All change for Private Rented Tenancies

2017 will see a dramatic change in the legislation governing private residential tenancies in Scotland.

The Private Housing (Tenancies) (Scotland) Act 2016 (“the Act”) will introduce a new Scottish Private Residential Tenancy (SPRT), a “model” tenancy agreement based on statutory terms which will replace the assured and short assured tenancy for all future lets, and will introduce new streamlined processes for the creation and ending of the tenancy agreement.  

NB: A tenancy is a private residential tenancy when it is a property let to an individual as their principal home.

The new SPRT is likely to be in force by the end of 2017 and will introduce new security of tenure to tenants, including students renting from private landlords.  There will be new grounds (some mandatory, some discretionary) for possession but most importantly, there will no longer be the “no fault” ground for possession which landlords can currently rely on with the short assured tenancy. 

Other important changes to be introduced by the new SPRT include:

• There will be no minimum term and no pre-tenancy notices necessary.  The tenancy will have no “ish” or termination date. 
• The tenancy will continue indefinitely unless the tenant wants to leave or the landlord can rely on one of the grounds for repossession.
• There will be formal requirement for terminating a tenancy.  The only document required will be a notice to leave.
• Rent cannot be reviewed more than once in a 12 month period and reviews can only be effected on the landlord giving at least 3 months notice. 
• Tenant to notify the landlord of persons occupying the property over the age of 16
• Legislation allows a local authority to apply to the Scottish Ministers to impose a “rent pressure zone” which will enable the local authority to control rent increases in specific areas.
• Deposits cannot exceed two months rent.

Below are some of the most significant comparisons between the current tenancy regime and how this will change when the new SPRT is introduced.   

Type of Tenancy	Short Assured Tenancy (SAT)	Scottish Private Residential Tenancy (SPRT)
Creation of tenancy	Statutory Form AT5 required to create SAT	No pre-tenancy notices required
Form of Tenancy	Basic legal requirements but otherwise as agreed between the parties	Model tenancy agreement to based on statutory terms
Term	Minimum 6 months term must be granted.	No fixed term
End date	SAT has a termination (“ish”) date  on which the lease ends	No end date – once an SPRT has been created it will continue until terminated by one party
Termination process (by Tenant)	As per contractual agreement	On a date to be mutually agreed between landlord and tenant or 28 days
Termination process (by Landlord)	Notice to Quit and s33 Notice required giving 2 months notice.  No additional ground needed if SAT or Landlord can rely on the grounds for recovery set out in Schedule 5 of the Housing (Scotland) Act 1988	If tenant in occupation 6 months or less – 28 days If tenant in occupation more than 6 months – 84 days Landlord MUST be able to rely one or more ground(s) for recovery of possession
Disputes	Pre 1st December 2016 Private Rented Housing Panel Sheriff Court	From 1st December 2016 The Housing and Property Chamber First Tier Tribunal

Remember, any existing Short Assured Tenancies in place prior to the introduction of the new model tenancy agreement will continue on the same terms and conditions notwithstanding the introduction of the new Scottish Private Residential Tenancy, until such time as that SAT comes to an end.  The parties can opt to convert their existing tenancy to a new SPRT but the legislation does not require them to do so.  If an existing tenancy is inherited by a successor (under existing succession rules) it will become a SPRT.

Should you wish to discuss your individual circumstances with us in more detail please feel free to contact our Leasing Manager, Maureen Blease. or call our Property Department on 01224 868687.