Leasing and Letting (Residential & Commercial)

Question 1

What factors affect rental property?

Answer 1

a. Legislation and policy reforms
b. Supply and demand i.e supply of new stock and increase in population
c. Economic factors i.e increase in jobs in an area, inflationary pressures, rent increases etc

Question 2

What recent influences has there been to the rental market?

Answer 2

a. COVID-19
b. Cost of living crisis

Question 3

What legislation is there in relation to the obligations for both landlords and tenants?

Answer 3

a. Private Housing (Tenancies) Scotland Act 2016
b. Housing (Scotland) Act 2006
c. Cost of Living (Tenant Protection)(Scotland) Act 2022

Question 4

What social factors can impact the relationship between landlord and tenant?

Answer 4

a. Anti-social behaviour including:
1. Noise nuisance
2. Vandalism
3. Harrassment
4. Environmental issues i.e rubbish dumping
5. Uncontrolled pets

Question 5

Talk me through the full process of leasing a residential property from start to completion.

Answer 5

1. Ensure all relevant documentation is organised i.e EPC, safety documentation etc
   2. Market the property
   
   3. Conduct viewings
   4. Complete a PRT lease and provide necessary documentation
   5. Collect deposit and lodge with deposit protection scheme
   6. Complete inventory of property
   7. Exchange keys

Question 6

What is the Private Housing (Tenancies) Scotland Act 2016 and when did it commence?

Answer 6

Commenced on 1st December 2017 and introduced the Private Residential Tenancy

Question 7

Why was the Private Housing (Tenancies) Scotland Act 2016 introduced?

Answer 7

To improve security, stability and predictability for tenants and provide safeguards for landlords, lenders and investors.

Question 8

What is a Private Residential Tenancy (PRT) and when did they come into effect?

Answer 8

a. All new tenancies from 1st December 2017 are to be a PRT
b. A PRT is an open-ended lease which continues until one or more of the 18 grounds for eviction are served.
c. No time limit on the lease, tenant has to serve 28 days notice to landlord

Question 9

What protection does a PRT offer tenants?

Answer 9

a. Landlords cannot evict a tenant after a certain period of time
b. Rent cannot go up more than once per year and 3 month’s notice must be provided.
c. If a tenant has been in a property over 6 months landlords must provide 84 days notice to leave (unless terms of the lease have been breached)
d. The First-tier tribunal offers support for tenants

Question 10

What is a Short Assured Tenancy?

Answer 10

a. Most tenancies before 1st December 2017 are Short Assured.
b. The tenancy is for at least 6 months
c. When it runs out it will automatically renew for the agree period of time

Question 11

What is an Assured Tenancy?

Answer 11

a. Assured tenancies started after 2nd January 1989
b. The lease ensure that the landlord cannot ask you to leave without giving a valid reason
c. To end an assured tenancy the tenant must provide notice of:
a. 28 days if lease less than 4 months
b. 40 days if longer than 4 months
d. A landlord must provide a Notice to Quit to the tenant to end a lease

Question 12

What are the duties of the landlord to provide information?

Answer 12

a. Duty to provide written terms of the tenancy and the “Easy-read notes for the Scottish Government model tenancy agreement”
a. This information must be provided before start of the tenancy
b. If the terms of the tenancy change after it’s started, the tenant must receive a document explaining the updated terms within 28 days of the changes coming into effect
c. To comply with GDPR landlord must issue tenants with a privacy notice

Question 13

What is a First-tier tribunal and what powers do they have?

Answer 13

a. Formed to deal with:
a. Rent and repair issues within the private housing sector,
b. Assisting landlords exercising their right of entry
c. Proceedings to help issues between homeowners and property factors

Question 14

When can a tenant apply to the First Tier Tribunal?

Answer 14

a. If the landlords doesn’t provide:
a. A written copy of all terms of the tenancy
b. The correct set of notes to accompany their written tenancy terms
c. A document explaining any updated terms of their tenancy within 28 days of the change
b. The tenant must provide 28 days’ notice to the landlord of their intention of apply to the First Tier tribunal

Question 15

What punishment is there for renting a property without being a registered landlord?

Answer 15

Served with a Rent Penalty Notice (which prevents charging rent) or fined up to £50,000.

Question 16

Under the 2016 Act what are the tenant responsibilities surrounding access for repairs?

Answer 16

a. Tenant must be provided with at least 48 hours notice
b. In an emergency situation the landlord doesn’t need to give 48 hours notice

Question 17

If a tenant has someone living with them who is not named in the tenancy, what must they do?

Answer 17

a. Tell the landlord in writing about the person who is:
a. Aged 16 or over
b. Not a joint tenant
c. Living with them in the property as their main home

Question 18

What is a rent review and how often can they be implemented?

Answer 18

a. A rent review is an increase in rent and it can be done once every 12 months.

Question 19

What is a Rent Pressure Zone and how are they designated?

Answer 19

a. A cap is set on how much rents are allowed to increase for existing tenants and PRTs each year in that area.
b. Areas can be designated as RPZs if:
a. Rents in the area are rising too much
b. Rent rises are causing problems for tenants
c. LA are under pressure to provide housing as a result

Question 20

What index are rent caps set against?

Answer 20

Consumer Price Index

Question 21

How long can a rent cap last?

Answer 21

Up to 5 years and applies to existing tenants with a PRT

Question 22

What are the 18 grounds for eviction?

Answer 22

1. Landlord Intends to Sell
2. Property to be sold by lender
3. Landlord intends to refurbish
4. Landlord intends to live in property
5. Family member intends to live in property
6. Landlord intents to use for non-residential purpose
7. Property required for religious purpose
8. Tenant is not an employee of the landlord
9. Tenant no longer in need of supported accommodation
10. Tenant not occupying let property
11. Tenant breached tenancy agreement
12. Tenant goes into rent arrears for more than 3 consecutive months
13. Tenant conducts criminal behaviour
14. Tenant conducts anti-social behaviour
15. Tenant associated with a criminal
16. Landlord has ceased to be registered
17. HMO licence has been revoked
18. Overcrowding statutory notice

Question 23

What are Housing renewal areas?

Answer 23

a. A Housing Renewal Area HRA is part of a local authority housing area that is in need of improvement to the condition and quality of the housing. If an area has been designated as a HRA the council will create a HRA action plan which sets out the required repairs / demolition.

***Think of the recent works to the local authority properties in Wester Hailes which had their render repaired.

Question 24

What is the tolerable standard?

Answer 24

a. Basic level of repair your property must meet to be fit for habitation. The local council can force you to carry out work to bring your property up to the tolerable standard.
A home may not be habitable if:
1. It has damp issues i.e penetrating or rising damp
2. It is not structurally stable
3. It does not have enough ventilation, natural light or heating
4. It is no insulated well enough
5. It doesn’t have an acceptable water supply
6. It doesn’t have an indoor toilet, a fixed bath or shower, and a wash basin with hot and cold water.

Question 25

What is the repairing standard?

Answer 25

a. Contained within the Housing (Scotland) Act 2006 and covers legal obligations of private landlords to ensure the property meets a minimum physical standard
The property must:
1. Be wind and water tight
2. Be structurally sound (including drains, gutters and downpipes)
3. Be connected to supplies of water, electricity and drainage
4. Ensure fixtures, fittings and appliances are in a reasonable state of repair
5. Ensure furnishings can be used safely
6. Have a suitable method of detecting and warning of fires or suspected fires

***Just think – “Reasonable state of repair”

Question 26

What is a tenancy deposit?

Answer 26

A sum of money that acts as a guarantee against damages, cleaning bills, unpaid bills, unpaid rent etc.

Question 27

What is the maximum amount that can be charged as a deposit?

Answer 27

It cannot be more than 2 month’s rent

Question 28

What deposit protection scheme providers are available in Scotland?

Answer 28

SDS - SafeDeposits Scotland
MDS - My Deposits Scotland

Question 29

How must a deposit be managed?

Answer 29

a. Once paid, the deposit must be lodged with a TDS within 30 working days of the beginning of the tenancy.
b. The landlord must provide the tenant with information regarding the deposit including:
1. The amount of money and date received
2. The date deposit paid into TDS
3. Details of the TDS paid into
3. Address of the property
4. Statement confirming the landlords registration

Question 30

What is a liferent?

Answer 30

A liferent is when the owner of a property allows someone else to have the benefit of it while ultimately passing on ultimate ownership to someone else.

For example, a parent may leave a property in liferent to their spouse but in fee to their child. The spouse cannot dispose of the property and when they die it becomes the child’s asset.

Question 31

What is an HMO property?

Answer 31

a. Houses in Multiple Occupation
b. When at least 3 tenants live in a property, forming more than one household and has share toilet, bathroom and kitchen facilities.

Question 32

What requirements are there to apply for an HMO licence?

Answer 32

a. The landlord requires an HMO licence.
b. The landlord must be registered with the local council.
c. Relevant documentation is available i.e gas safety certificat, PAT, Fire safety etc
d. The property meets the tolerable and repairing standard

Question 33

How can an HMO licence be revoked?

Answer 33

a. If the terms of the HMO licence are breached i.e the property fall into disrepair, the landlord is renting to more people than they have a licence for etc.

Question 34

What is a penalty charge notice?

Answer 34

Issued to a person under section 111 of the Housing (Scotland) Act 2006 where there has been a breach of their duty.

Question 35

What recent legislation has been introduced for residential properties in Scotland?

Answer 35

The Cost of Living (Tenant Protection) (Scotland) Act 2022

Question 36

What rent cap controls are in place?

Answer 36

a. On or after 6th September 2022 a landlord under a PRT may not increase the rent by more than the permitted rate

Question 37

What different commercial lease types are there?

Answer 37

FRI – Full Repairing and Insuring
IRI – Internal Repairing and Insuring

Question 38

What different types of ownership are their in the UK and what is used in Scotland?

Answer 38

a. Leasehold – An interest in a property held by a tenant from a landlord for a fixed time period. When the lease is finished the ownership reverts back to the landlord.
b. Freehold – The full ownership of a property for an unlimited time. It equates to outright ownership.
c. Commonhold – A form of Freehold for units within a building or block comprising separate properties and with all owners having a joint responsibility for the common parts.
d. Absolute Ownership is used in Scotland – Equates to Freehold.

Question 39

Can a landlord manage the letting of a property themselves?

Answer 39

A landlord can manage a property themselves however they should be a member of a landlord organisation such as The Scottish Association of Landlords (SAL) or Landlord Accreditation Scotland (LAS). They should also be registered with the local counc

Question 40

Who is responsible for arranging building insurance?

Answer 40

The landlord

Question 41

What common defects are associated with non-traditional properties?

Answer 41

a. Carbonisation of concrete structures causing steel reinforcements to rust and thus causing cracking and spalling of concrete
b. Structural problems following carbonisation
c. Poor thermal performance causing condensation, mould growth etc
d. Water ingress

Question 42

For short term lets in Scotland what is a control area?

Answer 42

Local authorities can designate ‘control areas’ where the change of use of a dwelling to a short term let will require planning permission.

Question 43

For short terms lets in Scotland, when must existing and new hosts apply for a licence?

Answer 43

New hosts require to apply for a short-term let licence
Existing hosts must apply for a licence before 1st October 2023

Question 44

When were the rules regarding short term lets in Scotland updated?

Answer 44

1st October 2022

Question 45

What are the mandatory conditions set out in the Short-Term Licensing Scheme 2022?

Answer 45

Repairing standard

Fire Safety

Gas Safety Certificate (within last 12 months)

EICR (last 5 years)

PAT

Legionella Risk Assessment

Building Insurance

Local council conditions

Question 46

What updates have there been to legislation regarding short term lets in Scotland?

Answer 46

Changes made in October 2022

New hosts (after October 2022) require to apply for a short-term let licence

Existing hosts must apply for a licence before 1st October 2023

Local authorities can designate ‘control areas’ where the change of use of a dwelling to a short term let will require planning permission.