Scottish Government moves to make tenancies ‘indefinite’

Feelings are running high in Scotland where the Scottish Government has launched a second consultation into a reform of the private rented sector, including the indefinite extension of a tenancy after an initial period of six months or a year.

The new paper underlines that the Government is already firmly “committed” to the removal of the no-fault ground in seeking possession of the property.

It means that landlords cannot reclaim their properties simply because a fixed rental term has come to an end.

The consultation, which runs until May 10, proposes 11 modernised grounds to use if they wish to regain possession of their property, including a new ground if they wish to sell.

It also proposes allowing tenants faced with rent rises to seek arbitration.

Specific measures may also be introduced to combat excessive increases in areas such as Aberdeen and the Lothians where rental demand is very strong.

The new paper, which has been welcomed by Shelter, may well provide something of a template for what could happen south of the border if Labour wins the election.

The latest consultation in Scotland, where letting agent fees have been banned since 2012, follows an initial consultation last year which received over 2,500 responses. Final proposals will be included in a Bill to be laid before the Scottish Parliament in the autumn.

Housing minister Margaret Burgess said: “These changes to existing tenancy laws are designed to improve security for tenants and provide safeguards for landlords, investors and lenders.

“Our vision is for a private rented sector that provides good quality homes and high management standards, inspires consumer confidence, and encourages growth through attracting increased investment.

“By creating a new and simplified system we will have better property management, while tenants and landlords will be provided with more clarity and a better understanding of what the tenancy agreement means for them.

“Tenants will have more security and can no longer be asked to leave their home simply because their tenancy agreement has reached its end date. They can assert their rights without fear of eviction.”

The consultation is here

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10 Comments

  1. Jones Associates

    I thought for a minute it was April Fools Day, the private rented sector is not social housing.  We have had very few serious tenant issues in 30 years but when they go wrong they go spectacularly wrong.  The process to end a bad tenancy can take a long time if the tenant is advised not to leave and in some cases it makes the lives of other occupiers a misery.  Labour/SNP will do very serious damage to the private rented sector with their views.

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  2. ray comer

    I fail to see how these proposals will lead to “growth through attracting increased investment” I would think most investment landlords will be running away from Scotland as fast as they can if this becomes law.

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  3. Brocket

    Many private landlords are already fed up with over bearing Scottish Governmant interference and over draconian legislation. Many are already selling up – so much for ‘attracting increased investment’. Time for landlords to fight back or simply invest elsewhere!

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  4. seenitall

    so lets say you have a not so good tenant, not serious enough to go to court over to evict but you just give 2 months notice no fault or blame and find better tenants you wont be allowed to do that.  The tenant benefits by not getting a bad reference.   So with the proposal you have to go to court, get a judgement against that tenant and get the property back to re-let. How will that help the landlord, how will that even help the tenant?

    What if a LL wants to sell, give notice, tenants leave, property doesnt sell, LL changes mind to re-let untill the sales market is better  will the owner be fined?

    Indefinite   – forever – who actually owns this property? the landlord or the Labour Government?          seriously. some pretty stupid people have even more of a stupid idea.

     

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  5. surreymac

    Oh well time to sell up my place in Scotland.  May get what I paid for it in 2005 on a good day with a following wind. My least successful investment ever. And now I will be told what I can and can’t do with my own property.

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  6. Ewan Foreman

    Rather than encourage new investment and increased tenant choice, in the Second Consultation the SG have focused (almost entirely) on removing landlord options in an effort to increase tenant occupancy rights and challenge “unscrupulous landlords”. Just as austerity will not lead to economic growth (ref: Nicola Sturgeon – leaders’ debate), tying landlords hands and focusing on a small minority of landlords who need to get with the programme (and could almost certainly be challenged by existing regs) are unlikely to lead to improved outcomes for tenants when all factors are considered.

    As well as the SG’s proposal to remove “no-fault” (a term conveniently created for the first consultation as far as I can work out), the consultation also outlined the SG’s commitment to deliver increased PRS “growth and investment”. Here is how the Council of Mortgage Lenders (126 members + 95% of UK mortgages) responded when asked if the no-fault ground for landlord repossession should be removed:

    ”No. Having entered into a contract to let their property for a fixed period it does not seem right that a landlord could only bring this to an end by having to use a mandatory ground for possession. We believe that landlords need to have confidence in their ability to end a tenancy when they need to do so otherwise this may discourage future investment in the sector”.

    It is therefore far from obvious how replacing no-fault with new mandatory (and discretionary) repossession grounds and setting up a Tribunal will assist growth and investment. If the hope is that new institutional investment will somehow fill the gap, it will be a very long wait.

    Removal of no-fault also raises significant questions about properties let to students (or in fact anybody making any longer term plans). In the second consultation the SG have reiterated their commitment to removing no-fault, but have not provided any answers regarding how to give a specified date of entry to new student tenants (very important when starting a new academic year) and at the same time provide extended occupancy rights to the current tenants (who may of course not necessarily be students). Clearly, it would be impossible to do both, and given that the SG also advise in the second consultation that they are “not seeking any further views” on the no-fault proposal, many landlords and agents who let (often extensively) to students will regard this decision as both unreasonable and premature. It may also suggest unhelpful pressure by strong campaign and political voices to remove no-fault regardless of the impracticalities.

    The most alarming aspect of the proposals however is their ability to encourage landlords to become increasingly risk averse and therefore push the PRS up-market. Given the urgent need to provide more good quality accommodation for lower income households, the current proposals may in reality lead to reduced tenant choice, significantly increased repossession complexity and some alarming holes emerging in the day to day management of private tenancies in Scotland.

    Everyone recognises that creating a modern, progressive and vibrant PRS is an extremely demanding task and will take time. Better to stay on the drawing board than introduce new legislation that will not actually deliver these goals.

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  7. surreymac

    Yes Ewan the law of unintended consequences. Often seen when government stick their noses into the property sector. It’s the same down here in London where investors previously buying £2 million properties in zone 1 are now buying 5 x £400k properties in the like Croydon and Sutton to avoid the possibility of mansion tax and punitive stamp. So we now have international investors swimming very firmly in the waters of the average Londoner trying to buy a home. Where previously there was no crossover. Result, less available property for home grown buyers getting on the ladder. Well done Ed.

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    1. Ewan Foreman

      Makes sense. Could it be that political agendas (and ideology) frequently have as much and more self-interest as what the Scottish Government like to call “unscrupulous landlords”?!!

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  8. seenitall

    forgot to add   –    also the tenants can sub let as well.

    do these sub tenants have an indefinite right also, how about if they decide to sublet?.  So Sub,sub tenants with an indefinite right to rent and no eay way to get them out?   and these sub tenants who will be doing the immigration checks on them?             Looks to me like one mother of a cluster copulation.

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  9. Robin

    I cannot understand what extra protection they are hoping to provide to tenants.   In 23 years I can seriously only recall a small handful of landlords who decided to end a tenancy only to re-let to new tenants, and these cases were all related to extremely poor tenant behaviour.  To take these cases to court would have involved untold additional stress and cost to all parties but the end result would have been the same.  Why is it is not widely understood by the lawmakers that landlords do NOT generally want tenancies to end and they will put up with all manner of breaches of the agreement to avoid having to re-let an empty property and incur more charges whilst no rent is being received.  We have many such tenancies even now, where various tenants have broken their contract in a variety of ways including rent arrears, running a business from the property, making alterations without consent, poor social behaviour etc, and yet the landlords still prefer them to stay on…..

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