Tenancies (like people) come in all shapes and sizes. But when it comes to private sector residential tenancies they are usually either ‘assured’ tenancies or ‘short assured’ tenancies (both fall under the Housing (Scotland) Act 1988).
The ‘short assured’ tenancy is the most common type of tenancy used by landlords. As its name (‘short’) suggests it is the type where the landlord may recover possession of the property from the tenant more readily. So this Note focuses on the ‘short assured’ tenancy and aims to flag up the main things to consider – and there are quite a few – when a property owner is planning to let out their property to a residential tenant. It is not comprehensive: it simply gives an idea of the range of matters to be addressed before letting your property.
1. Landlord registration
- Owners who rent out property must register as landlords in advance with their local authority. This may be done online. (Certain property is exempt but this is exceptional.)
- Any landlord who has not sent in a valid landlord registration application is letting illegally.
- The maximum penalty for letting out property when not a registered landlord is £50,000.
- As from 1st June 2013 landlords have to include their landlord registration number in any adverts for the property.
2. Written agreement
In order to set up a ‘short assured’ tenancy three particular points must be covered:
- The agreement must be in writing.
- The landlord must serve a statutory form (known as an “AT5” form) on the tenant before the tenancy agreement is signed.
- The lease must be for at least six months.
3. Repairing standard
Landlords have a duty to ensure that the property they rent out meets what is called “the repairing standard”. Some of the key things this covers are:
- The apparatus for supplying water, gas, electricity, and for sanitation, space heating and heating water must be in proper working order.
- Any carpets, light fittings, white goods and household equipment must be in proper working order.
- The property must have suitable fire detectors – there should be at least one detector on each floor of the property and, if the alarms are installed after September 2007, they should be mains powered rather than battery powered.
- If the “repairing standard” is not met then the tenant may apply to the “Private Rented Housing Panel” who may order the landlord to carry out the necessary work.
4. Gas safety
Anyone letting property must comply with the Gas Safety (Installation and Use) Regulations 1998. In particular:
- Annual gas safety checks must be carried out on every gas appliance.
- A record of the annual gas safety check must be provided to a new tenant before they move in (and within 28 days of the check being completed for existing tenants). And the landlord must keep copies of these records for at least two years.
- The safety checks need to be carried out by a “Gas Safe” registered engineer (i.e. one with a Gas Safe Register ID card with their own unique licence number).
5. Electrical safety
- Under the Electrical Equipment (Safety) Regulations 1994 the landlord has a duty to ensure that electrical wiring and any electrical equipment provided for a tenant’s use is safe.
- In particular, if you supply items such as kettles, toasters, washing machines, or almost anything else with a plug on the end, these should be regularly checked (say, annually).
- An electrician employed to carry out such checks should be properly registered (e.g. with the NICEIC (the National Inspection Council for Electrical Installation Contracting) Domestic Installer Scheme).
6. Fire safety
- The requirement for fire-detectors was mentioned above.
- In particular, if furniture or furnishings are supplied with the let they must meet the fire resistance requirements of the Furniture and Furnishings (Fire) (Safety) Regulations 1988. Any item made after 1990 should have a symbol showing it to be fire resistant.
7. Tenant information packs
- As from 1st May 2013 a landlord has to give any new tenant a “tenant information pack” (under section 30A of the Housing (Scotland) Act 1988). You can view the prescribed Tenant Information Pack online at www.scotland.gov.uk/tenant/info
- The tenant information pack picks up on safety aspects – and more. (The Scottish Government guidance on the pack runs to 20 pages.)
- A landlord who fails to provide a tenant information pack to their tenant could face a fine of £500.
8. Houses in Multiple Occupation (HMOs)
The local authority where the property is situated deals with cases where an “HMO” licence is required. The section on Glasgow City Council’s website dealing with this aspect says:
“Your landlord should have a HMO licence if you live in a property where:
- at least three people live, and;
- the people who live there belong to three or more families; and
- the people who live there share a kitchen, bathroom or toilet.”
9. Energy performance certificates
- A landlord must be able to produce a valid “energy performance certificate” (“EPC”) free of charge to anyone interested in renting the property.
- Much like the multi-coloured sticker on new appliances, EPCs show how energy efficient a property is and give it a rating from A (very efficient) to G (inefficient).
- A landlord needs to know the EPC rating of their property and include the rating in any advertising.
- If a landlord does not provide an EPC, or fails to include the EPC rating in any advert for the property, they may be liable to a fine of up to £1,000.
- The Scottish Government has entered into protocols with a range of approved organisations to provide EPCs. A list of such organisations can be accessed here: https://www.scottishepcregister.org.uk/assessorsearch
10. A few more things
- If the landlord has a mortgage over the property in question the lender’s (advance) consent to the letting will usually be required.
- Rental income is taxable although certain expenditure on the property may be set against income to reduce the amount taxable. Capital gains tax “principal private residence relief” may be affected by the letting out of the property.
- Buildings cover and contents cover (if applicable) should be checked and insurers informed as required in relation to the proposed letting of the property.
- Landlords may not charge the tenant any service or administration fee in relation to granting the tenancy.
- If (as is usual) the tenant pays a deposit (e.g. to cover damage the tenant might do to the property) it must be paid into a recognised “tenancy deposit scheme” operated by a recognised provider. This must be done within 30 days of the start of the tenancy.
Note: This material is for indicative information purposes only and does not constitute any form of advice or recommendation by us. You should not rely upon it in making any decisions or taking or refraining from taking any action. If you would like us to advise you on any of the matters covered in this material, please contact Alison Gourley: firstname.lastname@example.org