have a fixed term of any duration and will continue indefinitely;
landlords will only be able to end a tenancy if one of 16 grounds for possession apply - including where the landlord wants to use it for his own family, sell the property, complete major refurbishments, tenant abandonment or major breach such as tenant committing anti-social behaviour or accruing rent arrears.
• To end the lease landlords will be required to give 4 or 12 weeks’ notice using one of the grounds and tenants will be required to give between 4 – 8 weeks. Notice periods for both landlords and tenants will be relative to the tenancy duration. • the grounds will all be mandatory, although the breach grounds will only be so for very serious breaches; Landlords should note that the new regime will only apply to new tenancies after legislation comes into force, which is predicted to be in 2018.
The main driver for change has been the desire to increase security of tenure for tenants and increase the predictability of rent levels. Having read the legislation, my concerns would be the removal of the “no fault” ground and possible imposed rent controls. Both these factors could discourage investment in the sector, resulting in lower rental stock available for an ever-increasing demand for rental property in Scotland – something the Government was wanting to avoid.
The bill will be analysed and debated in Parliament over the coming months. Once the bill is approved and enacted, there will be a need for secondary legislation before the proposals can be implemented. This secondary legislation will be finalised during 2016-2017 and it is expected that the new tenancy regime will take effect from 2018. Both Scottish Association of Landlords (SAL) and the Council of Letting Agents (CLA) are lobbying on behalf of landlords and letting agents throughout the parliamentary debates and I will be watching to see how the final legislation develops over the coming months.
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