Scottish Private Residential Tenancy Agreement – Begins

Quite a good agreement, except the rent arrears ground is now 3 months arrears, which is unfair on landlords.

What about abandonment?

Reply to the comment left by Gary Dully at 24/10/2017 - 02:36
Not sure I'd agree with 'Quite a good agreement':

Tenant can move in as many other residents as they want and just have to inform the landlord.
Tenant can give 28 days notice to quite at any time.
Landlord must give 3 months notice of any rent increase which the tenant can then refer to a rent officer regardless of the level of the increase.

The long term effect of this change in tenancy regime remains to be seen but I predict a reduction in investment leading to reduction in supply and reduction in quality of PRS housing stock.

Regards,

Rod.

Abandonment is one of the mandatory eviction grounds, whilst "additional related tenants" may be considered overcrowding and addressed as a discretionary eviction ground, if the HMO rules do not kick in. Allan

Regarding the 3 months rent arrears - I believe its 1 months rent arrears over a period of 3 months. (This is what I have read from other sites). So if the tenant pays less than the rent due and the amount accumulates to 1 months rent over a period of 3 months grounds can kick in for eviction. But Rod is right, there is nothing good about this arrangement. Its a downward spiral to - supply, quality and increased rents irrespective of tent controls.

I believe the NLA are also up to speed on the new reforms, so Scottish landlords letting from today might also want to consider joining them.

On the whole, I believe the changes are sensible and it brings in much needed reforms - the old Scottish Shorthold Assured Tenancy (equivalent to English and Welsh AST) is unnecessarily complex compared to the English/Welsh system.

However, while private housing cases, including possessions, will be heard in the First Tier Property Tribunal, not the Sheriff's Court as previously, each case will allocated a full half day's hearing.... Fine in theory, but unworkable in practice.

However, Scottish landlords will no longer be able to rely on a no fault eviction notice. There are mandatory grounds that allow for the tenant to take back the property without proving wrongful behaviour on the part of the tenant, namely:
-Landlord intends to sell
-Landlord intends to refurbish
-Landlord intends to live in property

However, if a landlord were to use any of these grounds simply as an excuse to evict the tenant, if the tenant finds out later that the ground wasn't justified, the landlord can prosecuted. So if, for example, a landlord put the property up for sale then pulled out as soon as the tenant was evicted, the tenant need only search at Registers of Scotland for the new owner.

As most experienced landlords know only too well, no fault eviction notices are mostly used to get around a failing court system that has months of backlogs - as I've already stated, from what I've heard I don't believe the new system will address this.

Also, especially given that most private landlords are private individuals of limited means, IMHO completely eradicating no fault eviction is wrong - such an investor is vulnerable and should be able to simply change their mind about the agreement after a reasonable time has elapsed.

The other issue here is mortgage lenders - for this reason, I foresee it being harder to get a BTL mortgage against Scottish property.

The removal of no fault eviction will mean much less choice for Scottish tenants, and many landlords trying to buck the system by offering licences instead of full tenancies; in short, it's going to be like the 1970s again, unless institutional investors replace small landlords.

Scottish landlords with existing letting agreements can be reassured these changes are NOT retrospective - the agreement will remain a SAT with no fault eviction available; however, any renewal WILL be a PRT by default.

Knowing that we were losing the short assured tenancy it’s replacement is not as bad as it initially looked.

The two issues that will cause issues are Student Lets and anti social behaviour.

Because there is no maximum period there is no certainty when a property will be available so the current practice of Students taking the property well in advance of moving in becomes very ropey. Add to that Universities and providers of purpose built student accommodation are exempt from the new legislation giving them an advantage over private landlords and letting agents (Edinburgh University have recently started their own letting agency to take advantage of their exemption to the PRT).

Anti social behaviour is discretionary so you have to put together a case to get your property back and in reality how many neighbors etc. are going to turn up at the court to provide evidence.

As the new PRT has no minimum period and the tenant is only required to give 28 days notice to leave, there is the possibility they may after a week or so of moving in chose to move with the landlord incurring all the costs associated with tenant change over and further void. Hopefully the number of cases will be small but remains a risk to the LL.