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Landlords be prepared for the new rules…the countdown is on!

Posted: 31st March 2017

Ahead of the forthcoming changes facing private residential tenancies and letting agents, landlords should note these key updates.

The private rental sector will face significant changes over the next year with the introduction of the new ‘Private Residential Tenancy’ (expected to come into force at the end of this year) and the Letting Agent Regulations. However, there are a number of other recent legal developments all landlords should be aware of.

1. Creation of the First-tier Tribunal Housing and Property Chamber

The Housing and Property Chamber, which replaces the Private Rented Housing Panel (PRHP) and Homeowner Housing Panel (HHP), will now (from December 2016) issue decisions on rent and repair issues and assist landlords with exercising their right of entry.

As well as taking over the functions of the PRHP, as of December 2017, the Housing and Property Chamber will also hear private rented sector housing cases including eviction actions currently raised in the Sheriff Court.

Landlords should also note that the AT5 and AT6 forms and Tenant Information Pack have been updated to reflect the transfer of functions to the First-tier Tribunal. The updated documentation can be found on the Scottish Government website and should be used going forward.

2. Letting agent regulation enforcement date announced – less than a year to go!

The Letting Agent Code of Practice (Scotland) Regulations 2016 will come into force on 31 January 2018.

All letting agents must comply with the Code which introduces, amongst other duties, obligations on agents to have insurance, complaints procedures and client money handling processes in place by the enforcement date. Further preparatory work is expected to be needed including agents updating their terms of business, written policies and procedures to meet the new requirements.

Landlords may also wish to familiarise themselves with the Code to understand their agent’s duties.

The introduction of the Code of Practice is the first step in a wider framework of letting agent regulation which will include mandatory letting agent registration and minimum training requirements for key individuals in a letting agency.

As of September 2018, it will be an offence for letting agents to operate without being registered.

3. Immigration ‘Right to Rent’ checks to be introduced in Scotland?

The UK Government has voiced an intention to roll out the ‘Right to Rent’ scheme to Scotland. This was introduced by the Immigration Act 2014 and is currently in force across England. It places a duty on landlords to check the immigration status of prospective tenants to ensure they have right to occupy residential premises in the UK by asking them to produce identity documentation.

Landlords must refuse tenancies to those who cannot produce satisfactory evidence and breaching their duty under the scheme may mean up to five years’ imprisonment or a fine of up to £3,000.

At this stage it’s unclear how and when the scheme will be rolled out in Scotland. Landlords should keep up-to-date with developments and seek legal advice if they are in any way unclear about their duties given the potential criminal sanctions that can apply.

Business Comment

Business Comment is the Edinburgh Chamber of Commerce’s bi-monthly magazine. It provides insight on Edinburgh’s vibrant business community, with features on the city’s key sectors, interviews with leading figures and news on new business developments in the capital.
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