The Scottish Government’s 2015-16 Programme for Government, released last week, confirmed that the private rented sector would be on the agenda, with a Private Sector Tenancies Bill forthcoming.
As we anticipated, the Programme confirms that:-
- the ‘no-fault’ ground for repossession will not feature in the new system; and
- there will be the possibility of rent control provisions, for rent pressure areas
The combination of both features raises the spectre of long term tenants paying a below-market rent. Where that leaves returns, or incentives, for landlords, particularly those institutional investors that the Scottish Government is trying to entice into the sector, is not clear.
At the other end of the scale – those letting a spare cottage on the farm, or the accidental landlord that couldn’t sell due to negative equity – the concern is that existing properties will be removed from the market, for fear that once in it, it will be impossible to get back out, without selling up.
The balancing act of landlord and tenant rights is not easy, and is one which has – in the eyes of many – long been weighted in the landlord’s favour. However, set against the ability of landlords to remove tenants without specific reason, is a wealth of cases indicating that landlords must have all t’s crossed and i’s dotted before an order for possession is likely to be granted.
The Programme states that landlords will benefit from ‘comprehensive and robust grounds for repossession’. Many landlords will hope that, with increased tenant rights will come decreased rigidity in application of the law, to ensure the scales do not tip too far against them.
Ability to remove “bad” tenants will be key to ensuring landlord confidence in the sector. It will be interesting to see if the draft Bill provisions take into account consultee responses that question the effectiveness of some of the proposed grounds, particularly that for rent disputes, where unpaid or underpaid rent requires three consecutive months of arrears before the landlord is entitled to vacant possession. The Bill is likely to be published in October and we’ll let you have an update when it hits our screens. In the meantime, do get in touch if you would like to discuss any queries or concerns.
On September 8, 2015