New rental laws introduced in Scotland, biggest change for a generation

In the biggest change to the private rented sector in Scotland for a generation, new renting laws have come into force that will significantly affect the rights of 760,000 tenants.

From now on anyone signing a new tenancy will sign a new Private Residential Tenancy which will have no end date and can only be terminated by a tenant giving written notice to their landlord or by the landlord using one of 18 grounds for eviction.

This new tenancy will replace the Assured and Short Assured Tenancy. But this does not affect existing tenancies which will continue on their existing Short Assured Tenancy agreements until terminated by either landlord or tenant.

If you’ve lived in a property for longer than six months your landlord will have to give you at least 84 days’ notice to leave, unless you’re at fault. This effectively means the end to ‘no-fault’ evictions and tenants will have the right to challenge a wrongful termination.

Landlords will also benefit from a more accessible repossession process and a simplified way to give notice. Effectively the notice to quit and notice of proceedings processes has been scrapped and replaced by a simpler notice to leave process.

Landlords can now only increase rent once a year and are required to give tenants three months’ written notice of any rise. Tenants can challenge this rise if they think it is unfair.

Other changes mean that all landlord and tenant disputes will be heard in a new specialist tribunal and from January 2018 all letting agents will be required to register and adhere to a code of practice.

Scottish Housing Minister Kevin Stewart said the new tenancy will provide greater security and stability for tenants coupled with better safeguards for landlords, lenders and investors.

‘The private rental sector has grown substantially in recent years and now provides a place to call home for 760,000 people. This is the biggest change to the sector for a generation and will bring about significant improvements in private renting, benefiting both tenants and landlords,’ he explained.

‘We want to ensure everyone has a safe and warm place to call home. The new tenancy sits alongside our wider ambitions for housing in Scotland, not least our ambitious commitment to deliver at least 50,000 affordable homes during this Parliament, including that for rent,’ he added.

Another new piece of legislation means that local authorities can now apply to the Scottish Government to have an area designated as a Rent Pressure Zone (RPZ) if they think rents are rising too much in a certain area. A number of councils, including Edinburgh and Glasgow, have already indicated that they are considering zones.

‘This represents a new dawn for all private renters in Scotland. These new laws bring unprecedented security of tenure to private renters, with landlords now needing a good reason to evict tenants,’ said Graeme Brown, director of Shelter Scotland.
According to John Blackwood, chief executive for Scottish Association of Landlords, the new tenancy agreement will make life considerably easier for landlords. ‘The improved and clarified grounds for eviction, alongside a clearly defined process which we campaigned for will further help streamline the sector,’ he said.

‘The new clauses will make it easier for landlords to ensure contracts are fully compliant with the law as well as being easier for both them and tenants to understand, hopefully reducing tension and unnecessary disagreements,’ he pointed out.

‘We also hope this will make it easier to identify rogue landlords and drive them out of the sector whilst encouraging the overwhelming number of landlords who act responsibly to play their part in increasing the supply of housing available in Scotland,’ he added.

Bob Cherry, head of lettings for Galbraith, cautioned that there are elements in the new legislation which landlords need to be very careful about, in particular the fact that it will not be possible to terminate a new Private Residential Tenancy with notice, without cause.

‘However there are several aspects of this legislation which may make relationships between tenants and landlords more secure. For example, tenants will have improved security of tenure and whilst this could sometimes create difficulties for landlords who have a genuine reason to need to end a tenancy agreement, the vast majority of our landlords are seeking a long term let and the new PRTs will help to achieve this in many cases,’ he said.

‘Where the relationship between the tenant and the landlord does break down, there may be an element of streamlining the process for resolving disputes, but we will have to wait and see how this system operates in practice,’ he explained.

‘The key aspect for the industry to operate successfully is effective communication between the landlord and the tenant from day one of the tenancy and a willingness on both sides to work in close collaboration,’ he added.