Qualitative research to explore the implications for private rented sector tenants and landlords of longer term and moresecure tenancy

5 VIEWS ON SPECIFIC ASPECTS OF THE TENANCY REGIME

5.1 This chapter explores security of tenure further, with a particular focus on landlords' and tenants' views on making changes to length of tenancy arrangements. The chapter also covers views on notice periods and grounds for repossession, with a focus on both the current arrangements and any appetite for change.

Possible changes to tenancy length

5.2 As discussed in Chapter 4, the length of a SAT (usually taken to be 6 months, followed either by another 6 month period or by a rolling month-by-month period) was identified as both a strength and weakness of the current tenancy regime.

5.3 The landlords' position was clear and unambiguous; the landlords who took part in this research did not wish to see the removal of the fixed initial tenancy period (currently at a minimum of 6 months) after which they would be able to regain possession of the property without needing to meet specific grounds for repossession. A very substantial majority was also opposed to removing the option for a month-by-month rolling tenancy after the initial tenancy period has expired. As some landlords pointed out there are good reasons why they could but do not use the current Assured Tenancy and they would have very considerable concerns about being required so to do. As discussed above, these concerns centred on the difficulties of regaining possession of their property if they needed to do so.

5.4 Although there was no appetite amongst landlords for removing fixed period tenancies, a small number saw a case for moving away from month-by-month rolling tenancies. Those who took this view suggested that if a tenancy had been working well for both parties for a period of 6 months or more it would not seem unreasonable to offer a tenant the additional security associated with having another 6 month tenancy. Similarly, a small number of landlords took the view that there might be a case for increasing the minimum 6 month initial period to 12 months, although again this was very much a minority view.

5.5 Many landlords also wished to make it very clear that any changes to the tenancy length arrangements could affect their business decisions - either in terms of their ability or willingness to invest in the sector, or in terms of the types of tenant to whom they would be prepared to rent. With regard to investment, some landlords were clear that any arrangements which jeopardised the availability of buy-to-let financing, or which made the terms of any financing considerably less advantageous, could threaten their ability to remain within the sector. Equally, some suggested they might make a risk-related business decision that they could invest their money more wisely or more safely elsewhere.

5.6 A further suggestion was that landlords would inevitably seek to minimise their exposure to financial risk, and particularly the risks associated with unpaid rent or damage to their property, by not renting to certain types of tenants. The types of tenants that these landlords suggested they would avoid included those in receipt of LHA or without good tenancy references, although some of those raising this issue already chose not to rent to such tenants.

5.7 Finally, many landlord participants felt that any proposal to bring in changes to the tenancy regime, and to length of tenancy in particular, was symptomatic of the Scottish Government's approach to the sector over recent years. In summary, the view was that more and more requirements have been imposed on landlords and that, while 'good' landlords bear the considerable burden of complying with any changes, no meaningful efforts are made to tackle those who do not. Many of the landlords who participated in this research wished to send a clear message that improved standards across the PRS will not be achieved by making yet further change, but by enforcing the changes that have already been made. Their view was typified by one landlord as follows:

Every new thing they bring in, I do it… now that takes time and usually money. And then I have to sit and watch other people doing none of it… and nobody does a ****** thing about it. Enough, just enough.
(Experienced, full-time landlord renting in rural area)

5.8 While landlords tended to hold very similar views on possible changes to tenancy length, tenants' views were more varied. In particular, it was very apparent that views on this issue were shaped by the tenant's personal circumstances and plans for the future.

5.9 Most straightforwardly, those tenants who expected to use the PRS as a shorter-term, transitional housing option had very few concerns regarding security of tenure. These tenants tended to the view that an initial 6 month tenancy offered as much security as they were looking for. A small number of younger, working age tenants suggested that 6 months is actually quite a long time to be tied in and that they felt more comfortable in the rolling month-by-month phase of their tenancies.

5.10 As discussed previously (paras. 4.5-4.9), shorter-term tenants tended to place considerable store on flexibility. Whilst some took the view that greater security (in the form of a longer or indefinite tenancy) would have its benefits - and could understand that it might be important to other longer-term tenants - they were very clear this would only be preferable for them if they were not constrained any further as a result. In effect, if asked to choose between having greater security or retaining flexibility, they would chose flexibility.

5.11 However, whilst greater 'formal' security was not a particular priority for shorter-term tenants, this appeared to correlate with a perception that they were actually more secure in their accommodation than the tenancy conditions alone would suggest. There was a common understanding that a landlord would prefer to hold on to a tenant who pays the rent and does not damage their property and such tenants simply saw no logical reason why they would be asked to leave. Many holding this view also cited conversations with landlords or agents which had confirmed this to be the case. A typical view was:

I honestly can't see why [landlord's name] would ask us to leave and anyway he said we'd be welcome to stay on as long as we wanted. I'd be annoyed if he went back on that, but we'd cope.
(Higher income working tenant with children renting in a small town)

5.12 Along with their understanding of their value as a 'good' tenant, this expectation of being able to deal with the repercussions of being asked to move on appeared key to the relatively relaxed view many shorter-term, transitional tenants had on security of tenure.

5.13 These tenants also often held the view that the property belonged to the landlord, that ultimately it was their right to do with it as they wished, and that they had understood the nature of the business relationship they were entering into when they took on the tenancy.

5.14 Those short-term tenants that considered length of tenancy from the landlords' perspective tended to a view that it would not be fair to expect a landlord to offer greater security without also expecting a tenant to make a longer-term commitment. Again, should this be the choice, they favoured flexibility, but as one tenant put it:

If you're asking me to choose, I think the most important thing is that I can move on easily…but if you're saying I can have both….then why not?
(Higher income working tenant in urban area)

5.15 Tenants who expected to be living in the PRS in the longer-term generally had a different perspective, although the picture was somewhat complex. For example, many longer-term tenants were equally aware of the value to a landlord of a 'good tenant'. This was particularly the case amongst those whose families had lived in the PRS for a considerable time and in some cases for generations. These tenants also tended to be living in rural areas. A small number of these tenants had previous experience of the Assured Tenancy regime and, while one tenant was of a clear view that an Assured Tenancy had its advantages, most were not aware that the introduction of SATs had resulted in significant changes to the way the sector works.

5.16 For longer-term tenants, issues involving property condition tended to be the over-riding concern (see paras 4.18-4.19). Typical property-related issues described by members of this group can be summarised as follows:

• The condition of the property is poor and repairs are either not done or are done slowly and to a poor standard.
• The landlord's primary concern is receiving the rent on the property and as long as that rental income is coming in (be it through LHA or otherwise), they are unlikely to actively engage with either the property or the tenant. This includes requiring the tenant to leave.
• The tenant feels powerless to get repairs done or improvements made and they have a choice between staying on in poor conditions or moving on. However, any alternative accommodation they are able to access or afford is unlikely to be any better.
• They may already have made attempts to involve statutory services or otherwise look for help to address the problem, but have found these routes to be ineffectual. This may include contact with agencies which have offered advice on their rights and how to pursue these.
• They do not feel able 'take on' their landlord themselves and would expect this to be a lengthy and both emotionally and financially draining process. They have no appetite for such a fight - life is hard enough.

5.17 Tenants experiencing such property-related concerns were unlikely to believe that greater security of tenure would make them feel any more able or inclined to pursue their right to have the property repaired. In most cases, tenants are disinclined to pursue the right to repairs not because they are concerned about losing their home, but because they cannot face going through formal channels and have little expectation it will prove worth the effort. Those who are able prefer simply to move to other accommodation, while those who are not able to move are clear that it should not be the responsibility of individual tenants to try and tackle poor condition issues. It is also worth noting that a small number of the shorter-term, transitional tenants expressed a similar view, but they had the advantage of being able to move on relatively easily.

5.18 However, while many longer-term tenants were not convinced that having a longer or indefinite tenancy would empower them to tackle property condition, many did still favour changes to the tenancy regime. Those with a strong connection to the social rented sector were most likely to support a change and tended to favour the adoption of an approach similar to that of the Scottish Secure Tenancy used by the social rented sector. Those favouring such an approach sometimes referred to 'lifetime' tenancies, with one tenant explaining his position as follows:

It should be like for the Council….no-one should be able to take your home from you, not if you pay the rent and that.... I just want to know that when I'm gone she's [the wife] got a roof over her head.
(Older tenant, long history of living in the social rented sector)

5.19 As the above quote suggests, a number of the tenants who were looking for greater security had other significant issues they were dealing with, including ill health. Some also had very particular housing requirements, for example for a wheelchair-accessible property and, having found suitable accommodation, were extremely concerned that they might then loose it. Whilst these tenants were not suggesting they should be entitled to stay in a PRS property under any circumstances (see the discussion below on grounds for repossession), they were of the view that a landlord should not be able to ask them to leave for no legitimate reason.

5.20 However, there was a strong correlation between tenants taking this view and those with a preference for living in the social rented sector. Many of the tenants who were looking for more security would have actively preferred to be living in the social rented sector; they tended to report having active housing applications with local social housing providers and generally suggested they would be likely to accept an offer of suitable social housing. However, they very often thought that such an offer was unlikely to come at all, or that if they were made an offer it would be in an unsuitable area^[5].

5.21 While tenants in these circumstances did tend to support the idea of greater security, some had chosen to give up such security (in other words a social rented sector tenancy) in order to access a more suitable property or in order to leave a neighbourhood - or more precisely to get their children away from a neighbourhood - which gave them concerns. Ultimately, these tenants had placed having a property that met their basic requirements or was in a suitable location above security of tenure, although they did not see this as a choice but a necessity:

I had to get my girls away from there… Mum thought I was mad to give up my [housing association] house… but I'd do the same again. Maybe we will have to move one day, but at least my kids are safe.
(Lower income working tenant with children living in a small town)

5.22 In the same way that some tenants favoured safety and location over security, some were making an even more stark choice in favour of having anywhere to live over security. This group of tenants were currently living at the bottom end of the PRS, had very often had contact with statutory homeless services at some point in the past, and often had made a clear and determined choice to never do so again. This group of tenants was concerned that any changes which required landlords to offer greater security could backfire on tenants such as themselves and that - echoing the suggestion made by a small number of landlords and set out at para 5.6 above - landlords might be increasingly disinclined to offer them even sub-standard accommodation. As one young mother explained:

Can't honestly see it'll change anything…well no it might…it might mean she won't give her flats to the likes of me….you know, unless someone does something to make them do what they're supposed to do it might just make it worse. Oh, and by the way, tell them that we [gesturing to other participants] can't make her do what she's supposed to... they bring in all this stuff then the Council needs to get out and make sure she's doing it properly.
(Tenant with family, in receipt of LHA, renting in an urban area)

Notice periods

5.23 In general, both landlords and tenants had a good understanding of the notice periods in place should either party wish to bring a SAT to an end. The one area in which there did appear to be some confusion was in relation to the requirement to give notice in the lead-up to the end of the first fixed period if either party wished to bring the tenancy to an end at that point. A small number of tenants had experienced a situation when they had not realised this was the case and had effectively lost their deposit as a result^[6].

5.24 Overall, most landlord and tenant participants felt the current notice arrangements work reasonably well. However some participants, including a number of landlords did consider them to be too short. Others, generally including those tenants who placed a particularly high value on flexibility, did not.

5.25 A range of possible notice period alternatives were explored with research participants, including landlords or both landlords and tenants having to give a longer period of notice, or that the length of the notice period a landlord would give a tenant might be linked to the length of time they had been in the tenancy.

5.26 There were a range of views on any possible changes, with the clearest divide between those who felt there should be parity, with landlord and tenant notice periods the same, and those who did not. Those who suggested there should be parity (a group which included most landlords but also some tenants), tended to simply consider this to be fair. Some landlords pointed to the fact that they are rarely if ever asked for longer notice periods and had serious doubts that they would be appealing to tenants if reciprocal.

5.27 Those who took the alternate view all thought that notice periods should be weighted in favour of tenants, with reasons given including the following:

• It is fundamentally more important that a tenant does not find themselves without a home than a landlord does not find themselves without a tenant.
• It is likely to be easier for a landlord to find a tenant than for a tenant to find a new home.
• If a tenant does find possible alternative accommodation, they will need to move quickly - no other landlord will 'hold' a property while a tenant serves out a longer notice period. This is particularly the case in relation to a move into social rented housing, when any offer will only be open for a short period and any tenant in receipt of LHA will have limited scope for covering double rent payments.
• If a tenant is choosing to make a move, they are also likely to need to move quickly - for example, it may be work-related and a prospective employer is likely to want someone to start as soon as possible.
• Equally, any tenant looking into owner occupation may need to move quickly and is unlikely to be in a position to cover both rent and mortgage payments whilst serving out a longer notice period.
• This approach could actually feed into creating longer-term tenancies and, by extension, be in the best interests of both tenants and landlords. If tenants had a longer period to find suitable accommodation they might be less likely to take 'what is on offer at the time' but then look at move at the end of the initial fixed period.

5.28 Overall, therefore, many tenants would welcome being given a longer notice period, but only a very small number considered this would be worth having at the expense of having to give longer notice in return.

5.29 The idea of linking notice periods to the length of time the tenant had been living in the property also received mixed reviews. From the landlord perspective, a small number of participants did see its merits, although some had concerns about how practical it would be. For example, it was suggested that if a longer-term tenant is being asked to move it may very well be that major repairs or improvements are required to the property and that allowing someone to carry on living in the building for a period of many months might not be in their best interests or indeed be safe.

5.30 Some landlords also suggested that all good landlords would already take this approach, with a small number of rurally-based landlords suggesting that they simply would not require a tenant of many years standing to move on at short notice without very good reason and without making every effort to find them alternative accommodation.

5.31 Again, the substantial majority of tenants only considered this to be a desirable option if the longer notice periods were not reciprocal.

Grounds for Repossession

5.32 As noted earlier within this report (para. 4.15), one of the main concerns landlords raised about the current SAT regime related to regaining possession of their property if there were significant problems with a tenancy. These concerns focused very much on the processes to be gone through and particularly that it is likely to be both lengthy and costly.

5.33 In terms of the grounds themselves, both landlords and tenants tended to consider them to be broadly fair. In particular, tenants had a very clear view that in taking on a tenancy someone was making certain basic commitments, which included paying the rent and not damaging the property. All tenants were of a view that a landlord should be able to regain possession of their property if the tenant broke these rules.

5.34 However, there were some areas which were seen as less clear cut, with some tenants raising one or more of the following issues:

• A tenant should not be penalised if delays or mistakes in processing of LHA results in them falling into rent arrears. One suggestion was that the local authority should be required to make contact with the landlord to explain the circumstances and reach an agreement.
• It may be appropriate, or at least would certainly be desirable, for landlords to be required to make allowances if a tenant has experienced a dramatic change in their financial circumstances, for example through the loss of employment. Again, there was a suggestion that the local authority may have a role to play, possibly by covering the rent until any LHA claims are processed.
• Some tenants did not agree that a landlord should be able to repossess a property if they either wished to sell the property or to live in it themselves. Others suggested that it should be possible, but that clear evidence of the need to sell or move in should have to be presented to the Sheriff Court. Those holding this view recognised that a landlord could, for example, be suffering financial difficulties themselves. However, they were of the opinion that it should only be possible for a landlord to sell or move into a property that had an existing tenant if this could be demonstrated to be absolutely necessary.

5.35 Overall, however, most tenants took the view that the property belongs to the landlord and that ultimately, and assuming all legal processes are followed, they should be entitled to take possession if they want or need to.

5.36 Landlords held a similar view and generally felt the existing grounds to be fair and balanced. However, some landlords suggested that revisions should be made to the rent arrears-related discretionary grounds^[7]. In particular, it was suggested that some tenants (and their advisors) have worked out how to stay just on the right side of these grounds, but that the landlord can still be suffering very considerable financial losses. Although some suggested that the grounds themselves should be modified, it was also clear that some of the concerns centred on what the landlords considered to be inconsistent or incorrect application by the Sheriff.