Private Rented Housing (Scotland) Act 2011

Tuesday, August 30, 2011

Private Rented Housing (Scotland) Act 2011

The 31st of August 2011 sees the implementation of the first parts of the Private Rented Housing (Scotland) Act 2011 (the Act) as well as certain aspects of the Housing (Scotland) Act 2006 (the 2006 Act) relating to HMO licensing (Sections 124 to 166 and various schedules.

The soon-to-be implemented sections are listed in the schedule to the Private Rented Housing (Scotland) Act 2011 (Commencement No.1 and Saving Provision) Order 2011 and contrary to briefing notes circulated recently, does not include the obligation to state landlord registration numbers in property advertisements. That requirement is contained in Section 6 of the Act and as things stand there is no expectation in the Scottish Government that this section will be implemented imminently.

Indeed some of the parts of the Act are only being implemented to the extent of allowing the Scottish Ministers to issue further regulations and orders and have no direct affect until such further regulations and orders are made and are therefore not included in this article in any detail.

These relate to the provisions for Tenant Information Pack (Section 33) and for fees to be charged by local authorities for notices intimating the appointment of agents to manage properties (Section 4(a)). 

Additionally, there are some changes (Sections 36 and 37) relating to the relaxation of the rules for Future Long Leases and redemption of certain standard securities under the Land Tenure Reform (Scotland) Act 1974, which are of little relevance to most Agents and are therefore beyond the scope of this article.

I have also left out some technical amendments to the HMO licensing regime in the 2006 Act (Sections 13(1),(3) and (6), 15 and 16) as well as minor amendments to the Antisocial Behaviour Etc (Scotland Act 1984 (Section 10) and specific advice should be sought in relation to those aspects.

Fit and Proper Person: criminal record certificate - Section 2

In assessing whether a landlord is a 'Fit and Proper Person' to be registered as a private landlord, the relevant local authority will have the power to require an applicant for such a licence to produce a Criminal Record Certificate. This can only be requested if the local authority has reasonable grounds to suspect that information in an application for registration is or has become inaccurate. For the avoidance of any doubt, Section 1 of the Act which provides for additional 'considerations' when determining the 'Fit and Proper' test is not one of the sections implemented by the above Order. Again something that has been wrongly suggested by certain organisations circulating information about the Order.

Appointment of Agents (Offence) - Section 4(b)

This Section introduces a criminal offence should a registered landlord fail without a reasonable excuse to comply with their obligation under the Anti-Social Behaviour etc. (Scotland) Act 2004 (Section 88) to notify local authorities of the appointment of an Agent to manage a property.
The offence covers not only a total failure to notify the relevant local authority, but also where a notification contains material information which is false.

Punishment is subject to a maximum fine of £1,000 (currently), but as with all such matters there is the risk that conviction of such an offence could have a knock on effect on a landlord's future ability to pass the "Fit and Proper" test.

Penalty for Acting as an Unregistered Landlord etc - Section 7 

This simply increases the maximum fine for acting as an unregistered landlord from £5,000 to £50,000, whether that will have any practical affect or not remains to be seen, but presumably it is meant to have some deterrent capacity.

Penalty for certain offences in relation to HMOs - Section 14

Provides for an increase in the fine for operating unlicensed HMOs from £20,000 to £50,000.

Notices required for Termination of a Short Assured Tenancy - Section 34
   
This Section seeks to clarify a confusion that really should not have existed and confirms, what most knew already, that there is no requirement to serve an AT6 when seeking to recover possession of a property let under a Short Assured Tenancy under Section 33 of the Housing (Scotland) Act 1988.

All in all the above changes are not too extensive when in context of the Act itself.

Indeed one of the more vexing and important aspects for Agents in relation to Premiums (section 32) has not been implemented by this Order.

Not that the proposed changes to the definition contained in the Rent (Scotland) Act 1984 really affect the position greatly in any event as they simply add more description to what a Premium could be and leave the underlying test of conditionality unchanged.

The understanding is that, this aspect will not be implemented until the regulations provided for in the Act are available to allow certain specified charges to be made for the grant, renewal or continuation of Protected Tenancies (including all Assured Tenancies).

Author - Rory Cowan, a partner at Kerr Stirling, who provide the legal helpline service for residential lettings in Scotland.