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Private Housing Tenancies (Scotland) Act 2016 - 23rd May 2016 - Click for larger version Private Housing Tenancies (Scotland) Act 2016 - 23rd May 2016

Wholesale changes are afoot in the Scottish domestic tenancy sector.

The stated aim of the new Act is to create simpler tenancies, offer increased security to tenants and ensure predictability in relation to rent increases.

The bill for the Private Housing Tenancies (Scotland) Act 2016 was passed by the Scottish Parliament on 17 March 2016 and given royal assent on 22 April 2016. It has not yet been confirmed precisely when the Act will come into force, but dates in 2017/18 have roughly been indicated.

The existing regime under the Housing (Scotland) Act 1988 was considered to have been developed in a “different age” and to be requiring complete reform.

Key changes will include:-

- A new form of tenancy - a “Private Rented Tenancy”. In relation to all future tenancies, it will apply rather than the current forms of Assured and Short Assured Tenancies. The legislative committee noted that while Short Assured Tenancies have become the norm, they were not actually intended to be used that often. The new form is intended to be clearer and simpler so that everybody understands their rights and obligations.

- The so called “no fault ground” for evicting a tenant – whereby a tenant must be evicted if a Short Assured Tenancy has come to its end and notices to quit have been competently served – will no longer exist. The rationale for this change is that “no tenant should be removed from their home without good reason”.

- Applications to recover possession of properties will be submitted to a Tribunal rather than the Sheriff Courts. This measure follows other recent moves to take business out of the Courts’ hands.

- New grounds for recovery of possession will be introduced. Eight grounds will be mandatory (if the ground is established, then the tenant must be evicted), seven will be discretionary (even if the ground is established, then there is still a discretion as to whether the tenant should be evicted) and a further two will have both mandatory and discretionary strands. Examples of mandatory grounds include if the landlord intends to sell or live in the property. In respect of rent arrears, eviction will be mandatory if for three or more months the tenant has been continuously in arrears of rent and on the day the case is considered the arrears are equal to, or greater than, one month’s rent — the Tribunal must also be satisfied that the arrears were not due to a delay or failure in the payment of a relevant benefit. Eviction will be discretionary if the tenant has been in arrears of rent (in any sum) for three or more months and the Tribunal is satisfied that it is reasonable on this basis to issue an eviction order.

- Rent increases will only be permitted in terms of the Act. It will only be competent to increase rent once every 12 months and tenants will be allowed to have any increase reviewed by a Rent Officer.

- Notice to quit requirements will be streamlined. Instead of Notices to Quit, Section 19 Notices (AT6s) and Section 33 Notices – a new “Notice to Leave” will be introduced. Notices will require to give minimum periods of notice of 28 or 84 days depending on the length of time the tenant has occupied the property.

The terms of the changes have been met with mixed reception. Some consider that the changes are too favourable to tenants, with concern that the changes will result in a less workable market and decrease of investment by landlords - ultimately leading to the changes being counterproductive for tenants. Others consider that the changes do not go far enough in favour of tenants in addressing the balance between landlords and tenants.

The implication that it is not a “good reason” to ask a tenant to leave a property because it was agreed that he or she would be entitled to live in the property for a certain period of time and that period has expired is interesting.

Perhaps the mandatory grounds will for all intents and purposes largely achieve the same end results – i.e. the mandatory grounds may be generally wide enough to cover most reasons that landlords would have sought to terminate the tenancy on the “no fault ground” anyway.

The approach of the Tribunals will be interesting to see. Even the “mandatory grounds” involve a significant element of discretion. For example, what will each Tribunal require in order to be satisfied that the landlord intends to live in the property? The Act does state that evidence tending to show that a landlord so intends will include an Affidavit from the landlord, but will this in itself be sufficient evidence?

Hopefully, the Act will achieve its aims to the benefit of both tenants and landlords. It remains to be seen.

Last updated: 1.08pm, Wednesday 25th May 2016

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