Letting agent registration scheme also welcome, says Paul Harper
THE Housing (Scotland) Act received Royal Assent on 1 August, 2014. The Act introduces a register for letting agents and a Code of Practice which the Scottish Government hopes will promote higher standards of service and levels of professionalism by letting agents. It also provides for major changes to the private rented sector.
The Act involves the transfer of some civil cases relating to the private rented sector, including repossession and non-repossession actions and House in Multiple Occupation (HMO) appeals, from the sheriff court to the first tier tribunal (FTT). The FTT was established by the Tribunals (Scotland) Act 2014 and cases will be heard before three members of the FTT with specialist housing knowledge. The Scottish Government hopes that the introduction of a specialist private rented sector tribunal will provide tenants and landlords with access to specialist justice to resolve disputes.
It is however important to note that the Act does not change the legal basis for such actions or orders. They will still be based on issues of law and fact and previous case law on similar issues will be important. There is currently no date or timetable set for the transfer of private rented cases to the FTT and time will tell whether there is sufficient investment in the tribunal service to allow cases to proceed more quickly than they presently do in the sheriff court.
Landlords are under a duty to ensure that the property meets the repairing standard (as defined by the Housing (Scotland) Act 2006) at the start and at all times throughout the tenancy. The Private Rented Housing Panel (PRHP) will continue to deal with breaches of the repairing standard. Presently, only the tenant can bring a case to the PRHP, however, the 2014 Act provides that councils can make an application to the Private Rented Housing Panel to determine whether the repairing standard has been maintained. Section 23 (6A) further provides that anyone authorised by the local authority may inspect the property to assist the council in deciding whether to make an application to the PRHP. Even after the tenant has moved out of the property, under the new provisions, the local authority can still make an application to the PRHP, should it wish to do so.
The Act also amends the repairing standard and in order to comply with the repairing standard, landlords will be required to fit carbon monoxide detectors (Section 22A) and carry out electrical safety checks (Section 22B).
Currently there is no statutory regulatory framework for letting agents in place in Scotland, and the Act makes provision for regulation of letting agents and provides for the creation of a mandatory register for letting agents. A letting agent will have to undergo a fit and proper person test before they can be registered and those who do not register may be subject to a six months prison term, a fine of up to £50,000 or both. Similar factors to landlord registration will be considered, eg, any convictions for dishonesty, fraud, discrimination, and contravention of housing and landlord and tenant law.
There is an appeal process for prospective agents who have had their application refused and also for existing agents who have been removed from the register. Any appeal will be heard by the FTT and must be made within 21 days of being notified of the decision. As with the majority of actions before the FTT, appeals will be based on issues of law and fact and previous case law on similar issues will be important.
The Act also introduces a “Letting Agent Code of Practice” to which all letting agents must adhere. Additionally, the Act enables the FTT to make a range of enforcement orders to provide redress for tenants and landlords in cases where a letting agent has failed to comply with the Code of Practice. Failure to comply with such an order will be an offence, and the agent may be subject to a fine and/or ultimately, removal from the register.
Those in the industry have welcomed the introduction of a letting agent registration scheme and a code of practice which they hope will protect landlords and tenants and help to improve the reputation of letting agents.
• Paul Harper is a partner in Lindsays litigation team www.lindsays.co.uk