Landlords fear and tenants hope as Housing Bill passes

The Private Housing (Tenancies) (Scotland) Bill was passed by the Scottish Parliament on 17 March 2016. The stated aim of the legislation is to create simpler tenancies, offer stability and security for private tenants and ensure predictability over rent increases. It also fundamentally changes the nature of the relationship between landlords and tenants from contractual to statutory. We will get a new tenancy type called a “private rented tenancy” which will replace the current assured and short assured regime. The Scottish Government has yet to confirm the precise date this new regime will start, but it is expected that it will come into effect some time in 2018 or possibly 2019.

The main measures introduced by the bill include:

• enhanced security for tenants, with the loss of the misnamed “no fault” ground, which allows landlords to seek possession of a property on the basis that the agreed period of let has come to an end;
• no defined term of a lease and no minimum period of let;
• new grounds for recovery of possession, some mandatory and some discretionary;
• rent increases limited to once every 12 months and with a right for tenants to refer matters to a rent officer;
• the opportunity for local authorities to implement restrictions on rent increases in areas where there are excessive rent increases, by the creation of rent pressure zones;
• simplification of notice requirements with the replacement of notices to quit, s 33 notices and s 19 notices (AT6) by a new notice to leave, with two notice periods for landlords and one for tenants and no need for pre-tenancy notices;
• introduction of a model tenancy agreement with mandatory clauses.

The Housing Minister has stated that the bill was necessary to “rebalance” the relationship between landlords and tenants. Reception has been polarised between tenant and landlord groups. The latter warn that the balance has shifted too far in favour of the tenant and of likely reduction in investment as landlords flee the sector, while the former are largely happy with the enhanced security of tenure. Only time will tell whether the bill, when it becomes an Act, will achieve what the Scottish Government set out to do and what impact, if any, it will have on investment and therefore the choice available for tenants.