February 10, 2017
A New Private Rented Tenancy will be phased in towards the end of the year – but what does this mean for letting agents, landlords and tenants…with the lack of information supplied by the Government, does anyone actually know!!??
In two months time, on 30th November 2017, the Short Assured Tenancy Regime - which we have used in the private rented sector for almost 30 years - will start to be phased out. The regime will still operate for any existing tenancies, however whenever these tenants move out, any further tenants will now have to sign up to a new Private Rented Tenancy. So…if your tenants give you their two months notice from this point onwards, or one month* from November (*lease terms dependent), your replacement tenants should be offered a new Private Rented Tenancy
Or, at least we think they should!
DEADLINE SET FOR 1st DECEMBER…
The Scottish Government have set the deadline of 1st December for the new regime start date but, as of the date of writing, have yet to release the actual new documentation!! We hope to get it towards the end of October but that gives agents and landlords very little time to fully understand it and tailor it to their specific needs let alone issue it and then explain it to a tenant.
Normally as standard practise we will sign a new tenant up c 4-6 weeks before entry date. This gives the tenant’s time to plan for their move, start switching broadband, energy suppliers etc and generally secure their home prior to the end date of their current living arrangements. It also ensures the owner’s/landlord’s void is minimal and the property is occupied heated and ventilated - especially important in the winter months!
LACK OF UPDATED DOCUMENTATION CREATING UNCERTAINTY FOR TENANTS AND LANDLORDS…
However, just the other day we listed a property for let with an entry date of the 3rd December. So we are now in the position of showing prospective tenants around, yet even if they apply and pass our rigorous checks, we are currently unable to issue a lease to them!! In this instance they will suffer the worrying uncertainty of wondering if they really have secured their new home while the clock ticks down on their current tenure. Not a situation we are comfortable being forced to put people in.
The other issue is that our landlords will have paid for these checks and can only hope the tenants don't abandon their commitment, as if they do the landlord runs a risk of a void period as we would need to re-advertise closer to the entry date and this increases the chances of a longer void.
UNANSWERED QUESTIONS…
You may also get the situation whereby a landlord who self manages, doesn't even know the regime has changed and could offer a tenant a Short Assured Lease starting 1st December even though they will no longer be valid from this date. What happens in this scenario? Does this tenant effectively become an illegal occupier? A sitting tenant? Or a squatter!? What rights of repossession does the landlord have and what rights of tenure would the tenant have in this situation? All these questions need to be answered sooner rather than later by the Government.
It seems absolutely farcical to me that a major change to housing lawn is coming in and we don't even have the lease and legal notices to go with it. The lack of awareness of the changes is also quite staggering. Why hasn't the government been using the Landlord Registration (a register of all legal landlords in Scotland c. 380,000 properties) as a means of informing landlords of the changes? Why is the new regime being rolled out so quickly and the documentation being delivered so slowly to the sector who will be delivering and enforcing it??
CHANGE IS GOOD!!??...
On top of this we have the roll out of the new regulation and registration of letting agencies on the 31st January 2018 along with a new Code of Conduct and First Tier Tribunal! It really is all go and all change.
Don't misinterpret us - we welcome improvements to our sector. But how can we champion change and feasibly improve service at a time of turbulence, when as a sector we are left hanging and waiting ever so patiently for critical information to be supplied in order to make the changes set upon us efficiently and accurately.
I can envisage a situation where tenants who are due to move out early December won't be able to secure further accommodation due to the delays and confusion about what lease to give them! And landlords could potentially have empty properties as they haven't have time to review the changes and their rights before offering a tenancy amid the uncertainty.
Surely a double whammy and a perfect storm of empty properties alongside increased homelessness - just before Christmas no less - is more than enough to push the Government to prioritise issuing the updated documentation as a matter of urgency.
We at Chapmans however, are determined to stay ahead of the game...we have been managing client expectations about the impact of tenancies ending during the next few months. We are doing all we can to mitigate the uncertainty, but we cannot promise to deliver something that hasn't yet been delivered to us!
Useful links for Landlords: https://beta.gov.scot/publications/private-residential-tenancies-landlords-guide/
Useful links for Tenants: https://beta.gov.scot/publications/private-residential-tenancies-tenants-guide/Private%20residential%20tenancies%20-%20tenant%20guidance.pdf?inline=true