Scotland the Brave?

by Readers Question

8:25 AM, 30th November 2017
About A year ago

Scotland the Brave?

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Scotland the Brave?

From the 1st of December 2017 the new PRT ( Scotland ) kicks in, laying rest to the AST.
One of the key toxic terms enshrined in this new set up is – there is no fixed period for the tenant.

There is no lock in for tenants, they can give 28 days notice and up and leave. No peace of mind for the landlord regarding income streams. South of the border you have had section 24, north of the border we have had section 24, the new PRT ( cant kick a tenant out under the no fault clause) and the specter of rent controls. You think you have it tough ?

I rent out principally to students who normally have a 9 month term duration. To cover my annual rent and void periods the natural solution is to have rent 12/9 (annual rent paid over 9 months). The rent at that level would appear daunting – adding 30% to the advertised arrangement.

The question is – can I construct a rent schedule of 12/9 payment with 3 months rent free and not fall foul of some ambulance chasing lawyer claiming that this is a fixed period tenancy like the old AST s.
Opinions and views greatly accepted.

Frankly Scotland is a basket case run by the lunatic fringe. Everybody and I mean the entire population here is deemed “venerable” with every non nonsensical legislation being passed under this umbrella. The no lock in clause was based on the premise there maybe an abused partner who cannot leave a property as the fixed period aspect of the lease would place such a person in harms way.

I wish I was making this up but I followed very carefully the lead up to this legislation, the arguments presented by the ultra left quasi political lobbying group masquerading as a charity SHELTER and the silent representation by landlords ( because they are too busy complying with endless volume of legislation to run their affairs )

If you have leanings of exercising personal responsibility , wanting to stand on our own 2 feet and not relying on the state for your economic well being, I suggest one and all to think twice about moving up here.

I understand we have a North Korean delegation visiting our Parliament to advise us further on how the Private Rented Sector should be further developed. I do believe I read somewhere that imprisoning landlords for crimes against the state is to be introduced in an upcoming bill.

Asif



Comments

Neil Patterson

14:18 PM, 15th November 2017
About A year ago

Hi Asif,

I am afraid I am not an expert on Scottish tenancy law, but I would recommend you consider joining the Scottish Association of Landlords (SAL).

Please see: Scottish Private Residential Tenancy Agreement

>> https://www.property118.com/scottish-private-residential-tenancy-agreement/

AA

16:58 PM, 15th November 2017
About A year ago

Thanks Neil, think I need to. Apologies for the typos but as I was writing realisation of the pending implications got me really angry resulting in the furious hammering of the keyboard.

Rod Adams

9:39 AM, 16th November 2017
About A year ago

Asif, I feel your pain. I am a landlord in Scotland and also work for a leasing agent so we also have the added burden of agent registration looming! Registration along with the 74 page model tenancy produced by the Scottish Government is moing to lead to a major shake of letting agents. Some solicitors are already off loading their leasing departments as they no longer see it as a viable prospect.
Re your 12/9 scenario.... The danger is you will be uncompetitive unless everyone is doing it and it would seem unlikely that everyone will. The students will just go for a landlord who is charging a market rent and not trying to build in the costs of their voids by front loading the rental payments.
I've said it before on here, I predict a reduction in supply of rental stock, a reduction in quality and rising rents as a result. This will happen in the sector of the market which follows the rules, the unregulated market where landlords choose to not play by the rules will grow putting tenants at risk and legitmate landlords out of business.
Welcome to the pleasure dome!
As an aside, have you read the model tenancy? If it wasn't serious, some of it would be a laughable. For example, there is clause which states 'The tenant will maintain the garden in a reasonable manner.' WTF is that supposed to mean?

Regards,

Rod.

AA

16:49 PM, 16th November 2017
About A year ago

Hi Rod, I absolutely understand that unless all landlords front load rents to protect them from the void periods then I would be odd man out but the question is why would they not ?
Most landlords have mortgages which have to be serviced. The obligation does not disappear during a void period. Take Edinburgh, it has a substantial student population - 3 universities and 2 further education colleges.
Specific areas are student dominated. I cannot see landlords keeping rents at current levels and not accounting for the risks inherent of loss of rent due to finding replacement tenants when term time is up. What s your view on my rent schedule idea ? September - June rent = x July - August rent = 0 can that fly ?

Rod Adams

17:18 PM, 16th November 2017
About A year ago

Reply to the comment left by Asif Ahmed at 16/11/2017 - 16:49
I'm not sure if that would fly. What would happen after the 3 months at zero rent? The tenant has the right to stay but at what rent? Would that then be a rent increase which you would need to give 3 months notice for? Could the tenant refer the increase to the 1st tier tribunal as unfair? It opens up a lot of questions to which there are as yet no answers. Like all legislation, the government writes it but the courts interpret it and I'm not sure how your plan would be interpreted. I think the student market is one of the many areas that the legislation fails to cater for. We are all going to be on a fairly steep learning curve on this.

Regards,

Rod.

AA

10:29 AM, 17th November 2017
About A year ago

Hi Rod, I see exactly what you are alluding to. My blue sky thinking plan was to nominate the rent from August to May as the base rent. Submit to the tenant at the outset the intention to increase rent by that formula the Scottish Government are touting. But I see what you are saying, some freeloader may test the scenario of the rent going from zero in July to my "base rent". Its all a mess. Don't these fools understand the basic concept of profit and investment ?
Normal people look after the hand that feeds them - this is a race to the bottom.
I spoke with a letting agent yesterday, and boy did he sound depressed. Ah well, you heard it first - my rents are going up by at least the cost of my mortgages.

Jireh Homes

12:38 PM, 18th November 2017
About A year ago

The main issue with the new PRT and student lets is that there is no fixed date on when the LL can be sure they will leave, which then makes sighing up new students for the next year a challenge. But there is a potential work-around which has been discussed at SAl Branch Meetings.

Rod Adams

16:39 PM, 18th November 2017
About A year ago

Can you provide any more detail on the potential work around?

Regards,

Rod.

AA

20:25 PM, 18th November 2017
About A year ago

Yes can you ?

Rod Adams

9:23 AM, 20th November 2017
About A year ago

I suspect that any potential work around is really just wishful thinking. Unless the landlord can justify one of the 18 grounds for termination of the lease the tenant has the right to stay indefinitely. Any cunning scheme which contradicts this will most likely be over turned by the 1st tier tribunal in favour of the tenants with the potential for recompense to paid by the landlord to the tenant.

Financial inducement of the tenant may be a way forward but would be in no way binding if it contradicted the fundamentals of the legislation.

Regards,

Rod.

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