The New Letting Landscape

On 1^st December 2017 new legislation came into effect that changed the way landlords and tenants enter into lease agreements. From that date, all new tenants moving into rental properties in Scotland have to sign a Private Rental Tenancy Agreement (PRT) instead of a Short Assured Tenancy (SAT) agreement.

The major difference between the agreements is that a PRT agreement has no fixed initial term i.e. 6 or 12 months. Indeed, there is no end date in the lease so a landlord or tenant can end their tenancy at any time, providing they adhere to the statutory notice periods and – in the case of landlords – can demonstrate they have valid eviction grounds.

Please note that the PRT is a model lease produced by the Scottish Government for all landlords to use and is the only residential agreement landlords and tenants can enter into. ACE Property is using this “model” tenancy and adding additional clauses to it to try to protect our clients investments.

There has been much publicity and, some negativity, around the new PRT. In particular, the “no fault clause” existing in the SAT but not in the PRT which some landlords have used to evict tenants has raised concerns. However in our now 13^th year of existence, we have used this “no fault clause” on less than 3 occasions so we think the negative consequences have been overblown.

A landlord may end a tenancy at any time after the start date, provided they have valid grounds for eviction and give the correct notice period. 18 grounds are listed and 8 of them are designated as mandatory which means that if the ground exists, the tenant must leave the property. In summary, if the landlord wishes to sell, refurbish, move into, convert to commercial usage, then the tenant must leave the property. A further ground makes it easier to remove a tenant for non-payment of rent than it would be under SAT rules.

 Where ACE Property (and other agents of our acquaintance) see a harsher climate is that if a tenant wants to leave, they may do so at any point after the start date, provided they give the landlord 28 days’ notice. They do not have to give a reason. Our view is that while some tenants may move in on day 1 and give notice to leave the next day, they will be in the small minority. As time goes on, the market place will adjust to such issues and we believe that through our strong referencing system and by working closely with other letting agents, we can avoid those tenants looking to exploit this new regulation.

The above is a very short summary (the model lease extends to 36 pages together with an additional 30 pages of notes) of the new letting environment as we see it. All landlords should familiarise themselves with this letting landscape and the following website will help https://beta.gov.scot/publications/private-residential-tenancies-landlords-guide/ 

To view a model PRT lease, visit https://beta.gov.scot/publications/scottish-government-model-private-residential-tenancy-agreement/

Should you require further information or would like to discuss the management of your property please do not hesitate to contact me. Alan Nash - alan@acepm.couk