A large shake up of the private rental sector begins in Scotland tomorrow with the introduction of Private Residential Tenancies replacing ASTs - in a move which is sure to be looked at carefully by the Westminster government.
From tomorrow every private tenancy agreed will be a PRT.
Critically, the major change is that there will be no end date and the Scottish Government, which is introducing the reform, says the four key objectives are:
- an open-ended tenancy, which means a landlord or an agent on his/her behalf will no longer be able to ask a tenant to leave simply because the fixed term has ended;
- more predictable rents and protection for tenants against excessive rent increases;
- the ability to introduce local rent caps for rent pressure areas;
- grounds for repossession that will allow landlords to regain possession in 18 specified circumstances.
At the root of the reform will be a new 'model tenancy agreement' which will include standardised tenancy terms; this will be available free of charge on the Scottish Government website in a digital version allowing agents and landlords to easily put together and send out a tenancy agreement suitable for their specific property.
There will be one notice when regaining possession of a property called a 'notice to leave' – this will replace the current 'notice to quit' and 'notice of proceedings'.
The 18 specific grounds for repossession include new grounds where the property has been abandoned or the landlord intends to sell. However, if a tenant has lived in the property for over six months there must be 84 days’ notice to leave in almost all circumstances.
It will be impossible for rent to be increased more than once a year and there must be three months’ notice of any rise; any rent increase can be referred to a rent officer, who can decide if they're fair.
Critically, there is separate but related legislation changing rent controls from tomorrow in Scotland.
Local councils will be able to apply to Scottish Ministers to have an area designated as a 'rent pressure zone' (RPZ) if they can prove that rents in the area are rising “too much”, the rent rises are causing problems for the tenants, and the local council is coming under pressure to provide housing or subsidise the cost of housing as a result.
If an area is designated as an RPZ, it means a cap (a maximum limit) is set on how much rents are allowed to increase for existing tenants with a private residential tenancy each year in that area.
Scottish Ministers must consult landlords' and tenants' representatives before they make any area a rent pressure zone.
You can see full details of the changes on the Scottish Government website here.