Flexibility is the key to tenancy reform

The consultation period for new rental rules ends on 28 December. Picture: Getty

The consultation period for the Scottish Government’s proposals for a new tenancy for the private rented sector ends on 28 December. Weslo Housing Management, principally through the work of its subsidiary, Weslo Property Management, has taken great interest in these proposals and broadly welcomes them as they seek to address the disparate needs and preferences of tenants in this growing sector. Clearly some tenants will need more secure long-term tenancies while others value the ability to move in and out of tenancies at short notice. A single private sector tenancy is proposed for all future lets and it is proposed to retain the “tenancy roll-over arrangements” where if neither side gives notice then the tenancy continues. Changes are also proposed regarding the notice to quit period where in place of the current variable notice periods there should be a fixed notice required between four and 16 weeks, dependant upon the length of occupancy by the tenant.

One of the most radical changes proposed in the recommendations is the proposal for a new list of grounds of possession, all of which are mandatory. It is not envisaged there will be any discretion residing in the court/tribunal.

The eight proposed grounds are: the landlord wants to sell; the mortgage lender wants to sell because landlord has broken loan conditions; the landlord or family member wants to live in the property; refurbishment is required; a change of use is required; the tenant has failed to pay full rent over three months, displayed anti-social behaviour, or broken any other term of the tenancy agreement.

We view this proposal for a new list of grounds for repossession as the most contentious of the new proposals.

These mandatory grounds are not spelled out in sufficient detail so that, for instance, the definition of what will constitute a “member of a family” wanting to live in the property is not specified. By the same token, the extent of refurbishment required to comply is not indicated. Similarly, it is not made clear whether the landlord has to have more than just a notion to sell or whether there requires to be any need to realise the capital investment in the property. What is exactly meant by failing to pay full rent over three months is also unspecified, leading to potential areas of confusion, for instance will a payment to reduce an arrears level below that of three month’s rent constitute a sufficient argument against any action for repossession.

One of the main aims of the new tenancy is to increase the security of tenants by ending the ability of landlords to end a tenancy without having to have a reason and this is of course welcome and overdue. The proposed simplified grounds for repossession however are all mandatory grounds where the court/tribunal has no option but to grant possession to the landlord however “unreasonable” it may be. This could undermine the confidence of tenants looking to this sector for longer term housing.

Given that the private rented sector has doubled in size since the turn of the century, and two of the fastest-growing group of tenants in that period have been families and people wanting to stay in the sector long term, what would assist in providing a level of security is to have a combination of more specifically defined mandatory grounds. Alternatively the grounds should be converted to discretionary, thus allowing tribunals to balance the needs of the landlord with that of tenants in a bespoke manner to better consider and reflect on the many differing circumstances which can, and will, prevail.

Against this background we note that the Housing (Scotland) Act 2014 provides for private rented sector civil cases to be heard by a new specialist first tier tribunal rather than in the sheriff court. These tribunals will have the same powers to evict as sheriffs, and while mandatory grounds will assist members in arriving at decisions, as we can see, attempts to clarify or simplify these matters by imposing a strict liability regime are fraught with danger.

In general, we feel the consultation document is light on detail. This is further underlined by the proposed model tenancy agreement containing suggested discretionary clauses but no indication of when they might be included.

In our view it is essential that clarification of this is included in the final document if it is to be successful in reaching its goal of working – and working well – for all tenants in the sector.

• Peter Robson is non-executive chair of Weslo Housing Management.

This article has input from Alice-Ann Jackson, non-executive director, www.weslo-housing.org