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Legislation
Landlords, are you ready for the changes to EPC regulations ?
Landlords, are you ready for the changes to EPC regulations? EPC requirements are changing in Scotland as of 2025, where properties in the private rented sector (PRS) will be required to have an EPC rating of C at change of tenancy. Thereafter, all properties will be required to have a minimum rating of C by 2028. What is an EPC? EPC stands for Energy Performance Certificate which provides information on how energy efficient a property is. It is based on a rate scale from A (most efficient) to G (inefficient), it also provides measures towards the end of the report which can improve the energy efficiency of a home with rough costs. The rating of the EPC is a measure of the energy performance of the property itself (fabric) and its services (hot water, heating, and lighting). The higher the cost of running the property, the lower the energy rating will be. When are EPCs needed for rental properties? The EPC is required for advertising purposes and must be less than 10 years old at the point of advertising a rental property. The purpose is to give tenants an indicator on what it will cost to heat, light and maintain their home. What are the changes and how will it affect my rental property? Previously the Scottish Government intended on implementing a requirement to have a rating of D at change of tenancy in 2022. However, this proposal was not taken forward as a result of the Coronavirus pandemic. Therefore, changes to the regulations have now been implemented which require properties in the PRS to have a rating of C at change of tenancy from 2025. Thereafter all PRS properties will be required to have a rating of C by 2028. Exemptions will apply where the landlord can demonstrate that it is not technically feasible or cost effective to reach a rating of C. What can be done to improve the EPC rating? Attention to what is detailed in the report itself is crucial, as this will give you pointers on actions to take to increase the energy efficiency of the property. The recommendations on the report will vary from a small action (changing the type of lightbulbs) to larger works (wall cavity insulation). Some examples of what may be listed in the report are detailed below: Wall cavity insulation (very effective improvement and may also be funded through the Green Deal) Roof / loft insulation (very effective improvement which can lead to savings of up to 20%) Upgrade heating controls (room thermostats will switch the heating off when the room reaches a certain temperature, creating more heat efficiency) Low energy lighting for all fixed outlets (cheapest option, only has a small impact on the rating but every little helps!) Replace boiler with more efficient boiler (old boilers can be less than 70% efficient) Fit modern electric storage heaters (fan heaters are smaller and better insulated) Replace single glazing to double (one of the more costly options but will also improve the comfort of the property and make it more desirable to tenants) Increase hot water cylinder insulation (this could cut heat loss by 75%) Replace / remove any secondary forms of heating (the EPC software will assume that secondary forms of heating are used i.e., old gas fires which will most likely be very inefficient, the removal of these will remove the risk of this form of heating being included with the rating) In most cases, landlords will need to bear the upfront costs of improvements made but many of these will result in great improvements to the energy efficiency of the property over a 5 year period. At Cairn, we are currently working hard for our landlords and investigating any funding that may be available. However, if you have any questions meantime, please do not hesitate to contact your property manager who will be more than happy to answer any questions you have. Please contact our friendly team for our range of services on 0141 270 7878 for Glasgow and 0131 346 4646 for Edinburgh, or by email to enquiries@cairnletting.com
Legislation
COST OF LIVING (TENANT PROTECTION) (SCOTLAND) ACT 2022 – RENT INCREASE BAN UPDATE
Cost of Living (Tenant Protection) (Scotland) Act 2022 – Rent increase ban update. A coalition of letting bodies and landlords have submitted a Petition to the Courts against the discriminatory and unreasonable eviction and rent increase ban in Scotland. The Scottish Association of Landlords, Propertymark and Scottish Landlord and Estates have joined forces and are seeking judicial review of the Cost of Living (Tenant Protection) (Scotland) Act which was passed in October 2022. Landlords and property professionals have voiced concerns over this rushed and badly planned legislation. Many feel that this is an attack on private landlords, worsened now that the rent increase ban has been removed from the social rented sector as of 1 March 2023. For the private rented sector? As of 1 April 2023, landlords can increase the rent by 3%, or apply to the rent officer for a 6% increase, to cover increases in the ‘prescribed property costs’ which are: The interest payable on any mortgage or standard security over the rented property. Any insurance premium you pay which relates to offering the property for rent. For example, landlords’ insurance. Increases in premiums for building or property insurance are not included. Any service charges related to the rented property that the tenant pays towards as part of their rent if this was agreed between you and the tenant as part of the terms of the tenancy. Not the best deal for private landlords, who are also suffering through the cost of living crisis whilst being expected to carry tenant rent arrears and pay for maintenance and compliance. Not forgetting the eviction ban! So, can I increase my rent from 1 April 2023? Yes, for PRT tenancies, a rent increase notice can be served on the tenant from 1 April 2023. However, the legislation is clear that any notices issued before 1 April 2023, still fall within the 0% cap, even if the notice does not take effect until after 1 April 2023. For Assured and Short Assured Tenancies, rent increases are still permitted and not affected by the ban as long as the tenancy agreement has a rent increase clause. Rents can be increased to the market value per the terms of the clause, unless there is a specific formula stating otherwise. In such difficult times as these, it is now more important than ever to have a knowledgeable and qualified agent managing your rental property and your interests. If you would like to discuss your options of changing agent or letting your property, please contact our friendly team on 0141 270 7878 for Glasgow and 0131 346 4646 for Edinburgh, or by email to enquiries@cairnletting.com We also have a in house Compliance Manager who is more than happy to assist landlords facing difficult letting and eviction issues.
Legislation
Scottish Property – Cairn Legislation Update ( 9th November 2022 )
Cost of Living (Tenant Protection) (Scotland) Act 2022 Following our series of blogs on the rent increase and eviction ban, we can confirm that the Cost of Living (Tenant Protection) (Scotland) Act came into force on 28 October 2022. The legislation will be in force until at least 31 March 2023 and can be extended (with parliament agreement) to 30 September 2023 and again to March 2024. Rent increase ban Under the current legislation, any rent increase notices served on or after 6 September 2022 fall under the permitted rate cap of 0%. Meaning a landlord cannot increase a tenants rent on or after this date until the rate cap is either increased or removed. The permitted rate cap does not affect increase notices issued to tenants before 6 September 2022, these are still enforceable under the legislation. There are some options still available to landlords: Landlords can increase the rent between tenancies. Landlords can still increase the rent for Short Assured / Assured tenancies which have a rent increase clause within the lease. The cap does not affect rent increases for these tenancies, regardless of the date the increase was served if there is a rent increase clause within the contract. Landlords can apply to the Rent Service Scotland for an increase up to 3% to cover increases in the ‘prescribed property costs’. Prescribed property costs Prescribed property costs per the legislation are: The interest payable on any mortgage or standard security over the rented property. Any insurance premium you pay which relates to offering the property for rent. For example, landlords’ insurance. Increases in premiums for building or property insurance are not included. Any service charges related to the rented property that the tenant pays towards as part of their rent if this was agreed between you and the tenant as part of the terms of the tenancy. Landlords can apply to Rent Service Scotland to increase the tenants rent to recover up to 50% of the increase to the prescribed property costs above. This application can only be for prescribed costs in the last 6 months prior to the application being made. If Rent Service Scotland is assured that the landlord’s prescribed property costs have increased within the last 6 months and that the increase proposed by the landlord represents no more than 50% of those costs, the rent officer must order a rent increase. The maximum increase in rent permitted through this process is 3%. To apply to increase the rent landlords must complete the government application form, which can be found here: https://www.gov.scot/publications/rent-cap-private-landlord-guidance/documents/ Landlords are required to notify the tenant of their intention to increase the rent before the landlord form is submitted to Rent Service Scotland. The government has also provided wording for this notification which can be found here: https://www.gov.scot/publications/rent-cap-private-landlord-guidance/documents/ The rent increase comes into force 3 months and a day after the landlord issued notice to the tenants of the proposed increase. This legislation has also been written into the Private Residential Tenancy agreement (PRT). Eviction ban Under the legislation, the issuing of notices to end the tenancy is not banned. Landlords are still free to serve notice to end the tenancy if they wish to do so. In most cases, tenants vacate the property during the notice period, it is only when the tenant does not vacate the property that the restrictions may come into effect. If the tenant doesn’t leave at the end of the notice period, the landlord can still apply to the Housing and Property Chamber, First-tier Tribunal for Scotland for a formal eviction order. If and when the eviction order is granted, the legislation places restrictions on Sheriff Officers from enforcing this order and recovering the property for the landlord. The legislation states that evictions cannot be enforced until restrictions are lifted, or the order has been in force for 6 months, whichever is sooner. There are some exceptions to this restriction, which are detailed below. Exempt eviction grounds: The tenant is not occupying the Let Property as his or her only or principal home The tenant has a relevant criminal conviction The tenant has engaged in relevant antisocial behaviour The tenant has associated with a person who has a relevant conviction or has engaged in antisocial behaviour Let Property to be sold by the mortgage lender. The tenancy was granted to an employee and the Tenant is no longer an employee. New grounds have also been included in the PRT under the legislation which are exempt: The Landlord intends to sell the Let Property to alleviate financial hardship. The Landlord intends to live in the Let Property to alleviate financial hardship. The Tenant is in substantial rent arrears (equivalent to 6 months’ worth of rent). The above grounds also apply to Short Assured and Assured tenancy agreements, however the notice periods differ slightly per the terms of the lease. Landlords need to provide evidence to the Tribunal of the eviction ground being used / demonstrate their financial hardship. These could include: a letter of advice from an approved money advisor, local authority debt advice service, independent financial advisor or from a chartered accountant. an ‘affidavit’ stating that you are intending to sell the let property or to live in the let property. This is a particular type of statement which is sworn under oath There are other types of evidence which landlords can provide to the Tribunal to demonstrate financial hardship, such as: Information detailing your income Details of the things you are responsible for paying Any outstanding debts or payments which you need to make Information to show that you are not able to cover the essential things you have to pay for because you do not have enough money coming in Information to show that you are often unable to make any essential payments or repayments which you are required to make Information to show that you are having to borrow money in order to pay your bills Information to show that you are only able to make essential payments by selling things you own Information to show that you are on a formal debt management plan Information to show that you are bankrupt Information to show that you are unable to meet the costs of maintaining or repairing the let property to meet the standards you are required by law to meet as a landlord The Tribunal will consider all relevant information in the case, including any evidence or information provided to them, and decide whether it is reasonable to evict the tenant. For any eviction applications submitted to the Tribunal before 28 October 2022, these should still be heard as normal, and the eviction should be enforceable under the legislation as long as notice was served on the tenant prior to 6 September 2022. Our qualified and knowledgeable staff at Cairn are always on hand to support landlords with any queries they may have regarding rent increases or evictions during this ban. With the ever changing legislation being implemented on private residential landlords, it is imperative that landlords employ reputable and qualified agents to manage their properties in Scotland. This will ensure legislation is being followed and that the most recent and correct advice on how to manage tenancies is being received. At Cairn, we have fully qualified and friendly staff waiting to assist landlords with management of their properties, we also have an in-house Compliance Manager who is both ARLA and LETWELL qualified to assist landlords with more difficult tenancy issues. Please do not hesitate to contact us to obtain further information on our management services.
Legislation
Compliance Update – Electrical Installation Condition Reports
Compliance Update – Electrical Installation Condition Reports On 28th March 2022, changes were made to the wiring regulations that electrical inspectors must follow when conducting electrical installation condition reports (EICR’s). This change falls under ‘Amendment 2’ of the 18th Edition of the Wiring Regulations, BS7671:2018: https://www.niceic.com/18th-part-2 Changes were implemented originally with a 6-month grace period and became mandatory on 28th September 2022. These mandatory changes impact the way in which electricians code items during an EICR inspection. The two most notable changes are: All consumer units in every property must have Surge Protection Devices (SPD) installed. SPD’s provide protection against sudden spikes in voltage known as transient over-voltages. They safeguard the electrical installation from this, which consists of the consumer unit, wiring and accessories. SPD’s also provide protection to vulnerable equipment with sensitive electronic circuitry, such as computers, fire fighting systems and emergency lighting. Arc Fault Detection Devices (AFDDs) must now be installed in higher risk residential buildings, including: HMOs High rise flats Care homes Other properties where there is an increased risk of fire The AFDD is a circuit breaker which uses microprocessors to identify the presence of dangerous electrical arcs and disconnect the circuit affected. They are installed onto the consumer unit and are more sensitive than conventional circuit protection devices. As a result of this change to regulations, landlords may now note that their EICR checks are coming back as ‘unsatisfactory’ if the consumer unit fails and needs replaced, as all consumer units now require the appropriate SPD to be present. Any consumer units installed without the appropriate SPD would be classified as ‘non-compliant’, therefore it is mandatory that these works are undertaken if noted on the EICR. Similarly, the electrician will determine if the property is ‘higher risk’ (such as an HMO) and may mark the EICR certificate as ‘unsatisfactory’ because an AFDD is required as another level of protection. It is again mandatory that these works are undertaken if noted on the EICR. We appreciate that this could result in quite substantial costs for landlords to comply, therefore Cairn is working hard in the background to get the best deals on cost possible for our landlords with our approved and qualified contractors. Please be assured that you are in the best hands, however, should you have any questions regarding this, please do not hesitate to contact our friendly and qualified letting team, who will be more than happy to assist. Gemma Waters ( MARLA ) Operations, Compliance & Training Manager 18th October 2022
Legislation, Landlords
Legislation Update – Answers for Landlords
Rent increase and eviction ban Scotland Following our last blog on the rent increase and eviction ban issued on 6th September 2022, Cairn have been working hard in the background to obtain answers for landlords on how this will work in reality. We have received update today that The Cost of Living (Tenant Protection) (Scotland) Bill has now been published: Cost of Living (Tenant Protection) (Scotland) Bill 2022: overview – gov.scot (www.gov.scot) Overview of Bill The Scottish Government have produced this Bill, as it is believed that people who rent in Scotland are the most at risk of poverty due to the financial crisis. The emergency measures have been implemented to: Protect tenants with the cost of living crisis by stabilising housing costs Lessen stresses and impacts on the wellbeing of tenants by evictions being banned. Give tenants more time to find alternate accommodation when facing eviction Reduce unlawful evictions and also raise the level of damages paid to a tenant by the landlord if unlawfully evicted. If passed, the Bill intends to place an immediate ban on rent increase notices and a moratorium on evictions until at least 31st March 2023. Wording has also been included to allow legislation to be extended by two further periods of six months with Parliamentary approval. However, there is a requirement for legislation to be examined and reported on, every 3 three months to ensure that the Bill is proportionate and reflects the changing economic crisis. Rent increase ban The emergency legislation aims to set a permitted rate of rent increase, known as the ‘rent cap‘. The cap will be set to zero from 6th September 22 to at least 31st March 23. However, the Scottish Government do have the powers to vary this cap to take into consideration the economic crisis on a wider scale which we sincerely hope will be investigated, as it is not only tenants whom are struggling from the current crisis. The cap applies to any rent increase proposed on or after 6th September 22 and no rent increase can be issued whilst the cap of zero is in place. This legislation does not affect rent changes/increases between tenancies. The legislation does take into consideration the impact the cost crisis is having on landlords and has been updated to allow landlords to apply to a Rent Officer to increase the rent to cover some of the ‘prescribed costs‘ in the preceding six months. Prescribed costs are mortgage interest payments (for the let property) and landlord insurance (other than buildings or contents insurance) / service charges which the tenant is responsible for per the terms of the lease which the landlord has had to pay. The landlord will be required to provide evidence to the Rent Officer and where authorised, the landlord would be able to increase the rent by the lower of 50% of the increase in the ’prescribed costs‘ in the preceding six months, or 3% of the current rent level. Landlords and tenants will also have the ability to appeal the Rent Officers decision via the First-tier Tribunal for Scotland. Rent increases issued before 6th September 2022 It has been confirmed in the legislation that rent increase notices issued before 6th September 22, will still be enforceable after the required 3 month notice period to the tenant. However, tenants also has the right to apply to the Rent Officer to challenge any notices issued if they believe the increase has been set at an unfair level. Eviction ban The moratorium will stop enforcement action for induvial evictions over the next 6 months. However, safeguards have been implemented to allow enforcement of evictions in certain circumstances, these include: Cases of antisocial behaviour and criminal behaviour Cases of abandonment Substantial rent arrears (where at least 6 months worth of rent is owed at the point the eviction order is issued) Eviction applications submitted / orders issued before 6th September 2022 If an eviction order is granted before this legislation comes into force, or if a landlord has submitted an application for eviction with the Tribunal before the legislation comes into force, the case will not be affected by the moratorium. This also applies to an eviction notice issued to the tenant before 6th September 22 as these should still be enforceable in line with current legal requirements. Increases damages for unlawful evictions These changes have been implemented to discourage landlords from conducting unlawful evictions and if passed, seek to increase the award to tenants to the maximum amount of 36 months worth of rent. There is also a requirement being placed on the Tribunal to notify the relevant authorities (Police / local authority / landlord registration), that an order has been made against the landlord. With the ever changing legislation being implemented on private residential landlords, it is imperative that landlords employ reputable and qualified agents to manage their properties in Scotland. This will ensure legislation is being followed and that the most recent and correct advice on how to manage tenancies is being received. At Cairn, we have fully qualified and friendly staff waiting to assist landlords with management of their properties, we also have an in-house Compliance Manager who is both ARLA and LETWELL qualified to assist landlords with more difficult tenancy issues. Please do not hesitate to contact us to obtain further information on our management services.
Legislation, Buy To Let, Landlords, Property Investment
Tax Breaks for Landlords: Will Holyrood Follow Suit?
Tax Breaks for Landlords: Will Holyrood Follow Suit? It’s all change in the UK. We have a new Prime Minister, a new Chancellor, and a new (mini) budget. For landlords in England and Northern Ireland, the tax breaks described in Kwasi Kwarteng’s budget could represent tens of thousands of pounds in savings. But for their Scottish counterparts, it’s simply a case of waiting to see if Holyrood (the Scottish Government) follows suit. In this short blog post, we recap the mini-budget’s impact on landlords and share some thoughts on Holyrood’s potential response. How will the mini-budget affect landlords? In case you missed it, here are the main points from the mini-budget that’ll affect landlords: The basic income tax rate will be cut to 19p (from 20p) from April 2023. The 45% higher rate will be abolished and replaced with a single higher rate of 40%. Stamp duty land tax will be cut in England and Northern Ireland. The limit for buyers will be raised to £250k (from £125k) — or £425k for first-time buyers. The planned increase in corporation tax has been cancelled. It will remain at 19%. The planned rise in National Insurance contributions will be reversed from 6 November. According to an analysis by tax firm Blick Rothenberg in the Telegraph, the corporation tax rate remaining at 19% will save an incorporated landlord with £250,000 in rental profits £15,000 a year. Meanwhile, the change in Stamp Duty rates means landlords buying property worth up to £250k will have less to pay. Previously, buy-to-let investors had to pay a 3% surcharge on purchases up to £125k, and a further 5% on anything between £125,001 and £250k. Now it’ll be a straight 3% up to £250k, 8% between £250,001-£925,000, 13% between £925,001-£1.5m and 15% for anything £1.5m+. Example: Under the new rules, Stamp Duty for a property worth £249,000 in England will be £7,470, down from £9,950 under the old rules. However, much of this will not affect Scottish-based landlords The cut in additional rate income tax (from 45% to 40%) on earnings above £150,000 won’t apply in Scotland. The rate in Scotland will remain at 46% for the time being. Similarly, the cut in basic rate tax from 20p in the pound to 19p won’t be seen in Scotland. And the Stamp Duty cut will only apply in England and Northern Ireland. Scotland has its own system: Land and Buildings Transaction Tax (LBTT). The current LBTT rates mean buy-to-let investors need to pay a 3% surcharge on purchases up to £145k, 5% between £145,001-£250,000, 8% between £250,001-£325,000, 13% between £325,001-£750,000 and 15% for anything £750,001+. So, for a £249,000 property in Scotland, LBTT is currently £12,040 — a significant difference from south of the border. Will Holyrood mirror Westminster? That is the question. And right now, the answer seems to be “no.” The First Minister, Nicola Sturgeon, has heavily criticised the Chancellor’s decision to abolish the top rate of income tax and has hinted that she has no interest in “blindly following suit”. As it stands, the Scottish Government probably won’t make a final call on income tax rates until its draft budget is presented to Holyrood. We’ll be keeping a close eye on developments. If you’d like to get more posts like this in your inbox, sign up for our regular newsletter.
Legislation
Scottish Rent Freeze and Eviction Ban – the latest update
Our in-house Compliance Manager attended a webinar on 14th of September 2022 with Daryl McIntosh from ARLA in the hopes to obtain answers for our landlords on the latest bans implemented by the Scottish Government. Sadly, we did not obtain the answers to the questions which we had hoped for, however have gained further information and legislative insight for our landlords which is detailed below. This is where agents are crucially important, smaller landlords that manage their own properties should look at reputable agents whom will follow legislation and support the landlord and give correct advice to get through the financial crisis and ever changing regulations being forced upon them. We will continue to update our landlords as new information is received, however any immediate questions should be directed to our Compliance Manager at: gemma@cairnletting.com Many landlords may be aware that on the 6th of September 2022, the First Minister for Scotland announced an immediate ban on rent increases and evictions in the Scottish rental market. This is part of a larger legislative programme to make a ‘stronger and more resilient Scotland 2022 to 2023’. Eighteen bills are set to be introduced during the 2022 to 2023 parliamentary year and further information on this is provided below. However, we will firstly look at the immediate rent freeze and moratorium on evictions. This ban has been implemented by the Scottish Government to support tenants through the cost-of-living crisis and is the focus of the 2022-23 programme. The programme outlines emergency legislation which will be implemented until the 31st of March 2023 and puts in place freezes on rent increases and evictions, along with a new tenant’s rights campaign. A new website is also being created which will provide tenants with information on a range of grants and support available to help through the cost-of-living crisis. It is important to note here that all parliamentary business has been suspended because of the death of Queen Elizabeth II. This has provided Ministers with more time to work on emergency legislation before issuing this out to the public. Rent increase notices It has been made very clear to all that as of 06/09/22, an immediate ban is in place on issuing rent increase notices to tenants. This means that landlords cannot increase rents after 06/09/22 or before 31/03/23. This is a blanket ban across all sectors including Social Housing. What does this mean for rent increase notices issued before 06/09/22? Sadly, no one currently has the answer to this question until the legislation is issued to all sectors. Our advice to landlords would be to air on the side of caution. Some housing experts believe that Ministers may be currently trying to word the legislation in a way that it bans all increases including notices which do not take effect until after 06/09/22. If the legislation is worded in this way, it could result in landlords needing to refund tenants the increased amount collected so the best approach currently is to hold off enforcing any increase issued until the legislation is announced. What if the tenant has already agreed to the rent increase notice served before 06/09/22? Arguments have been made that this would fall under contractual law, and it would be illegal for the Scottish Government to ban this, however they may look to supersede contractual law and again, our best advice is for landlords to be cautious enforcing notices until the legislation is issued in full. Will the temporary regulations be extended after March 2023? Again, no one currently has the answer to this, but it is believed that the Scottish Government may continue renewing the legislation (as was done during COVID) until legislation is made permanent in Scotland. It is expected that many landlords will issue increase notices to tenants in January 2023 to take affect after March 2023, therefore the Government are most likely looking into this already to have measures in place to stop this from happening. Can the tenancy be ended, and a new agreement created at a higher rent? The current belief is no, however this has not been confirmed. Again, we would advise landlords against taking this approach as the Government could request for any increases to be returned to the tenant after the legislation is issued in full. When will the legislation be issued? Unfortunately, it could potentially take 3 months or more for this regulation to be passed by Parliament, but the First Minister is wanting this to be passed quickly. We are all in the dark until this regulation is passed and issued, therefore landlords are best to be cautious until further information is received. Evictions It has been confirmed that the First-tier Tribunal for Scotland, Housing and Property Chamber and Sheriff Officers have been given no guidance from the Scottish Government on how to interpret this ban. Sadly, the decision makers appear to be as much in the dark as we all are. One belief is that the COVID emergency legislation will be utilized for this ban. Can eviction notices still be served on tenants? In theory, yes. The eviction notice is merely a request from the landlord to get the property back from the tenant and it is believed that this would not be classified as an eviction. If the tenant agrees to vacate at the end of the notice (request from the landlord), then this should be seen as a mutual agreement to end the tenancy by both parties. However, we cannot guarantee this, and the regulation could potentially include reference to ban eviction notices being served. How that will work and be monitored in practice, we do not know. What happens if the tenant does not leave at the end of the notice to leave / quit? This is where the regulation will most likely take effect, it is suspected that there will be a ban on the Tribunal issuing eviction orders and a ban on Sheriff Officers enforcing these orders. We still recommend that applications are submitted to the Tribunal as we do suspect there will be backlog of applications that the Tribunal will need to work through after 31/03/23 (if the regulation is not extended). We saw this happening with the Tribunal during COVID legislation where there were massive delays on applications being heard due to the backlog received throughout the pandemic. Will all eviction grounds be banned? All eviction grounds have been permanently made as ‘discretionary’ following the Coronavirus (Recovery and Reform) (Scotland) Act 2022, where the Tribunal need to follow a ‘reasonableness test’ and ensure that pre action protocols for rent arrears have been followed. We suspect that similarly to the COVID legislation, some eviction grounds may still be heard such as tenant abandonment. However, we will be unable to confirm this until the regulation is issued. What will happen with applications made to the Tribunal before 06/09/22? Will these still be heard? Unfortunately, we are unable to answer this question as no guidance has been issued to the Tribunal or Sheriff Officers for pending cases / applications pre 06/09/22. We are aware that the Tribunal are currently still hearing cases, but this may cease shortly until the regulation is issued. What about an eviction order or rent order that has just been issued by the Tribunal, can this still be enforced? It is believed so, however would advise landlords to be directed by the Tribunal / Sheriff Officers on what they are currently authorised to do. We would suggest that landlords are cautious until regulations are issued in full. Legislative Programme 2022-2023 Housing Bills (2) – Rent Controls. As part of the Governments 2040 housing plan, it is intended that rent setting / rent pressure controls will be introduced to Scotland. It is believed that this will start from percentage based restrictions being implemented for rent increase notices. This will mean that landlords will only be able to increase rents in Scotland by a certain percentage determined by the Scottish Government or local authority. The end goal is rent setting which will dictate how much a landlord can increase a rent by. Housing Bill (2) – Energy Efficiency measures Currently there is no minimum standard set in the private rented sector as this was delayed due to the Coronavirus pandemic. However, it is expected that a consultation will be issued in 2022 setting a minimum banding in Scotland. We would strongly advise landlords to start planning / working towards banding now to avoid large upfront costs when this legislation deadline is issued. Cairn is currently in talks with energy efficiency specialists to see if there is funding available for landlords and we hope to issue information out to our landlords regarding this over the coming months. New Deal for Tenants By 2025 the Scottish Government intend to: Enhance rights for tenants, Implement new requirements for data collection on rents in the PRS, Implement cross-tenure housing standards, Introduce a new Private Rented Sector Regulation, and Legislation to reinforce a new successful system of national rent controls. Short term (holiday) lets legislation Many landlords may be inclined to move to holiday lets for their rented property due to the ever-changing legislation being placed in the PRS. However, the Scottish Government are also implementing regulations within this sector: Any new holiday let host/operator (owner), will need to apply to the local authority for a licence to operate as of 1stof October 2022. After this date, new operators/hosts must have a licence. Any existing operator/host will have to apply for a licence to operate by 1stof April 2023. As of 1stof July 2024 it will be illegal to operate without a licence in all circumstances. Ever considered renting out your property at a higher monthly rental figure with no stress as someone else is taking care of all the set up for you– sound too good to be true? With over 20 years of property management experience, particularly in the highly regulated HMO market, one of our services is also hosting cAIRn BNB which is a natural fit to our existing management services. We offer a strictly ‘hands on’ BNB experience, tailor-made specifically for you, whilst maximising your overall monthly rental income. We pay close attention to market trends and any upcoming local events to ensure all prices fall in line with accurate rental prices across the board. Cairn BNB presents a fantastic opportunity to earn higher income where the fast-paced environment is both exciting and highly profitable, as opposed to the traditional professional letting route. New hosts and operators (Did you know?) If you were not using your premises to provide short term lets before 1 October 2022, you cannot take bookings or receive guests until you have a licence. All hosts and operators need to have a licence by 1 July 2024. There are four types of licence for short term let accommodation Secondary letting– the letting of property where you do not normally live, for example a second home that is let to guests Home letting– using all or part of your own home for short-term lets, whilst you are absent. An example of this could be whilst you are on holiday Home sharing– using all or part of your own home for short-term lets, whilst you are there Home letting and home sharing– operating short-term lets from your own home while you are living there and for periods when you are absent With the ever changing legislation being implemented on private residential landlords, it is imperative that landlords employ reputable and qualified agents to manage their properties in Scotland to ensure legislation is being followed and they are receiving the most recent and correct advice on how to manage their tenancies. At Cairn, we have fully qualified and friendly staff waiting to assist landlords with management of their properties, please contact us to obtain further information on our management services.
Legislation, AirBNB, Edinburgh
cAIRnBNB
Ever considered renting out your property at a higher monthly rental figure with no stress as someone else is taking care of all the set up for you– sound too good to be true? With over 20 years of property management experience, particularly in the highly regulated HMO market, we are delighted to announce Cairn BNB which is a natural fit to our existing management services. We offer a strictly ‘hands on’ BNB experience, tailor-made specifically for you, whilst maximising your overall monthly rental income. We pay close attention to market trends and any upcoming local events to ensure all prices fall in line with accurate rental prices across the board. Cairn BNB presents a fantastic opportunity to earn higher income where the fast-paced environment is both exciting and highly profitable, as opposed to the traditional professional letting route. Read about the new legislation directive from the Scottish Government – click here. New hosts and operators ( Did you know ? ) If you were not using your premises to provide short term lets before 1 October 2022, you cannot take bookings or receive guests until you have a licence. All hosts and operators need to have a licence by 1 July 2024. There are four types of licence for short term let accommodation Secondary letting – the letting of property where you do not normally live, for example a second home that is let to guests Home letting – using all or part of your own home for short-term lets, whilst you are absent. An example of this could be whilst you are on holiday Home sharing – using all or part of your own home for short-term lets, whilst you are there Home letting and home sharing – operating short-term lets from your own home while you are living there and for periods when you are absent You can find the latest information about the regulation of short term lets at https://www.gov.scot/publications/short-term-lets/. At Cairn we have a dedicated AirBnb ( Short-term Let ) specialist, Mark Coll – today we asked Mark for his comments on the new legislation changes. “At this moment in time, the information on licensing for short term lets is very vague where more information will be released when rules come into force on October 1st. What we do know is that any properties currently operating before this date can still operate under the assumption that landlords apply for a licence before April 1st 2023 and have it granted by July 1st 2024. Any new short term letting landlords operating after October 1st are not allowed to let their properties out until a licence has been applied for and has been granted otherwise there could be a firm penalty – this is extremely important to know and to not get caught out. My advice would be to be prepare in advance of this date and start contacting your local authorities now for more information to get the best footing for when the legislation takes effect. After October 1st we will have a much clearer vision of the direction and future of short term lets where Cairn BnB will be the first to offer any advice and guidance on the next steps to getting things up and running for your property on the short term letting market. Please get in touch if you’d like to know more information on this or if you would like to get up and running prior to the October 1st deadline.”
Legislation
Legislation Update
LEGISLATION UPDATE BLOG ( Date: 31.3.22 ) The Scottish Government has announced that from the 31st March 2022, landlords will no longer need to serve 6 months notice to bring a tenancy to an end. The 6 month notice rule was introduced by the Scottish Government as part of a number of emergency laws that were introduced into the Scottish Private Rented Sector in 2020 as a response designed to help make the rental sector more stable during the upheaval that the COVID pandemic caused on the market. The Scottish Government had explored making the 6 month notice rule permanent as part of their agenda to create a New Deal for Tenants, but the evidence shows that this particular rule change has not been good for the sector. The Scottish Association of Landlords presented evidence to the Government showing that, due to the extended notice periods, some tenants were accruing rent arrears that they remain liable for and could never afford to repay resulting in a negative situation for all concerned. The rolling back of notice periods to the pre-pandemic rules (where landlords serve either 28 days or 84 days’ notice on tenants depending on the circumstances) is very good news for the sector as there is a definite shortage of new landlords and rental properties which is having an extremely negative impact on the number of available properties in the market. This in turn is heating the market and driving asking rents up as more and more prospective tenants compete for fewer properties. The government also announced this week that the temporary downgrading of compulsory grounds for repossession to discretionary, which was part of the same emergency laws introduced in 2020, will continue until September 2022 and will thereafter be reviewed again. This shouldn’t affect most cases for repossession as long as landlords can demonstrate a strong enough case for taking back their properties under one of the grounds for doing so. The Scottish Government is currently considering the simple measure of restricting rent levels on the market, but the evidence shows that a change like this would have a negative impact on the number of landlords and properties in the market, exacerbating many of the issues the government are trying to address. This highlights the importance for landlords to have qualified and knowledgeable agents managing their properties to ensure that they are receiving the most up to date and accurate advice relating to eviction actions and general management of the property. If you need any help with evictions, tribunal applications or management of your property, please do not hesitate to contact Cairn and one of our qualified and experienced property managers will be on hand to help with all of your queries. For Glasgow 0141 270 7878, Edinburgh 0131 346 4646 or Portobello 0131 622 6215
