Private Rented Sector Update on Scottish CAP Rules for 2016 October 2015 Janet McIntosh jm@seedandco.com Tel: 01361 882920 Jenni Douglas Seed & Co Tel: 07920 479 094 Email: jd@seedandco.com Seed & Co Cothill, Duns TD10 6YW

Changes over the next 12 months Update on Scottish CAP Rules for 2016 Changes over the next 12 months Introduction of the Private Residential Tenancy (PRT) Registration of Letting Agents Transfer of court cases to the First-Tier Tribunal Housing and Property Chamber October 2015 Jenni Douglas Seed & Co Tel: 07920 479 094 Email: jd@seedandco.com

Short Assured Tenancy (SAT) 30th November 2017 – Last day of the SAT Update on Scottish CAP Rules for 2016 Short Assured Tenancy (SAT) 30th November 2017 – Last day of the SAT Assured and Short Assured Tenancies can no longer be issued after this date AT5 documents and Tenant Information Packs will also no longer be required from the 30th November 2017 October 2015 Jenni Douglas Seed & Co Tel: 07920 479 094 Email: jd@seedandco.com

Private Residential Tenancy (PRT) Update on Scottish CAP Rules for 2016 Private Residential Tenancy (PRT) The Private Housing (Tenancies) (Scotland) Act 2016 will take effect from the 1st December 2017. Its purpose is to improve security for tenants and provide safeguards for landlords, lenders and investors. 1st December 2017 – Private Residential Tenancy comes into effect First-tier Tribunal also takes effect and will handle all Private Rental Sector disputes October 2015 Jenni Douglas Seed & Co Tel: 07920 479 094 Email: jd@seedandco.com

Update on Scottish PRT (cont.) CAP Rules for 2016 Jenni Douglas The New Lease The model lease is available and can be edited and completed online https://www.mygov.scot/tenancy-agreement-scotland/ All mandatory clauses are in bold and must be included in the lease The discretionary terms can be edited or removed depending on the property October 2015 Jenni Douglas Seed & Co Tel: 07920 479 094 Email: jd@seedandco.com

Update on Scottish Changes to the Lease CAP Rules for 2016 The new tenancy will be open-ended and will last until a tenant wishes to leave the let property or a landlord uses one (or more) of 18 grounds for eviction - Landlords and tenants cannot agree a duration for the tenancy, only a start date. Tenants and Landlords can end the tenancy at any time provided they give at least 28 days’ notice in writing. Landlords must give notice on one of the 18 grounds. Rent increases can only be done once a year and you must give the tenant three months’ notice of the increase. Simple notice when regaining possession of a property called a 'notice to leave' – this will replace the current 'notice to quit' and 'notice of proceedings' plus this can be emailed so there is no need to send it recorded delivery or use Sheriff Officers. October 2015 Jenni Douglas Seed & Co Tel: 07920 479 094 Email: jd@seedandco.com

Grounds for possession Update on Scottish CAP Rules for 2016 Grounds for possession The landlord can only end the tenancy if one of 18 grounds for possession apply. These are summarised below: - 1. Landlord intends to sell the property at market value within 3 months of tenant leaving (mandatory) 2. Property is to be sold by mortgage lender (mandatory) 3. Landlord intends to refurbish which will entail significantly disruptive works and it will be impracticable for the tenant to occupy the property during the work (mandatory) 4. Landlord intends to occupy the property as their principal home for at least 3 months (mandatory) 5. Family member intends to occupy the property as their principal home for at least 3 months (discretionary) 6. Landlord intends to use property for non-residential purpose (mandatory) 7. Property required for religious purpose (mandatory) 8. Tenant is no longer an employee of landlord (mandatory if application made within 12 months of tenant ceasing to be employee) October 2015 Jenni Douglas Seed & Co Tel: 07920 479 094 Email: jd@seedandco.com

Grounds for possession Update on Scottish CAP Rules for 2016 Grounds for possession 9. Tenant is no longer in need of supported accommodation (discretionary) 10. Tenant is not occupying the property (mandatory) 11. Tenant has breached tenancy agreement (but not rent clauses) (discretionary) 12. Tenant has owed some rent for 3 consecutive months (mandatory if on day of tribunal hearing tenant owes at least one months’ rent and arrears are not due to delay/failure in benefit payment) 13. Tenant convicted of using property for immoral/illegal purpose or convicted of offence committed at/near property (mandatory) 14. Tenant has acted in anti-social manner (discretionary) 15. Tenant associates with someone who has a criminal conviction or who has engaged in anti-social behaviour (discretionary) 16. Landlord has been refused registration or had registration revoked (discretionary) 17. Landlord’s HMO licence has been revoked (discretionary) 18. Overcrowding statutory notice has been served on the landlord (discretionary) October 2015 Jenni Douglas Seed & Co Tel: 07920 479 094 Email: jd@seedandco.com

Update on Scottish First-tier Tribunal CAP Rules for 2016 The tribunal will deal with cases including those arising in relation to the new letting agents’ regime and transfer of tenancy dispute cases including evictions from the sheriff court for all tenancy types; Cost of legal action should be reduced - There is no fee to apply to the tribunal and in most cases landlords will not need a solicitor Tribunal hearings will be run and determined by a panel comprising a solicitor who specialises in PRS legislation and at least one property/housing expert October 2015 Jenni Douglas Seed & Co Tel: 07920 479 094 Email: jd@seedandco.com

Letting Agent Code of Practice Update on Scottish CAP Rules for 2016 Letting Agent Code of Practice 31st January 2018 – Code of Practice comes into force Sets out standards for all aspects of letting agency work Requires agents to hold professional indemnity and client money protection insurance Must hold client money in a dedicated client account Landlords or Tenants may apply to the First-tier Tribunal if they feel a letting agent has failed to comply with the Code of Practice An enforcement order will be issued against the letting agent if they have failed to comply with the Code of Practice – this may require action to rectify the issue or order the letting agent to pay compensation October 2015 Jenni Douglas Seed & Co Tel: 07920 479 094 Email: jd@seedandco.com

Letting Agent - Registration Update on Scottish CAP Rules for 2016 Letting Agent - Registration Letting Agents must be registered online before 1st October 2018 Key individuals within the letting agency must have the required level of training before registration Only Registered Letting Agents can make decisions related to the management and letting of properties October 2015 Jenni Douglas Seed & Co Tel: 07920 479 094 Email: jd@seedandco.com

Before letting a property Update on Scottish CAP Rules for 2016 Before letting a property A quick run down of requirements for letting a property. Landlord Registration Houses registered Energy Performance Certificate Electrical Inspection Certificate – including all alarms Legionella inspection Landlord Gas Safety Certificate Letting Agent Registration Ingoing and outgoing Condition Report Registered with a Tenant Deposit scheme October 2015 Jenni Douglas Seed & Co Tel: 07920 479 094 Email: jd@seedandco.com

Update on Scottish CAP Rules for 2016 Any Questions? Jenni Douglas October 2015 Jenni Douglas Seed & Co Tel: 07920 479 094 Email: jd@seedandco.com