What does Scotland's Private Residential Tenancy mean for UK landlords?

A new type of tenancy comes into force in Scotland on 1st December. This tenancy will be known as the Private Residential Tenancy and it will replace assured and short assured tenancy agreements for all new tenancies in Scotland.

Whilst this regulation will only affect landlords in Scotland, it’s worth landlords throughout the UK taking notice because it’s likely that this will one day be promulgated south of the border.

What is the Private Residential Tenancy?

When dealing with a residential tenancy in Scotland that starts after on or after 1st December 2017 you’ll be talking about a Private Residential Tenancy. It will no longer be legal to create an assured or short assured tenancy. You will have to use the model Private Residential Tenancy agreement provided by the Scottish government, or create a contract that incorporates the contracts minimum clauses.

The Private Residential Tenancy aims to improve the private rented sector in Scotland by introducing industry-wide standards within which tenants and landlords operate.

The team at MakeUrMove have spent some time reviewing the new Private Residential Tenancy contract and whilst it may take some getting used to, on the whole, we believe this will have positive impacts for the private rented sector in Scotland.

The new tenancy will bring in the following changes and improvements:

• No fixed terms - Private Residential Tenancies will be open-ended which means Scottish landlords won’t be able to ask tenants to leave simply because they’ve been in a property for the agreed period as is the case with a short assured tenancy.
• Rent Increases - if you’re a Scottish landlord you will only be able to increase the rent once every 12 months and if your tenants feel the proposed increase is unfair they can refer it to a rent officer.
• Longer notice period - If your tenants have lived in your property for over 6 months unless they’ve broken a term in the tenancy agreement, you will have to give your tenants at least 84 days notice.
• Simpler notices - A simpler notice to leave process will be introduced
• Model tenancy agreement - the Scottish Government has published a ‘model private residential tenancy’ that landlords in Scotland may use. A landlord can use a different tenancy agreement as long as it sets out all of the statutory terms.
• Supporting notes - in addition to including the nine terms and being encouraged to use the ‘model private residential tenancy’ agreement, Scottish landlords will also need to supply tenants with the ‘Statutory Terms Supporting Notes’ within 28 days.

What will happen to assured or short assured tenancies when Private Residential Tenancies are introduced?

If you’re a Scottish landlord and you’re renting out your rental property via an assured or short assured tenancy on 1st December the tenancy will continue as normal until you or your tenants bring it to a close. If you want to create a new tenancy with your clients, this tenancy will have to be a private residential tenancy.

Why should Scottish landlords adhere to the private residential tenancy rules?

If you don’t give your tenants written terms of the tenancy or supply them with Notes when you are supposed to, they can apply to the First-Tier Tribunal for Scotland Housing and Property Chamber ("the Tribunal"). The Tribunal may then give your tenants a written tenancy and/or order you to pay your tenants up to three months' rent. So it’s important you get this right from the outset.

Will private residential tenancy laws affect landlords in the rest of the UK?

At the start of November, the government introduced the Draft Tenant Fees Bill which bans tenants being charged fees in England and Wales. This followed on from a similar piece of legislation introduced by the Scottish Government years earlier. On 26th August 2012, the Scottish Government confirmed that all charges (called premiums in the legislation) levied on tenants are illegal. As Governmnent policy is moving towards increased regulation in the private rented sector it’s likely that landlords in the rest of the UK will be made to comply with similar regulations in the future.

For more information please view the Scottish Government's Private Residential Tenancies: information for landlords.