The Scottish Government has proposed that properties where planning permission was given on the basis that the property would be used predominantly for housing students should be exempt from the Private Housing (Tenancies) (Scotland) Bill.

The Government does not propose to exempt lettings to students of accommodation in the mainstream private sector where the property in question was not purpose built for students e.g. existing tenement properties. This has the potential to create a two tier system for student lettings _ one in the PBSA and one for more traditional properties.

The amendments to the Bill put forward by Margaret Burgess, Minister for Housing and Welfare, also propose removing the initial 'lock in' period, but they do not bring back the no fault ground for repossession.

The amendments will now be considered by the Infrastructure and Capital Investment Committee before returning to the chamber of the Scottish Parliament for Stage 3. The Bill will have to be passed before the break-up of the Scottish Parliament on 23 March 2016, but is not anticipated to come into force until the end of 2017.

The new private tenancy for Scotland - proposed exemption for Purpose Built Student Accommodation

The Scottish Government has published its proposals for amending the Private Housing (Tenancies) (Scotland) Bill. The headline changes proposed are as follows:

  • The initial 'lock-in' period of six months during which neither the landlord nor the tenant would be permitted to end the tenancy will be removed. The Government is seeking to protect victims of domestic abuse who may want to end a tenancy earlier than currently permitted under the Bill. This will mean that there will be no guaranteed period of let since the tenant will be free to serve a notice to end the tenancyat any time;
  • The mandatory grounds for repossession when a landlord has ceased to be registered, an HMO licence is revoked, or an overcrowding notice is served, should become discretionary and not mandatory;
  • It should be possible to end a tenancy without the need to appoint an executor where there is no one to succeed the tenant;
  • When dealing with an application for an eviction order for rent arrears of three consecutive months, the Tribunal should have the discretion as to whether or not to evict the tenant if the arrears have been fully cleared on the first day they consider the application for eviction. The Government is seeking to protect tenants in financial hardship but proposes retaining the mandatory ground for eviction where one month's rent remains outstanding at the beginning of the day on which the Tribunal considers the application;
  • Purpose built student accommodation should be exempt from the Bill. The Government recognised that PBSA provides similar accommodation to that provided by Higher and Further Education Institutions which is exempt from the Bill. Their proposed amendment is geared around the planning permission for the property having been given on the basis that the property will be used to house students. This may have to be expanded as not all planning permissions for PBSA will refer to student housing. Student accommodation in the mainstream private sector will not be exempt as the Government did not want to create a tenancy for specific tenant groups. However, owners of such properties which are not purpose built, but are let to, students, may question whether it is correct that there will be in effect a two tier system for student lettings, and campaign for a similar exemption.

The Scottish Government does not propose adding to the repossession grounds included in the Bill and reaffirmed its commitment to remove the no fault ground for repossession of the property. Tenancies will therefore continue until the tenant serves the requisite notice to bring the tenancy to an end or one of the repossession grounds can be founded upon. The grounds for repossession will be reviewed five years after the Bill comes into force.

The Scottish Government is also sticking to its commitment to allow local authorities to introduce rent pressure zones saying that it is not proposing general regulation of rents, and that it is proposing specific measures that are justified to protect tenants from excessive increases in hot-spot areas.

A deadline of 26 February has been set for completion of the Stage Two consideration of the Bill by the Infrastructure and Capital Investment Committee. It is anticipated that the amended version of the Bill will then be considered by the full chamber of the Scottish Parliament in the first or second week in March. The aim will be to pass the Bill before the Scottish Parliament breaks up on 23 March. If all goes to plan, the new tenancy will be introduced at the end of 2017 by which time the first-tier Tribunal will begin hearing PRS cases.

Click here to read more about the Private Housing (Tenancies) (Scotland) Bill.

If you would like any more information on residential tenancies in Scotland please get in touch with your usual Brodies contact.