Until there s a home for everyone The Private Residential Tenancy James Battye, Private Renting Project Manager Lynne Cunningham, Solicitor Thursday, 1 02 November 2017
Reform timeline Scottish Government strategy for the private rented sector (2013) Private tenancy review group (2014) Consultation on a new tenancy (2014-15) Private Housing (Tenancies) (Scotland) Bill (2016) 2
Why reform the PRS tenancy? Short assured tenancy provides very limited security of tenure No fault eviction Tenancy law unclear and confusing for both landlord and tenant In need of modernisation Typical private renter has changed over time 3
% of households Why reform the PRS tenancy? Tenure of household by year (SHS 2016) 70 60 61 Owner Occupier 66 66 61 61 50 40 30 20 10 0 39 39 Buying with help of loan / mortgage 32 22 5 Owned outright Private Rent 31 32 30 29 Social Rent 23 23 23 14 15 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 *Please note the chart excludes 'other' tenure 4
% of households Why reform the PRS tenancy? Tenure of households by year for households where the highest income householder is aged between 16-34 years (SHS 2016) 80 70 60 50 40 30 20 10 0 53 53 48 Buying with help of 50 loan/mortgage 32 5 Social Rent 28 13 Private Rent 23 43 Owner Occupier 31 24 24 25 5 Owned outright 4 41 40 32 36 33 28 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 23 3 5
Creation of a PRT No new Short Assured Tenancies or Assured Tenancies after 1 December 2017 PRT = Individual, occupying, as separate dwelling & only or principal home Must not be on list of tenancies that cannot be PRTs Schedule 1 6
What about existing SATs & ATs? After 1 December 2017, intention is that they will continue to be SATs & ATs until terminated Conversion to a PRT - Schedule 5, Part 2, Paragraph 3 7
Significant Changes Security of Tenure - No ish (termination date) required and therefore PRT is 'open ended' - Section 4(a) Abolition of 'no explanation' ground for eviction i.e. S33 Notice & Notice to Quit But 18 eviction grounds, some mandatory, some discretionary 8
Written lease? No need for written lease to create PRT Section 3 But obligation to provide written lease - Section 10 First- Tier Tribunal can draw up lease & impose financial penalties 9
Tenancy Terms Statutory terms Schedule 2, Regulations currently in draft Rent receipts Rent increases Notification about other residents Subletting Access for repairs 10
Model Tenancy Agreement Landlords have the option of using the Scottish Government Model Private Residential Tenancy If landlords use the model tenancy then they are required to provide tenants with Easy Read Notes which set out their legal rights If landlords don t use the model then they are required to give the tenant the Private Residential Tenancy Statutory Terms Supporting Notes 11
Succession Sections 65-70 Sole tenant passes away & no-one to inherit, tenancy terminates Deceased joint tenant's interests terminate, remaining tenant's continue Sole tenant passes away & leaves partner. The bereaved partner can inherit tenancy if certain conditions are met Section 68 - deals with rights of other family members to inherit. Section 69 deals with Carer's entitlement to inherit 12
Termination by Tenant Tenant serves landlord with Notice. When? Must be in writing, given freely & state date on which tenancy is to end Minimum notice period - 28 days or agreement What if tenant changes mind? 13
Termination by Landlord All cases Service of Notice to Leave. It must: 1. Be in writing 2. Specify the day on which the landlord expects to be become entitled to make an application for an eviction order to the First-Tier Tribunal. 3. State eviction ground(s) 14
Notice to Leave - how much notice? 28 days or 84 days? 28 days when: Tenant has been occupying the property for less than 6 months OR When any of the following six reasons apply 15
Notice to Leave Cont. 1. Tenant is not occupying as his or her home 2. Tenant has breached terms of the tenancy 3. Tenant has been in rent arrears for 3 or more consecutive months 4. Tenant has a relevant conviction 5. Tenant has engaged in relevant anti-social behaviour 6. Tenant associates in the property with a person who has a relevant conviction or who has engaged in relevant anti-social behavior 16
Notice to Leave Cont. In all other cases, 84 days Tenant deemed to receive Notice 48 hours after it is sent Date stated in the Notice must be the day after the notice period expires 17
Notice to Leave Cont. Application to First-Tier Tribunal cannot be made until notice period expires - Section 54 Notice to leave expires after 6 months. Application to First-Tier Tribunal must be made whilst notice is 'live' - Section 55 18
Service of Notice to Leave Not specified in 2016 Act. Therefore - Interpretation and Legislative Reform (Scotland) Act 2010 Section 26 Personal delivery Recorded post to proper address deemed delivery 48 hours later Email if prior agreement in writing deemed to be received 48 hours later 19
Termination by Consent Tenancy terminates if tenant moves out after receiving valid Notice to Leave Termination date is the later of : 1. The date stated in the notice OR 2. The date the tenant moves out 20
Eviction Order Application to First-Tier Tribunal for Scotland (Housing & Property) Chamber rather than Sheriff Court Criteria for Making an Application to Tribunal: 1. Valid Notice to Leave served 2. Notice period must have ended (unless Tribunal agree otherwise) 3. Notice must still be in force (6 months) 4. Local Authority must have been notified 5. Application must be on the eviction ground stated in Notice 6. Permission of Tribunal required to add additional grounds. 21
18 Grounds for Eviction PART 1 Let Property Required for Another Purpose 1 Landlord intends to sell Mandatory 2 Property to be sold by lender Mandatory 3 Landlord intends to refurbish Mandatory 4 Landlord intends to live in property Mandatory 5 Family members intends to live in property Discretionary 6 Landlord intends to use for non-residential purpose Mandatory 7 Property required for religious purpose Mandatory 22
Grounds for Eviction Cont. PART 2 Tenant s Status 8 Not an employee Mandatory and Discretionary 9 No longer in need of supported accommodation Discretionary 23
Grounds for Eviction Cont. PART 3 - Tenant's Conduct 10 Not occupying let property Mandatory 11 Breach of tenancy agreement Discretionary 12 Rent arrears Discretionary and Mandatory 13 Criminal Behaviour Mandatory 14 Anti-Social Behaviour Discretionary 15 Association with a person who has relevant conviction or engaged in relevant antisocial behaviour Discretionary 24
Grounds for Eviction Cont. PART 4 Legal Impediment to Let Continuing 16 Landlord has ceased to be registered Discretionary 17 HMO licence has been revoked Discretionary 18 Overcrowding statutory notice Discretionary 25
Rent Arrears Ground for Eviction Mandatory if 3 conditions are met: 1. At beginning of day of Tribunal Hearing tenant has arrears of one or more months rent AND 2. Has been in arrears of any amount for a continuous period of 3 or more months AND 3. Arrears are not wholly or partly due to delay or failure in payment of benefits 26
Rent Arrears Ground for Eviction Discretionary if: 1. Tenant has been in arrears of rent for 3 or more consecutive months AND 2. It is reasonable to grant eviction order 27
Wrongful Termination Order Scenario 1 Eviction order granted by the Tribunal Tribunal misled into issuing the order by the landlord Scenario 2 Former tenant was misled into leaving the tenancy by the landlord 28
Wrongful Termination Order Cont. Penalty Payment of an amount not exceeding 6 months rent Tribunal send copy of the WTO to Local Authority 29
Rent increases Initial rents set by the market Only one increase permitted per year Landlords must serve their tenant with a rent increase notice three months notice required Increase shouldn t be out of step with open market rents Tenants can refer rent increases to a Rent Officer with option for further appeal to the First-tier Tribunal 30
Rent Pressure Zones Local authorities can apply to Scottish Ministers for a Rent Pressure Zone to apply in a defined area within their local authority area Initial rents still set by the market Mid-tenancy rent increases in a RPZ limited to at least CPI plus 1% Limited impact on affordability but does protect from dramatic rent increases 31
32 Questions & discussion