A Guide to Private Residential Tenancies in Scotland (Part Four)

Part One of our Guide to Private Residential Tenancies ("PRT"s) in Scotland looks at what PRTs are; Part Two discusses key terms; and Part Three looks at how PRTs are brought to an end.

In this fourth part, we look at matters relating to the private rented sector in Scotland - the repairing standard, deposit requirements, landlord registration, letting agent registration, and houses in multiple occupation (HMO) licencing.

The repairing standard

The repairing standard - set out in the Housing (Scotland) Act 2006 (as amended from time to time) – is the standard to which a landlord must keep a property let for human habitation.

To meet this standard, currently a landlord must:

• keep the property wind and watertight, maintaining the structure and exterior in a reasonable condition;
• keep internal and external installations supplying water, gas, electricity, sanitation, heating and hot water in a reasonable state and working properly;
• keep fixtures, fittings or appliances provided in a reasonable state and working properly, and ensure furnishings provided are safe to use;
• fix any problems with rising or penetrating damp;
• maintain adequate insulation, ventilation, natural or artificial light and heating;
• maintain a safe electricity supply, an acceptable fresh water supply, and a good drainage and sewerage system;
• ensure there is a sink with hot and cold water, an indoor toilet, a fixed bath or shower, and a proper entrance; and
• ensure there are suitable smoke, fire and carbon monoxide alarms.

From March 2024, having safe kitchens, fixed heating systems, safe common parts and secure doors, and residual current devices (circuit breakers), will be added to the repairing standard. The gas and electricity safety provisions will be extended to other fuels and those systems will also need regular checks.

Deposits

Deposits must be lodged with a tenancy deposit scheme provider within 30 days of a tenancy starting and cannot exceed two months' rent.

Once a deposit has been registered, the following details must be provided by the landlord in writing to their tenant:

• the amount of the deposit and date it was received;
• the date the deposit was paid into the tenancy deposit scheme;
• the address of the property;
• confirmation that the landlord is registered with the local council (or that an application for registration has been made);
• details of the tenancy deposit scheme provider used; and
• the circumstances in which all or part of the deposit may be kept at the end of the tenancy.

Where a deposit to be paid in instalments, this information must be given in writing for each instalment.

If a deposit is not lodged as required, the tenant can complain to the First-Tier Tribunal for Scotland (Housing and Property Chamber), either during the tenancy or up to three months after it ends, and the landlord may be ordered to pay up to 3 times the deposit to the tenant.

Exceptions to the deposit requirements apply in certain circumstances.

Landlord registration

Under Part 8 of the Antisocial Behaviour etc. (Scotland) Act 2004, private landlords are legally required to register with the local authority where their property is situated, unless the arrangement falls within one of a number of exceptions – for example, where the property is used for holiday lets or where the tenant is a family member.

Landlords must demonstrate to their local authority that they meet the requirements for letting property and are a fit and proper person, before being entered on the Scottish Landlord Register. Registration lasts for 3 years and must then be renewed.

A landlord who breaches the duty to register commits a criminal offence with a maximum fine of £50,000.

Beyond registration, landlords can choose to apply for accreditation if they wish. Accreditation involves showing that particular standards are met, or are being worked towards, and might make a property more appealing to tenants than a property let by a non-accredited landlord.

Letting agent registration

The Scottish Letting Agent Register opened on 31 January 2018 and those who carry out "letting agency work" in Scotland (whether or not the person carrying out the work is actually based in Scotland) must register. The Letting Agent Code of Practice (the "Code") also came into force on 31 January 2018 - compliance with the Code is mandatory and a pre-requisite of registration.

"Letting agency work" is work carried out in the course of a business which involves arranging the letting of residential property for a landlord, or involves managing residential lets (including, specifically but not only, collecting rent, inspecting properties, and arranging repairs, maintenance, improvements or insurance).

To obtain registration, certain persons carrying out letting agency work – such as sole traders and those with supervisory or managerial roles - must have relevant qualifications. Where a qualification was obtained more than 3 years before, it is necessary to demonstrate that additional training relevant to letting agency work has been undertaken within the last 3 years.

It is also necessary to show compliance with the Code which sets out expected standards for matters such as the handling of rent and deposits, and the requirement to obtain professional indemnity insurance.

As with landlord registration, letting agent registration must be renewed every 3 years.

Houses in multiple occupation (HMO) licencing

HMOs are houses (or flats) occupied by 3 or more unrelated people who share kitchen and bathroom facilities. These properties require a licence unless a particular exemption applies – for example, where a resident landlord is one of the 3 unrelated people in occupation.

The owner of an HMO must apply to the local authority where their property is situated, and a licence will only be granted by the local authority if:

• the property meets certain physical standards and is suitable for use as an HMO (or could be made so), including the requirement to satisfy particular fire safety legislation; and
• the owner and any manager of the property is found to be 'fit and proper' to hold a licence.

Local authorities can vary the terms of an HMO licence or revoke it if the property, owner or agent are no longer suitable and operating without a licence is a criminal offence with a maximum fine of £50,000.

Licences are usually granted for a period of up to 3 years and require to be renewed.

The legal position on points covered in this Guide is correct as at the time of writing, but this area of the law is often subject to change and taking legal advice is recommended. To check the up-to-date position, or for further information or advice, please get in touch with your usual Brodies contact.