If you rent out a residential property in Scotland, any new tenancies created from 1st December 2017 need to be in the new lease format.
The new system replaced the Short Assured Tenancy that had been in place for almost 30 years. The new lease format is called a Private Residential Tenancy (PRT).
If you are not aware, the main changes to the current tenancy rules are:
- There will no longer a specified lease term. There will be no minimum period and more importantly, the lease length is open ended. It is designed to give tenants greater security of tenure.
- A landlord will only be able to end the tenancy based on specific grounds. Currently a landlord can terminate the lease at the end of the lease term by serving 2 months notice, and does not have to give any reason. Under the new PRT rules, you will only be able to give notice for one of the specific grounds. These include if you wanted to sell the property, wanted to move back into the property, refurbish it, or the lender wanted to repossess the property.
- The main benefit to landlords is that the new PRT rules are intended to make it easier to gain possession if the tenant is in arrears and you need to apply for a court order to evict a tenant.
- The rent can only be increased once a year, by giving the tenant at least 3 months notice of the increase.
- As there is no fixed term, a tenant will be able to terminate the lease at any time on giving 28 days notice.
- A landlord will generally have to give either 28 days notice to end the lease if it has been less than six months or 84 days notice if more than six months to gain possession of the property using one of the grounds. The notice period will also depend on which ground is used.
Our view of how it will work in practice
At Douglas Dickson, our view of the new Private Residential Tenancy is that it will not make much practical difference as to how tenancies currently operate. We do not believe it will have any material impact as long as you properly vet your tenants.
Any Short Assured Tenancies (SAT) entered into prior to the new PRT coming into effect in will remain as an SAT and be bound by the old rules.
If you would like further information or discuss how we can help you, please get in touch.