On 1st August the Housing (Scotland) Act 2014 received Royal Assent. This Act introduces a mandatory register and a “Letting Agent Code of Practice” to which all letting agents must adhere, as well as making certain changes affecting the private rented sector. The Scottish Government hopes such amendments will raise the standard of services provided by letting agents.
The size of the private rented sector in Scotland has been increasing over the past years. Traditionally this sector has provided a flexible housing option to prospective tenants like students or those relocating for employment reasons. However, following on from the financial downturn, the sector has also become a housing option for those seeking longer term accommodation with many potential first time buyers finding accessing home ownership difficult.
The profile of landlords in the private sector has also changed. Many investors bought properties during the housing boom on a “Buy to Let” basis and, more recently in light of the housing market downturn, “reluctant landlords” unable to sell their properties have joined the sector.
Thus this recent legislation has been considered necessary to improve the condition of private sector homes and the standard of management in the sector. There are four significant changes brought about by the Act.
Firstly, a mandatory register has been brought into use. This requires that a letting agent must undergo a “fit and proper person” test before they can be registered and those who do not register may be subject to a six month’s prison term, a fine of up to £50,000 or indeed both.
Secondly, the Act introduces a “Letting Agent Code of Practice” to which all letting agents are bound. The First-Tier Tribunal (FTT) hopefully will now provide tenants and landlords with a specialist private rented sector tribunal. The Tribunal can now make a range of enforcement orders in cases where a letting agent has failed to comply with the Code of Practice. Failure to comply will be an offence and the agent may be subject to a fine and or ultimately removal from the Register.
Thirdly, some civil cases relating to the private rented sector, including repossession and non-repossession actions and House in Multiple Occupation (HMO) appeals, will now be heard by the FTT rather than the Sheriff Court. Time will tell if this switch allows cases to proceed more quickly.
Lastly, the Private Rented Housing Panel (PRHP) will continue to deal with breaches of the Repairing Standard. At the moment only tenants can bring a case to the PRHP but the 2014 Act now permits councils to make an application to the PRHP to decide whether the Repairing Standard has been maintained. The Act also amends the Repairing Standard in that all landlords now are required to fit carbon dioxide detectors and carry out electrical safety checks.
As estate agents in Glasgow, Mitchells Roberton can provide you with expert property advice. If you are a letting agent or a private landlord and need advice please contact Ross Leatham by email firstname.lastname@example.org or by telephone 0141 552 3422.
Please also see our article – A (Non-Comprehensive) To-Do-List For New Residential Landlords.