Proposals for regulations and policy supporting the Private Housing (Tenancies) (Scotland) Act 2016: analysis of consultation responses, 1 March 2017

Section 1: Prescribed notices

In Section 1 the consultation paper asks for respondents' views on 6 proposed prescribed notices, as set out under the Private Housing (Tenancies) (Scotland) Act 2016 (the Act). These are:

1. Tenant's notification to a landlord of a referral to the First tier tribunal (the Tribunal) under Section 14 or 16.
2. Landlord's notification to a tenant of a rent increase under Section 22.
3. Tenant's rent increase referral to Rent Service Scotland under Section 24(1).
4. Landlord's application for a rent increase as a result of improvements made to a property in a rent pressure zone under Section 43(1)
5. Subtenant's notice to leave under Section 61.
6. Notice to leave under Section 62(1)(d).

The consultation paper asks a set of four questions about each prescribed notice, namely whether:

• It is fit for purpose;
• It is easily understood;
• It should have additional content; and
• Anything that should be removed.

There was also an opportunity for respondents to comment at each question.

As noted above, in some parts of the report, the analysis presented draws on the further comments made across a small number of questions. This applies across each of the four sets of questions (as set out above) between Question 1 to 24. Within each set of four questions, respondents frequently cross-referenced between or repeated comments across the questions. In particular, for a number of respondents 'being fit for purpose' and 'easily understood' were very closely connected. Respondents also frequently made suggestions for changes under the same comments where they raised an issue or concern.

Given these issues, the analysis presented below has therefore been structured to allow all comments to be taken into account but to avoid repetition. The analysis under each Notice is structured under one or more of the following as required:

• Issues raised.
• Points for clarification.
• Suggested changes or additions.
• Suggestions for content to be removed.

Tenant's notification to a landlord of a referral to the first tier tribunal (the Tribunal) under Section 14 or 16. (Questions 1-4)

A summary of responses to Questions 1-4 is set out in Table 2 below. A full breakdown of responses to each question by respondent type is presented in Annex 2.

Table 2: Do you think the proposed 'Tenant's notification to a landlord of a referral to the Tribunal under section 14 and 16 of the 2016 Act':

		Yes	No	Unsure	Not answered
Question 1:	Is fit for purpose?	40	18	5	7
Question 2:	Is easily understood?	36	22	5	7
Question 3:	Should have additional content?	28	32	1	8
Question 4:	Should have anything removed?	10	47	4	9

The majority of respondents who answered these questions thought this notice was fit for purpose and easily understood. A small majority thought that no additional content was required and the majority thought that nothing should be removed.

Comments on the 'Tenant's notification to a landlord of a referral to the first tier tribunal (the Tribunal) under Section 14 or 16'

Around 43 respondents made a further comment at one or more of Questions 1-4.

Issues raised

The issues raised related primarily to the Notice (as opposed to the Notes) and included:

• The Notice provides for it being served on a letting agent, but the person with sole responsibility is the landlord; the concern was that the landlord could find a penalty is imposed upon them despite them being unaware of any failures.
• There is no penalty attributable to a landlord, agent or tenant for wrongful or malicious reporting, nor a warning or declaration to them not to misrepresent the facts.

Points for clarification

Issues for clarification included whether, for the digital forms, there will be processes for returning incorrect or incomplete forms and if there will be any legal consequences associated with an incorrectly completed form.

Suggested changes or additions

Specific changes suggested included:

• The title should be changed to "Tenant's notification to a landlord of failure to supply written tenancy terms or specified information to the tenant".
• The language of the Notice should be adjusted so that tenants are not put off applying to the Tribunal because the Notice seems confrontational.
• What is meant by the reference to the 'later of the day' should be made clear in the Notes to Landlords.

Respondents identified several issues which they felt the Notices or Notes do not but should cover. These included:

• The legal standing of a letting or management agent in respect to the landlord.
• That if making a claim, the tenant should be specific about the information they believe has not been supplied or why a Payment Order would be considered valid.

Specific additions suggested are set out below.

Additions to the Notice

• Information about who can act as a tenant's agent.
• An instrument for the agent to cite the landlord if all or some of the prescribed information is not provided. There should be an equivalent instrument if the landlord is cited for information the agent may have.

Additions to the Notes for the Tenant

• An explanation about the three situations for which the tenants can use the form: failure under section 10; failure under section 11; and payment order under section 16. The Notes could provide information on what each of these options means and when they apply.
• An explanation within Notes 8-10 for tenant as to what to do if the property is in a rent pressure zone ( RPZ) and appears to be above the capped level; and how to find out if it is in an RPZ.

Landlord's notification to a tenant of a rent increase under Section 22. (Questions 5-8)

A summary of responses to Questions 5-8 is set out in Table 3 below. A full breakdown of responses to each question by respondent type may be found in Annex 2.

Table 3: Do you think the proposed 'Landlord's notification to a tenant of a rent increase under Section 22:

		Yes	No	Unsure	Not answered
Question 5:	Is fit for purpose?	38	21	3	8
Question 6:	Is easily understood?	28	30	3	9
Question 7:	Should have additional content?	26	33	1	10
Question 8:	Should have anything removed?	20	39	2	9

The majority of respondents who answered these questions thought this notice was fit for purpose, although a small majority thought it was not easily understood. A small majority thought that no additional content was required and the majority thought that nothing should be removed.

Comments on the 'Landlord's notification to a tenant of a rent increase under Section 22'

Around 46 respondents made a further comment at one or more of Questions 5-8.

Issues raised

Issues raised about the Notice in general and/or Part 1 in particular included:

• It should be made clear that a tenant can only make a referral to a Rent Officer where the property is located outwith an RPZ.
• The process does not allow for tenant improvements or rent free or reduced rent periods to be taken into account.
• It should also be made clear that the Scottish Ministers can only set a cap on the maximum amount rent can be increased if it is included within a RPZ.

As noted above, there were concerns about the section on RPZs being particularly difficult to understand. There was also a question as to why this information would be included as standard, irrespective of whether the property is in an RPZ. This was seen as potentially confusing.

Further comments on the RPZ-related section included that:

• Within the equation given, 'Y' refers to a number determined by a Rent Officer to reflect the fact that improvements have been made to the property and that a higher rent can be charged to reflect the higher standard of the property. This is consistent with the wording in the introduction to the Notice. Overall, however, much of the subsequent wording gives the impression that the rent increase is a way for the landlord to offload improvement costs, rather than reflecting a higher standard that warrants an increase.
• The sum is set by a Rent Officer, but there appears to be no reference to the timescales for getting this information from a Rent Officer, and how and when a landlord can apply to the Rent Officer.
• It may be appropriate for local authorities who instigate an RPZ to send this notice out proactively to all landlords when they notify them of the creation of the RPZ.

Finally, a number of respondents raised concerns about the potential complications arising from the two components (rent increases and RPZs) being included within the same Notice.

Points for clarification

Areas about which clarification was sought included:

• What constitutes a reasonable or unreasonable rent increase.
• Whether it may now be appropriate to use the CPIH (i.e. the measure of consumer price inflation including a measure of owner occupiers' housing costs) rather than the Consumer Prices Index ( CPI).
• What falls within the scope of property improvements and the process a landlord must undertake if providing Rent Officers with information about improvements.
• Whether, if Part 3 is not returned, this implies acceptance of the increase.
• What rent should be paid if the Rent Officer is unable to review the case within the 3-month period.

Suggested changes

A number of the changes suggested focused on the 'separation' of the rent-increase and RPZ components. They included:

• There should be two separate Notices or two separate parts to the Notice, with separate guidance for each.
• The standard notice should include a statement showing that the landlord has indicated that the property is not located within an RPZ.
• Tenants who are living within an RPZ should receive a different version of the notice including full information and the explanation of the RPZ calculation.
• Once rent increases have been set for an area, the notification could just set out the maximum level of rent increase.

Suggested changes to the Notices or Notes as drafted included:

• It should be made clear that the Notice could be served at the 9-month stage and the wording needs to be changed to allow for consecutive annual increases.
• In Note 1 to the Tenant and in the Notes for Landlords, the dates provided should be the earliest date the rent increase can be applied, not the earliest date the rent increase must be paid.

Suggested additions

A frequently suggested addition to the Notice was to include the last date the rent was increased. This was seen as helping ensure compliance with rent only being increased once within a 12-month period. It was also suggested that the current and proposed new rent should be required.

Many of the other suggestions focused on ensuring that tenants and landlords have key information they may need. Suggestions included:

• There should be more information about how to challenge a rent increase under the RPZ rules.
• It should be highlighted that a Rent Officer can raise as well as lower the rent.
• With reference to the RPZ calculation, adding a link to an online 'how to calculate what your landlord can charge' calculator.

Other suggested additions included:

• Requiring the landlord to specify if the rent increase includes an increase in service charges or other charges.
• Providing an exemplar of each Part (completed using example names) available for tenants and landlords as an annex to the tenancy, or within the tenant information pack ( TIP).

Additions to the Notes to the Tenant

Suggested additions to the Notes to the Tenants included:

• At Note 1, adding an explanation that a copy of the evidence along with the completed Part 3 of the form may also need to be sent to any letting agent.
• Advising on what to do if their landlord tries to increase the rent more frequently than once in 12 months.
• Advising that tenants in receipt of state benefits need to notify the relevant authority of the increase.

Suggestions for content to be removed

The small number of suggestions made for content to be removed included:

• The illustration of the RPZ formula / the calculation method should be removed from Part 2.
• The extended information about RPZs should only be included if directly relevant.

Tenant's application form to a rent officer for adjudication on a proposed rent increase. (Questions 9-12)

A summary of responses to Questions 9-12 is set out in Table 4 below. A full breakdown of responses to each question by respondent type may be found in Annex 2.

Table 4: Do you think the proposed 'Tenant's application form to a rent officer for adjudication on a proposed rent increase':

		Yes	No	Unsure	Not answered
Question 9:	Is fit for purpose?	39	16	4	11
Question 10:	Is easily understood?	44	11	3	12
Question 11:	Should have additional content?	30	29	2	9
Question 12:	Should have anything removed?	10	46	3	11

The majority of respondents who answered these questions thought this notice was fit for purpose and easily understood. Respondents were relatively evenly divided as to whether additional content was required and the majority thought that nothing should be removed.

Comments on the 'Tenant's application form to a rent officer for adjudication on a proposed rent increase'

There were 39 respondents who made a further comment at one or more of Questions 9-12.

Issues raised

A concern raised by a small number of respondents was that a fee-free tribunal service will be overloaded by an increased number of referrals by tenants who have nothing to lose by appealing a rent increase and who can benefit from delaying decisions being made. These respondents suggested that the Tribunal's service should be fully cost recoverable and that the fee could be refunded depending on the outcome of the case.

A small number of the issues raised focused on practical aspects and included that inspections by Rent Officers taking place between 9.00 am and 3.30 pm is restrictive, especially for people in work. Otherwise, many of the comments referred to what is or is not being asked at specific questions in the Form. They included that:

• At Question 4, provision has to be in place for improvements that have been carried out by the landlord themselves, and therefore may not come with an invoice.
• At Question 6, it should be made clear that where the tenant has undertaken improvements to the property without the landlord's prior written consent the tenant will not gain any benefit.
• At Question 10, tenant may not understand what is being required when asked to cite reasons for making an appeal.

Respondents also highlighted issues not covered by a current question, including the state of repair that the property was in when the tenant moved in or any disrepair that has been caused by a failure on the landlord's part to make repairs within a reasonable period of time.

Points for clarification

Points about which respondents sought clarification included the direction of the questions on tenant improvements and repairs and whether they are focused on whether the rent is artificially low to account for improvements the tenant was making to address any repairing standards issues.

Suggested changes

Suggested changes to specific questions included:

• Questions 3 and 4 should allow for information to be provided on a room-by-room basis.
• At Questions 5 and 9, where a property is furnished a copy of the inventory document should simply be requested.
• At Question 7, it should be made clear disrepair caused by the landlord which is covered by the repairing standard can be dealt with under a separate procedure, and this should be linked to the MTA.

Suggested additions

Suggested additions to the Form included:

• Adding the requirement for a tenant to explain what steps they have taken to resolve this issue with the landlord/agent before submitting the application.
• Explaining what is meant by 'tenant's agent' and explaining who can act as a tenant's agent.
• Adding a reference to factoring fees.
• Including an explanation of whether facilities pertain to common parts and make reference to car parking and private water supplies and drainage.
• Adding a question about the quality of the furniture when the tenant moved in.

Suggestions for content to be removed

The small number of suggestions made for content to be removed included that if the property is shared with the landlord the rules do not apply and therefore the form should either state this clearly or this section should be removed.

Landlord's application form to a rent officer to apply for property improvement costs in a rent pressure zone. (Questions 13-16)

A summary of responses to Questions 13-16 is set out in Table 5 below. A full breakdown of responses to each question by respondent type may be found in Annex 2.

Table 5: Do you think the proposed 'Landlord's application form to a rent officer to apply for property improvement costs in a rent pressure zone':

		Yes	No	Unsure	Not answered
Question 13:	Is fit for purpose?	44	12	2	12
Question 14:	Is easily understood?	46	7	4	13
Question 15:	Should have additional content?	23	32	3	12
Question 16:	Should have anything removed?	5	48	5	12

The majority of respondents who answered these questions thought this Form was fit for purpose and easily understood. A majority also thought no additional content was required and that nothing should be removed.

Comments on the 'Landlord's application form to a rent officer to apply for property improvement costs in a rent pressure zone'

Around 34 respondents made a further comment at one or more of Questions 13-16. Compared to other of the Notices or Forms, the comments tended to be relatively brief.

Issues raised

Amongst the issues raised was the suggestion that this Form appears to be an extension of the 'Landlord's notification to a tenant of a rent increase under section 22 of the Private Housing (Tenancies)(Scotland) Act 2016'. The small number of respondents making this point suggested this Form should be included as part of that Notice (covered at Questions 5 to 8 above). Other respondents queried whether all landlords within a given area will be aware that an RPZ designation has been made and by extension that this Form should be used.

Other comments included:

• The process does not allow for reduced rent to recognise tenant improvements or rent free or other reduced rent periods to be taken into account.
• Question 6 implies the absence of an inventory. This should have been provided at the start of the tenancy and should therefore be available to attach to the Form.

Points for clarification

Points about which respondents sought clarification included:

• Whether a rent increase due to improvement can apply without referral to Rent Service Scotland.
• At Part 8, whether the new proposed rent amount should include the additional increase above the regular limit on rent increases due to improvements, or if the Rent Officer will determine this additional amount.

Suggested changes

Suggested changes to the current draft included that Part 8 of the form relating to the RPZ cap is difficult to interpret and should be re-drafted to state that this is seeking a landlord's proposed increase only.

Suggested additions

• At Question 3e, the provision of parking spaces should perhaps be included.

Suggestions for content to be removed

The small number of suggestions made for content to be removed included:

• Any requirement to supply receipts or invoices for work carried out.

Notice to leave from a landlord to a sub-tenant (Questions 17-20)

A summary of responses to Questions 17-20 is set out in Table 6 below. A full breakdown of responses to each question by respondent type may be found in Annex 2.

Table 6: Do you think the proposed 'Notice to leave from a landlord to a sub-tenant':-

		Yes	No	Unsure	Not answered
Question 17:	Is fit for purpose?	41	13	5	11
Question 18:	Is easily understood?	31	18	8	13
Question 19:	Should have additional content?	15	38	4	13
Question 20:	Should have anything removed?	12	42	3	13

The majority of respondents who answered these questions thought this Notice was fit for purpose and easily understood. A majority also thought no additional content was required and that nothing should be removed.

Comments on the 'Notice to leave from a landlord to a sub-tenant'

Around 33 respondents made further comments at one or more of Questions 17-20.

Issues raised

Issues raised included:

• Whether there are flaws in relation to a landlord's right to obtain possession from a lawful sub-tenant which mean that, on completion of a successful action against the tenant for non-payment of rent, a lease with the sub-tenant will automatically be deemed to have been granted.
• Whether the Notice is required at all, as it is unlikely a landlord would allow a property to be sub-let. A slightly different perspective was that it is unlikely to be used but could be useful if a problem did arise.
• The statement that both the Notice to Leave by the Head Landlord and a separate Notice to Leave by the sub-letting landlord are to be attached and served at the same time implies that the Notices are defective if not served together.

Points for clarification

Points about which respondents sought clarification included:

• Whether the term Head Landlord is one that is recognised by the industry or tenants.
• Paragraph 3 is confusing as to whether the sub-tenancy Notice to Leave can be treated as a Notice to Leave where a sub-tenant becomes a tenant of the let property.

Suggested changes

• The title should be changed to Landlord's Notification for Sub-tenant to Leave.
• At Part 2, the eviction grounds might be set out so that the landlord can select those that apply and so that it is easy for the sub-tenant to see the full list of grounds, with the notice period set out beside each.
• Part 2 implies that the landlord is applying for an eviction order before the sub-tenant has refused to move out. This should be included as a separate form.
• Part 3, where the landlord is asked to state particulars of how the ground has arisen, should be reworded or perhaps amalgamated with Part 4 (which asks for evidence to support the use of the eviction ground).
• The sub-tenant should be entitled to see evidence of eviction grounds at the time of the Notice, in order to provide clarity on their legal position. The current wording of "should provide you with evidence" does not make clear this is a legal requirement. This lack of clarity is further compounded at Note 11 and through Part 5 through the reference to the Tribunal.

Suggested additions

Specific additions suggested are set out below. These have been presented according to whether they were overall suggested additions or were made with specific reference to the Notice, the Notes to the Tenant or the Notes to the Landlord.

Additions to the Notice

Suggested additions to the Notice included:

• Including a Notice to the Tenant was proposed, along with suggested wording.

Additions to the Notes for the Sub-tenant

Suggested additions to the Notes for the Sub-tenant included:

• Note 13 should make it clear that a sub-tenant can leave on receipt and expiry of the notice alone, if they wish.
• Note 15 should cover how a tenant might go about applying to the Tribunal if they suspect that their landlord did not genuinely want their property back under proper eviction grounds. This should include how the sub-tenant can provide evidence to the Tribunal.

Suggestions for content to be removed

The further suggestions for content to be removed included:

• Reference to landlords and legal aid since they are unlikely to be on a low enough income to qualify.

Notice to leave from a landlord to a tenant (Questions 21-24)

A summary of responses to Questions 21-24 is set out in Table 7 below. A full breakdown of responses to each question by respondent type may be found in Annex 2.

Table 7: Do you think the proposed 'Notice to leave from a landlord to a sub-tenant':-

		Yes	No	Unsure	Not answered
Question 21:	Is fit for purpose?	44	12	5	9
Question 22:	Is easily understood?	40	10	9	11
Question 23:	Should have additional content?	15	39	4	12
Question 24:	Should have anything removed?	8	42	8	12

The majority of respondents who answered these questions thought this Notice was fit for purpose and easily understood. A majority also thought no additional content was required and that nothing should be removed.

Comments on the 'Notice to leave from a landlord to a tenant'

Around 35 respondents made further comments at one or more of Questions 21-24.

Issues raised

It was suggested that the current wording of the Notice may seem confrontational and adversarial, especially in comparison to the current Notice to Quit. In particular, it was felt that the use of the word eviction at an early stage may alarm tenants unnecessarily and that the primary information that the tenant needs is that the landlord is requesting them to leave, the grounds for this, and the timescales the tenant has to leave the property. Other issues raised included:

• Tenants have a right to know why they are being asked to leave, and if landlords are not required to provide evidence at the time of serving the notice, the tenant will be unable to establish the validity of the eviction.
• It would appear that a further document that would be required to apply to the First-tier Tribunal to raise eviction proceedings does not appear to have been provided.

Points for clarification

Points about which respondents sought clarification included:

• Whether grounds 1-9 and 16-18 must be met when issuing a Notice for under six months.
• If a landlord can use this Notice if the tenant has not satisfied the ground for eviction i.e. rent arrears, at the point of issuing the notice.
• Why there is no similar notice for the tenant to serve notice to the landlord?

Suggested changes

• Parts 2 and 3 should be swapped round.
• In relation to Part 5, Note 6 to the tenant it states that, if the Tribunal grants an eviction order, the tenant "will usually" get 14 days' notice. This is too open-ended and a mandatory notice period should be set.
• Note 3 suggests contacting the housing options team at your local authority. However, not all local authorities may have a Housing Options Team and this should be amended accordingly.
• In Note 7, it would be useful to clarify how a tenant would go about applying to the Tribunal in the case of a suspected wrongful termination.

Suggested additions

Specific additions suggested are set out below. In this case, the comments made were of most relevance to the Notes to Tenants. They included:

• It may be helpful to make clear that the tenant is free to move out before the notice expires, and does not have to wait for the landlord to seek an order.
• Information should be provided on the process of eviction after the Tribunal has granted the landlord's application.

Suggestions for content to be removed

The small number of suggestions made for content to be removed included:

• Advising tenants to get advice from their landlord would not always result in the best outcome for tenants - therefore this option should be removed.