Recent and upcoming changes: summary
From the end of 2017 and through 2018, major changes have taken and will take place in the private rented sector (PRS) with the introduction of two major pieces of new legislation and the transfer of court cases to the First-tier Tribunal (Housing and Property Chamber).
Below we have outlined a summary of these changes and the key dates. Members wil be kept updated at every stage via enews.
1 December 2017 – introduction of the Private Residential Tenancy (PRTs) regime
- New leases will be PRTs. Assured/short assured tenancies can no longer be created for new tenants;
- Landlords/tenants cannot agree a duration for the tenancy, only a start date;
- Landlords can no longer end a tenancy without giving a reason – they can end the tenancy at any time after the start date but only if one of 18 grounds for possession in the legislation apply;
- Tenants can end the tenancy at any time, provided they give at least 28 days’ notice in writing;
- Landlords are encouraged to use the Scottish Government’s recommended model lease template and must also issue guidance notes to tenants;
- Local authorities can apply to Scottish ministers for areas to be designated as Rent Pressure Zones, within which mid tenancy rent increases are capped.
1 December 2017 – First-tier Tribunal takes on PRS legal disputes
- Tribunal will deal with cases including those arising in relation to the new letting agents’ regime (see below), and transfer of tenancy dispute cases including evictions from the sheriff court for all tenancy types;
- The cost of legal action against tenants should be significantly reduced as unlike the sheriff court there is no fee to apply to the tribunal and it is envisaged that in most cases landlords will not need to use a solicitor;
- Tribunal hearings will be run and determined by a panel comprising a solicitor who specialises in PRS legislation and at least one property/housing expert.
31 January 2018 – letting agent code of practice comes into force
- Agents must adhere to a statutory code of practice from this date;
- Code sets out standards for all aspects of letting agency work and requires agents to hold professional indemnity and client money protection insurance and hold client money in a dedicated client account;
- If a current or former landlord or tenant believes that a letting agent they have let a property through or from has failed to comply with the code, and remains dissatisfied after raising their complaint with the agent, they can apply to the First-tier Tribunal;
- If the tribunal decides a letting agent has failed to comply with the code, it must issue an enforcement order setting out the steps the letting agent must take to rectify the problem and by when. An enforcement order may also require a letting agent to pay compensation.
1 October 2018 – deadline for letting agents to register with Scottish Ministers
- Agents must apply for registration online by this date;
- Key individuals within the agency must meet a training requirement at the point of registration.
Letting agent registration: essentials
From 31 January 2018 all those carrying out letting agency work in Scotland must comply with a statutory code of practice.
Landlords who only manage their own properties will not be required to comply. However, landlords who manage properties for friends or family members will probably need to comply unless they are acting under a power of attorney. Members – ask us for an advice callback to discuss whether your business will be required to comply.
Below is information on some key aspects of the requirements for letting agent registration, for more information please download “Factsheet on letting agent regulation with checklist” via the Resources section and members please contact us for an advice callback to discuss compliance in detail for your own business.
Qualifications and training
SAL sister organisation, Landlord Accreditation Scotland (LAS) in partnership with the Chartered Institute of Housing (CIH), offers a professional development programme called LETWELL Created specifically for Scottish letting professionals completing LETWELL is one of the routes to the qualification requirement and LAS also offers regular training courses which agents can attend to fulfil the ongoing training requirement.
Client Money Protection (CMP) insurance
We have arranged a policy for members offered at discounted rates – find out more via Lonsdale insurance brokers.
Procedures and documents
To help our Council of Letting Agent (CLA) members comply with the code we have produced a suite of over 30 template documents including written procedures, letters/emails and a management contract. These were emailed to our CLA members and can be found in the Resources section.
Client bank accounts
Landlords moving into letting agency work?
If you’re a landlord member and would like to change your membership to our Council of Letting Agents membership to access advice and letting agent documents then please contact us on 0131 564 0100.