News from north of the border: Scottish court reforms
The Courts Reform (Scotland Act 2014) ("the Act") has been called “the single most important piece of legislation in the field of civil justice for over a century” .
Published 11 December 2017
The Private Housing (Tenancies) (Scotland) Act 2016, which came into force on 1 December 2017, is set to alter the landscape of residential tenancies in Scotland. The most significant change is the introduction of a new tenancy regime, the Private Residential Tenancy, and an end to the former system of assured and short assured tenancies.
From 1 December 2017, it is no longer possible to create an assured or short assured tenancy, and any attempt by a landlord to grant such a tenancy may not be enforceable. It is also no longer possible for landlords to impose a minimum tenancy term, or a tenancy end date. Rather, private residential tenancies will continue indefinitely until they are brought to an end, either by the tenant giving 28 days' notice or by the landlord evicting the tenant.
The Act introduced 18 grounds for eviction (a list of these can be found here). In order for a landlord to successfully evict a tenant, at least one of these grounds must be given. There is no longer provision for a 'no fault' eviction of tenants.
Existing assured tenancies and short assured tenancies, which continue by tacit relocation, continue in their present form until terminated. The position in respect of short assured tenancies, which continue by contractual agreement, however, is not so clear. According to published government advice, tenancies of this type can continue to renew under the Housing (Scotland) Act 1988 until either the landlord or the tenant bring it to an end by serving notice to quit. However, this advice runs contrary to statutory provisions in the 2016 Act, which state that such tenancies will become Private Residential Tenancies from 1 December 2017.
Until further guidance is published to clarify this uncertainty, letting agents should be aware that the advice provided by the Scottish Government may be unreliable and open to challenge by tenants. Landlords are advised to be cautious in following government advice until the position has been clarified.
Landlords are also prevented from raising rents more frequently than once per year, and tenants must be given three months' notice of any rent rise. Tenants are permitted to challenge a rent increase if they feel it is too high. Landlords are permitted to seek a refundable deposit of no more than two months' rent, but any other charges (such as premiums or administration fees) are not be permitted.
Ultimately, the new Act has the potential to simplify the rules of residential tenancies, and will free landlords and letting agents from the possible pitfalls of often confusing pre-tenancy notices. The scheme does, however, limit the freedom of landlords in substantial ways, and gives greater security of tenure to tenants. Letting agents should ensure they are fully aware of the new provisions so that they can provide advice to their clients.