The Scottish Government has launched a second Consultation on a new private tenancy for Scotland, the Scottish Private Rented Tenancy (SPRT). This second consultation gives more colour to the broad principles set out in last year’s consultation and contains some new proposals. Here are the headlines:
There will be one private tenancy in Scotland – the Scottish Private Rented Tenancy (SPRT) for all Private Rented Sector (PRS) lets. A model tenancy agreement containing both discretionary and mandatory clauses will be provided with accompanying guidance. If a tenant finds that his tenancy agreement does not contain any of the mandatory clauses, he would be entitled to refer the matter to the First-tier Tribunal who could then produce a tenancy agreement including the missing clauses.
The current ability to roll over a tenancy from month to month would be removed. Generally, the initial period to be offered by the landlord will be a minimum of six months. The landlord and tenant would be entitled to negotiate a longer period and the tenant could request a shorter initial period. During the initial period, both parties will be locked into the tenancy unless one of the grounds for terminating on 28 days’ notice is established (see further below). After the initial period, the tenancy would continue indefinitely, rather than renewing for a specific period.
The only way to terminate the new tenancy will be by establishing one of the new grounds set out below.
- The landlord is selling the home.
- The mortgage lender is selling the home.
- The landlord or a family member of the landlord wants to move into the property.
- Refurbishment.
- Change of business use.
- The tenant failed to pay the full rent for three consecutive months.
- Antisocial behaviour.
- The tenant has otherwise breached their tenancy agreement.
- Abandonment.
- The tenant is no longer employed by the landlord.
- The property is required to house a full-time religious worker.
The proposal is to reduce the grounds for seeking repossession to the above, which do not include the no fault ground. This would mean that Scottish residential tenancies would no longer have an expiry date at which the landlords will automatically be entitled to recover their properties. Despite a clear message from landlord led organisations and representatives that its removal could have an adverse impact on investment in the PRS, the Scottish Government is committed to removing the no fault ground in the interests of improving tenants’ security of tenure.
The process for bringing a tenancy to an end on the basis of the above grounds is to be streamlined. There will be no need for pre-tenancy notices, and the current notice to quit and notice of proceedings (AT6) will be combined. One notice to leave will be introduced with new notice periods as follows:
- For landlords serving a notice to leave, if the tenancy has lasted for six months or less, four weeks’ notice will be needed; if it lasted for any longer than six months, 12 weeks’ notice will be needed.
- Similarly, for tenants serving a notice to leave, four weeks’ notice will be needed to bring a tenancy lasting six months or less to an end, but only eight weeks’ notice will be needed if the tenancy has lasted for more than six months.
However, grounds 7 (anti-social behaviour) and 8 (tenant breach) above will enable the landlord to end the tenancy on 28 days’ notice, no matter how long the tenancy has lasted. Where non-payment of rent (ground 6) is involved, the landlord can give notice to leave after the tenant has been in arrears for two consecutive months, warning the tenant of the arrears and that failure to pay the amount due by the end of the next month will result in repossession of the property. This notice will have to include information on available sources of financial information and advice. If the tenant fails to pay, no further notice will be required and the landlord may seek repossession.
Recovery of possession would be pursued through the new First-tier Tribunal. The grounds will be mandatory, except grounds 6, 7, and 8 where the tribunal will have an element of discretion in deciding whether an order for possession should be granted; for example, ground 7 will be mandatory where the tenant has a relevant conviction but, otherwise, it will be discretionary. Ground 6 will be mandatory where the rent arrears at the time of tribunal consideration is at least one full month’s rent (unless due to housing benefit issues).
The Scottish Government had previously sought views on the introduction of rent controls. In this second consultation they have taken on board the warnings that such rent controls could have an adverse effect on the investment in housing for rent and have confirmed that they will not be introducing controls across the board. They have, however, floated the idea of introducing some types of controls in “hot-spots” by allowing local authorities to apply to Ministers for an affected area to be designated as a ‘rent pressure area’. The Government asks in the consultation if there is a role for the additional regulation for area-based rent limits and what types of evidence local authorities should be required to present when applying to designate an area as a rent pressure area.
The Business and Regulatory Impact Assessment in the consultation hints that there may a back stop date by which all residential tenancies in Scotland would have to comply with the new proposals. It suggests that the back stop date will be so far in the future that most tenancy agreements will have been updated through the natural turnover of tenants. However, if such a date were set, it would certainly mean that some existing tenancies will have to be revised to comply with the new rules.
The consultation closes on 10 May. Here is a link to the consultation document: http://www.gov.scot/Resource/0047/00474354.pdf. Should you wish Brodies to make any representations on your behalf or any further detail on private sector tenancies in Scotland, please contact your usual Brodies contact.real
