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INFRASTRUCTURE AND CAPITAL INVESTMENT COMMITTEE

AGENDA

21st Meeting, 2015 (Session 4)

Wednesday 4 November 2015

The Committee will meet at 9.15 am in the Mary Fairfax Somerville Room (CR2). 1. Private Housing (Tenancies) (Scotland) Bill: The Committee will take

evidence on the Bill at Stage 1 from—

Barry Stalker, Private Housing (Tenancies) (Scotland) Bill Team Leader,and Kirsten Simonnet-Lefevre, Solicitor, Scottish Government.

2. Private Housing (Tenancies) (Scotland) Bill: The Committee will takeevidence on the Bill at Stage 1, in a round-table discussion, from—

Robert Aldridge, Chief Executive, Homeless Action Scotland; Rosemary Brotchie, Policy Manager, Shelter Scotland; Liz Ely, Chair, Living Rent Campaign; Gary Paterson, Vice President Communities, National Union of Students(NUS) Scotland; Beth Reid, Policy Manager (Scotland), Crisis; Fraser Sutherland, Policy Officer, Citizens Advice Scotland.

Steve Farrell

Clerk to the Infrastructure and Capital Investment CommitteeRoom T3.40

The Scottish ParliamentEdinburgh

Tel: 0131 348 5211Email: steve.farrell@scottish.parliament.uk

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The papers for this meeting are as follows— Agenda item 1 and 2

Cover Note ICI/S4/15/21/1

PRIVATE PAPER ICI/S4/15/21/2 (P)

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Infrastructure and Capital Investment Committee

21st Meeting, 2015 (Session 4), Wednesday 4 November 2015

Private Housing (Tenancies) (Scotland) Bill Introduction

1. The Private Housing (Tenancies) (Scotland) Bill (“the Bill”) was introduced by the Scottish Government on 7 October 2015.

2. The aim of the Bill is to replace the current system of private tenancies in Scotland. This would see the existing short assured tenancy and assured tenancy replaced with a single new tenancy, known as the private residential tenancy. The Scottish Government believes that this new tenancy model will provide appropriate safeguards for landlords, lenders and investors.

3. The Bill also aims to provide tenants with protection against excessive rent increases and provide rent predictability, including the ability for Scottish Ministers to introduce caps on rent increases for sitting tenants in Rent Pressure Zone.

4. The Bill and supporting documents are accessible at the following link:

http://www.scottish.parliament.uk/parliamentarybusiness/Bills/92310.aspx

5. A SPICe briefing on the Bill is available on the Committee’s webpage here:

http://www.scottish.parliament.uk/parliamentarybusiness/93495.aspx

6. A SPICe briefing on the private housing rental sector is also available on the Committee’s webpage here:

http://www.scottish.parliament.uk/parliamentarybusiness/93159.aspx

Infrastructure and Capital Investment Committee consideration

7. The Bill was referred by the Parliamentary Bureau to the Infrastructure and Capital Investment Committee as lead Committee at Stage 1 of the scrutiny process. The Committee considered and agreed its approach to scrutiny of the Bill on 7 October 2015.

8. The ICI Committee’s call for views opened on 9 October 2015, and remains open until 19 November 2015. Those wishing to respond to the call for views are welcome to fill out a smart survey on the bill, or provide a written submission. Full details can be found at the following link:

http://www.scottish.parliament.uk/parliamentarybusiness/CurrentCommittees/92965.aspx

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Written submissions 9. Written submissions are published on the Committee’s webpage and links to all those received so far are attached at Annexe A.

Next steps

Oral evidence 10. The Committee will take oral evidence from the Bill Team, followed by organisations largely representing the interests of tenants on 4 November 2015. Hard copies of submissions received from those witnesses attending are attached at Annexe B.

11. The Committee intends to take further evidence from stakeholders on 11 and 18 November and from the Minister for Housing and Regeneration on 2 December 2015. The Committee will then produce a report containing its views on the general principles of the Bill.

12. The Parliament agreed on 28 October 2015 that the deadline for consideration of the Bill at Stage 1 is 22 January 2016.

Jason Nairn Assistant Clerk November 2015

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ANNEXE A

ALL WRITTEN SUBMISSIONS RECEIVED TO DATE ON THE PRIVATE HOUSING (TENANCIES) (SCOTLAND) BILL

(001) Clyde Property (002) Rosie Seaward (003) Electrical Safety First (004) Kenneth W Buchanan (005) Citizens Advice Scotland (006) Crisis (007) Homeless Action Scotland (008) Shelter Scotland (009) NUS Scotland (010) East Ayrshire Council (011) The Association of Residential Letting Agents (ARLA) (012) Living Rent Campaign

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ANNEXE B

WRITTEN SUBMISISONS FROM THOSE GIVING EVIDENCE ON 4 NOVEMBER 2015

Written Submission from Citizens Advice Scotland

Introduction 1. Citizens Advice Scotland (CAS) welcome the introduction of this bill to the Scottish Parliament and it intention to implement the recommendations of the Private Tenancies Review Group of which CAS was an active member. We support the general intentions of the bill to strengthen the security of tenure for tenants who live in Private Rented Housing by introducing a new tenancy type to replace those previously used in the sector. We also support making tenancies easier to understand and the introduction of a model tenancy agreement which we believe will help small landlords understand their obligations and rights. No Fault Ground Evictions (section 35) 2. We believe the steps taken within the bill to remove the ability to evict a tenant on the “no-fault” ground basis is a very welcome step. We believe this will substantially improve the security for tenants and allow the private rented sector to be able to provide not just accommodation but homes for individuals and families. We have seen from our evidence how the no-fault ground has been used by landlords in the past in unfair circumstances. These have included ending a lease due to a request for improvements or repairs made to a property. 3. Citizens Advice Bureaux across Scotland logged 1,290 new issues with security of tenure for tenants living in the private rented sector suggesting there are a significant number of tenants who feel unable to either live in their home securely or feel unable to assert their rights. Case studies received from CAB over the last year further support that view.

A West of Scotland CAB reports of a client who lives in a rural private rent and has had consistent problems with getting his property repaired. He states that after reporting many issues to the landlord, including the boiler breaking, he was told by the landlord he could leave if he wanted. The tenant wants repairs done but doesn’t want to lose the property as he needs to stay in the area for work and isn’t sure there is much else on offer.

Model Tenancy Agreement 4. CAS support the bills clauses to create a model tenancy for use by prospective and current landlords. Indeed we have seen cases where landlords have come to citizens advice bureaux looking for such a template

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only to find no such model tenancy exists. We believe a standard lease, subject to allowable discretionary clauses, will make the private rented market easier to understand for both tenants and landlords. We understand the Scottish Government intend to bring forward the detail of this model agreement in subordinate legislation. Initial Rental Period (section 51) 5. CAS support an initial term of six months which would be easy to understand for tenants. We also support the ability to negotiate a longer or shorter lease if in both tenant and landlords’ interests. This will give the landlord the certainty of the let for that initial six month period and also allows the tenants the knowledge that all lets that are being offered on the market have a six month minimum rental period. Some tenants have also expressed satisfaction that the initial period is for them a ‘trial’, where they can test if they like the property and landlord. 9. We support the intention to not limit the maximum period of a let. Limiting the maximum could end the current system whereby some tenants and landlords are able to mutually agree a length of tenancy that they know the tenant will need to stay for e.g. a worker who has been placed in a job in a certain area for a year. Notice to leave [Landlord to Tenant] (section 40) 10. CAS support the bills intention that tenants will be given twelve week notice where the tenant has lived in the property for longer than six months. This change supports the aim that the Private Rented Sector should become fit for people living in the property as their home rather than a temporary place of stay. The upheaval that can be caused for a tenant and their family if they are moved can be significant. This additional length of notice for tenants who have been resident for a longer period of time will help tenants make necessary arrangements to move. We believe this gives the tenant the required time to find alternative suitable accommodation as opposed to the current situation some tenants face

A West of Scotland CAB reports of a client and her daughter who live in a private let. She has been there for one year and thinks it is a short assured tenancy. She advised that her landlord called to say that he needed his property back next week and wanted her to leave. The client has seen another private let and would like to take this forward with the assistance of the CAB however she is concerned at how little time she is being given to move at such short notice.

11. We also support subsection 3 section 44 that where notice periods of four weeks are to be given in the first six month period; it can only be on grounds that the tenant is at fault (i.e. rent arrears).

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Notice to leave [Tenant to Landlord] (section 38 and 39) 12. CAS do not support the length of notice period required from tenants who have lived in the property longer than six months (eight weeks). 13. There are a number of concerns that we have with regard to ‘locking’ a tenant into a long notice period of 8 weeks. A tenant who is looking to move to an alternative let may miss the opportunity to take up the other let if they have to give eight weeks’ notice. We do not believe this would be in the interests of landlords looking to fill an empty property as tenants may start requesting move in dates of eight weeks in the future causing significant delay to new tenants moving in. 14. Tenants might then take the risk of giving notice earlier than they can manage so as to be effective shoppers in the marketplace and able to move in quicker than eight weeks. This potentially raises the prospect of some tenants not finding another property to move into, leaving them in a homeless limbo situation. This could be particularly acute in areas where availability of PRS properties is low such as rural communities. The alternative for the tenant is to be in a situation where they are effectively paying double rent on two properties so as to not risk having nowhere to live. 15. CAS believes that a four week standard timescale for tenants would provide them with an easy to understand fixed period that all tenants are required to give. It also would reduce the concern of tenants not being able to move properties due to long notice periods trapping them in their current let. We believe this proposal offers a sufficiently long timescale for landlords to find new tenants for the majority of rental property given that the average time to let in Scotland (Q3 2015) was 29 days. The major renting markets of Scotland’s cities also have shown high levels of property being let in a month with 78% of properties in Edinburgh, 69% in Glasgow, 40% in Dundee and 53% in Aberdeen all meeting this timescale.1 16. We are also concerned that extending the period that tenants will have to give could result in the victims of domestic abuse being unable to leave abusive partners as quick as they should be able to. While there is support for those who are victims of abuse to find alternative accommodation the victim is still liable for their share of the costs of the property they may be fleeing. Currently housing benefit rules allow for claimants to get four weeks on two properties if they don’t intend to return to the property meaning they would have to make up the shortfall to eight weeks themselves. Grounds for Repossession (Schedule 3) 17. CAS support the intention for the First-tier tribunal system to have discretionary element to its decision making on many of the grounds where a

1 CityLets Report, 2015

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tenants conduct is under investigation. We believe this will allow decisions to be taken with regard to the tenant’s personal situation and control of a situation. 18. We welcome that the Scottish Government considered our concerns during their consultation process regarding rent arrears coming about due to benefit delays and have taken steps (section 11, schedule 3) to protect tenants who have fallen into arrears through no fault of their own.

An East of Scotland CAB reports of a couple who are struggling to make the rent payments on their private let of £795 per month. They rent a large property due to the size of their family (eight children). Last month they managed to pay £600 of the rent but can’t afford more due to the implementation of the benefit cap which has reduced the family’s income. The landlord is happy with them as tenants and indeed wrote in a letter asking for the remaining rent saying she was happy with how they were looking after the property. The client is now worried about eviction action that the landlord is considering taking.

19. We also welcome the steps taken to ensure that evictions based on anti-social behaviour or criminal convictions will only apply in cases where a the said criminal activity or anti-social behaviour was linked to the property or the locality, we would not support any moves to link to any other convictions not associated with the property as removing an individual’s housing is not appropriate sanction in these cases. Wrongful-termination order (sections 47 to 49) 19. CAS welcome the bills intention to protect tenants from wrongful evictions. We support the intention to provide for the First-Tier tribunal to be allowed to make up to 3 months’ rent payable to a tenant in compensation. In addition we would like to see wrongful-termination orders being considered as part of the fit-and-proper person test by landlord registration where a landlord is consistently found to be engaged in misleading the tribunal. Rent variations (sections 19 to 28) 20. CAS support the intention to protect tenants from unfair rent hikes aimed simply at removing a tenant. We therefore support the Government’s move to ensure that rents can only be increased once a year. This will provide certainty to tenants and their families of how much the rent for that property will be in a long term. 21. CAS support that tenants should have certainty when it comes to the rent they are required to pay. Therefore introducing a notice period will allow tenants to make adjustments and plans in response to any rent increase. We believe that twelve weeks is necessary to allow the tenant the option to give notice to leave if they feel that the new rent is fair but unaffordable.

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22. CAS also support the ability for tenants to make appeals against increases they feel are unfair to a rent officer and subsequently to the tribunal for adjudication. Energy Supply 23. CAS are concerned at some reports of clients who are unable to change their energy supplier, tariff type or meter type by their landlord thus meaning they cannot find the best deal for their consumption. We would support additional measure to this bill to allow for tenants to get the best energy tariff for their needs. Fraser Sutherland Policy Officer Citizens Advice Scotland October 2015

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Written Submission from Crisis

Crisis has first-hand experience of working to help people into the private rented sector in Scotland. We work with local authorities across Scotland to improve access to the private rented sector (PRS) for vulnerable people and those on low incomes, including acting as the National Co-ordinator for Rent Deposit Guarantee Schemes2 in Scotland on behalf of the Scottish Government. The PRS has grown significantly in Scotland over the past few decades and is increasingly used to meet housing demand and provide long term homes for a growing range of households. Through our experience, we know that the PRS can be a viable housing option, even for vulnerable people, with the right support and safeguards in place. At present, however, there are serious problems: the sector is not fit for purpose and there are long-standing issues around security, affordability, conditions and access. Context and summary Research by Crisis and Shelter on the experiences of people moving out of homelessness into the private rented sector3 found that housing security is a key concern. People wanted somewhere they could settle and stay long term, enabling them to plan ahead and make positive changes in their life. Our research also showed that tenants are reluctant to report a problem or request maintenance work out of fear that they would be evicted and be unable to access another property. Therefore we strongly welcome the Bill. The provisions have the potential to significantly enhance security of tenure for tenants and put in place measures to protect tenants from excessive rent increases. We have worked constructively with Scottish Government through the process of developing the process and believe that overall they will create a major improvement in the operation of the private rented sector in Scotland. The proposals should create a simpler and fairer system for both tenants and landlords, including through a model tenancy agreement, clearer rules around notices and defined grounds for eviction. The removal of no-fault eviction and introduction of indefinite tenancies is particularly to be welcomed, will end any possibility of retaliatory evictions, and will facilitate the most secure private tenancies in the UK.

2 Rent deposit guarantee schemes are run by local authorities or third sector organisations and offer tenants help with a deposit and more general support with accessing the private rented sector. 3 Crisis, Shelter (2014) A roof over my head: the final report of the Sustain project, a longitudinal study of housing outcomes and wellbeing in private rented accommodation

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We also highlight some concerns around the Bill. These are primarily around how the new regime will operate in practice, rather than with the principles themselves. Key points include:

The importance of eviction grounds being thoroughly developed and clear so that landlords and tenants are clear how they are to be used and no loopholes are created.

Making sure that penalties for wrongful eviction are appropriate, particularly where a landlord has wilfully misled tenants and the tribunal.

That the effectiveness of Rent Pressure Zones will be dependent on the simultaneous measures to address housing affordability.

Role of First Tier Tribunal

The First Tier Tribunal has a crucial role in the operation of the new system. However, as the Tribunal has not yet been set up and its rules of operation are still be agreed, we do not yet know how it will work, how accessible it will be, what the cost (if any) will be for using the tribunal, how quickly hearings will be arranged following an application and how decisions will be enforced. We believe that the Tribunal should be free to access for tenants. It should be a principle of the operation of this legislation that an application to the First Tier Tribunal is a last resort. It must not be left to tenants to police the system and ensure compliance with the law by taking cases to tribunal. This is especially important for tenants who may not have the financial or personal resources to take a challenge further. Primary and secondary legislation and accompanying guidance should have sufficient clarity, for example around the ending of a tenancy, that tenants, landlords and their representatives are clear what evidence would provide acceptable proof of meeting the grounds, and do not need to go to tribunal to resolve issues. Provisions Parts 1-3: Private residential tenancy We welcome the development of a new model tenancy containing statutory and non-statutory clauses. A standardised tenancy with some flexibility will give increased clarity and transparency for tenants, landlords and people working to support them, such as housing advice workers. Very little detail of this is contained in the Bill and more will be required. For example we would expect there to be a requirement for a tenancy to set out a start date and the amount of rent due. Initial tenancy period

On balance we believe that the initial six month period of the tenancy where neither party can give notice, except for rent arrears or anti-social behaviour, is useful to both parties. Tenants and landlords can agree a shorter period if they wish. As set out in the policy memorandum, a landlord should be able to gain possession during that time where the tenant is at fault (rent arrears,

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antisocial behaviour etc). We do not agree that the landlord should be able to gain possession to sell their home in the initial six month period. Part 4: Rent restrictions We strongly welcome the restriction of the frequency of increasing rents (paragraph 17). A maximum of one rent increase a year with three months’ notice will increase certainty for tenants and enable them to budget more effectively. Challenging rent increases

It is important that tenants continue to be able to refer rent increases to a rent officer (paragraph 20) and, if necessary, subsequently to the First Tier Tribunal (paragraph 23). This process needs to be accessible to tenants, particularly more vulnerable tenants. In some cases it will be appropriate for someone other than an individual tenant to refer a rent-increase notice to a rent officer (paragraph 20), for example, where a caseworker or other professional is acting on behalf of a tenant. Fees for referring a rent increase to the rent officer must be set (paragraph 20 (4b)). Tenants on low incomes will be disproportionately affected by rent increases, and any fee must not have the effect of making this power less accessible to tenants who may already be struggling to meet their rent. Tenants should also have sufficient time to refer to a rent officer. The current time period seems short, at only 21 days (paragraph 20 (4d). A longer period of at least a month would ensure tenants have full opportunity to consider and respond to the rent increase, including taking advice from an external agency if appropriate. Liability for over or under paid rent (paragraph 26)

While it is important that the landlord can receive any rent due quickly following a dispute about a rent increase, this should not be done in such a way that the tenancy is put at risk. As drafted, if a dispute about a rent increase notice is decided after the date specified in a rent increase notice, and a rent officer or tribunal determines that the tenant has underpaid rent during that period, the tenant would immediately be liable to pay the full balance within 28 days (paragraph 26(5)). If the rent officer or tribunal’s decision takes several months and the tenant cannot pay the full difference between the old and new rent within 28 days, then the tenant would be at risk of eviction for rent arrears under schedule 3, paragraph 11. The rent officer and tribunal should be given discretion to allow payment over a longer period where arrears accrued during this process are substantial. Rent pressure zones (chapter 3)

Crisis welcomes the intention to limit rent increases in areas where this is particular problem.

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In our responses to the Scottish Government’s consultations on the proposals, we recommended all in-tenancy rent increases be limited through a mechanism incorporating CPI and inflation. The mechanism proposed for Rent Pressure Zones in the Bill for a therefore seems an appropriate compromise which is able to reflect local circumstances. One of the main challenges with rent controls are unintended consequences. Much more detail will be needed on how the scheme might operate in practice. The second consultation on the proposals stated that this would be a short-term measure “to make time for other measure in the mid-to-longer term, to improve the affordability of housing”4. When making an application to use these powers, local authorities will need to set out what other steps they intend to take to address housing affordability during the operation of the Zone. Without these measures, there is a significant risk that at the end of the period of the Rent Pressure Zone rents for existing tenancies will increase to match the open market rents for new tenancies (which will not be regulated during the operation of the Zone). Paragraph 31(2) allows landlords to make reasonable charges to tenants for improvements to the property during the operation of the Zone. It is not clear if the intention is that these charges would be incorporated through rent increases, and how these would need to be evidenced and, where necessary, challenged. We recognise the importance of supporting landlords to maintain improve their properties but this must be done in such a way that tenants do not feel that raising a concern about poor conditions could lead to a rent increase. Paragraph 33(2) sets out the evidence requirements for making a case for Rent Pressure Zone. These will need further definition during the passage of the Bill. Part 5: Termination Crisis strongly welcomes the increased security of tenure for tenants introduced by this part of the Bill, both through setting out specific grounds for eviction and through the specified notice periods. These will have the effect of trebling the length of notice most tenants will receive from their landlord, if the eviction is through no fault of their own. We strongly welcome the provision in paragraph 46 that a landlord cannot make an application to the Tribunal for an eviction order without giving notice to the local authority. This will enable local authorities to be proactive about preventing homelessness for tenants in this situation. 4 Scottish Government (2015) Second consultation on a new tenancy for the private sector, p34

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Wrongful termination order and associated penalty (paragraph 49)

We welcome that a tenant will be able to challenge the landlord through the tribunal where they believe they have been wrongfully evicted. The effectiveness and accessibility of this measure is critical to the success of these provisions in improving security of tenure. The penalty set out at paragraph 49(3b) is a maximum of three months’ rent to be awarded to the tenant. This is the same penalty as for failure to provide specified information (paragraph 14(2)). Based on average Scottish rents, this would equate to a maximum penalty of just under £1800 for a wrongful eviction from a two bedroom property5. Yet the impact of an eviction on a tenant is very substantial. They are likely to face moving costs, a possible rent increase in moving to a new property, gathering a new deposit before they have had their previous deposit returned, in addition to all the emotional costs of losing their home. If the tenants become homeless as a result of the eviction, the local authority may incur substantial costs dealing with the tenants’ homelessness and it seems reasonable that the landlord be liable for some or all of these costs. Under the tenancy deposit regulations a sheriff can award up to three times the deposit. Where a landlord takes a deposit of 6 weeks’ rent, this may amount to more than three months’ rent proposed here. Under the Irish system, the Private Residential Tenancies Board can award damages of up to 20,000 euros in certain circumstances6. Under current arrangements where someone has misled the Sherriff’s Court, they may be arrested for contempt of court. We therefore do not believe that the maximum penalty is sufficient, either as an award to a tenant for a wrongful eviction, or as a deterrent to prevent people from wrongfully evicting or misleading the tribunal into issuing an eviction order. Notice to Leave (paragraph 52)

It will be important for Notice to Leave to be clear and contain all the relevant information. More detail will be needed about the contents and how they are issued. For example, it should be specified that Notices to Leave should be issued to all adult residents of the household, and that in some circumstances a pre-action notification must be issued. We would also strongly support the suggestion in the previous consultation that the Notice to Leave should

5 Scottish Government (2014) Private sector rent statistics, Scotland (2010-2014) http://www.gov.scot/Resource/0046/00463199.pdf 6 Department of the Environment, Heritage and Local Government (no date) Residential Tenancies Act 2004: A quick guide http://www.environ.ie/en/Publications/DevelopmentandHousing/Housing/FileDownLoad,1996,en.pdf

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signpost to relevant advice around housing and where appropriate budgeting support. Part 6: Death of tenant We welcome the additional security this provision gives to the partner of a sole tenant on their death. The death of a partner is traumatic enough without the additional stress of losing your home as a result. We would like to see this extended to all people who have been occupying the property as their principal home prior to the main tenant’s death, such as adult children or the tenant’s sibling. Schedules Tenancies which are not private residential tenancies (Schedule 1)

Further definition is required on some of the definitions, in particular the definition of a holiday let. We are aware of cases where a holiday let provision has been used to avoid meeting statutory requirements for vulnerable tenants. Schedule 2, paragraph 3 requires tenants to inform the landlord of anyone over the age of 16 residing in the property. It will be important to make tenants aware of this clause, particularly where there are children in the household approaching this age. We would be deeply concerned if a failure to inform the landlord when a child reached their 16th birthday could result in the issuing of a Notice to Leave. Eviction grounds (Schedule 3)

As discussed, Crisis warmly welcomes that eviction grounds will now be specified in legislation, as this has the potential to give tenants much more security of tenure. How these grounds operate in practice will be critical, and so legislation, regulations and guidance need to be clear about the requirements and evidence needed to support an eviction ground at both the Tribunal and Notice to Leave stages of eviction. Loose or unclear drafting or evidence requirements could create loopholes which undermine tenants’ rights to retain their home. For example, as currently drafted:

For example under the Breach to Tenancy Agreement (ground 10) a landlord could issue a Notice To Leave following the breach of a very minor term of the tenancy, such as using blu-tac or not washing windows for a month

In particular, the ground on abandonment (ground 9) is not fit for purpose as currently drafted. It is not necessarily a requirement of a tenancy that the tenant occupies the property as their primary home, and abandonment should have some specified criteria such as a timescale.

Ground 11 on eviction due to rent arrears, it is not clear whether the mandatory ground for eviction (11(2)) requires just one, or all three, of the criteria to be met for a mandatory eviction. We welcome the

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recognition that problems with benefits should be excluded as a factor during evictions decisions.

The new eviction ground 14 means a tenant would be evicted if a landlord ceases to be registered with the local authority. We do not believe that a tenant should lose their home due to a landlord’s failure to register or meet registration requirements (currently in these circumstances a landlord would forfeit rent as tenants could obtain a rent penalty order).

The eviction grounds for subtenants (listed in paragraph 37) are worded more loosely than as set out in schedule 3

Beth Reid, Policy Manager (Scotland), Crisis About Crisis Crisis is the national charity for single homeless people. We are dedicated to ending homelessness by delivering life-changing services and campaigning for change. Our innovative education, employment, housing and well-being services address individual needs and help people to transform their lives. As well as delivering services, we are determined campaigners, working to prevent people from becoming homeless and advocating solutions informed by research and our direct experience. We work with politicians, policy makers and the Scottish and Westminster governments to bring about change and share good practice, using expertise from working with single homeless people and our understanding of the issues they face to shape policy and practice.

Crisis has ambitious plans for the future and we are committed to help more people in more places across the UK. We know we won’t end homelessness overnight or on our own but we take a lead, collaborate with others and, together, make change happen. Crisis October 2015

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Written Submission from Homeless Action Scotland

Homeless Action Scotland generally supports the provisions in the Bill which, if enacted will create a private rented sector tenancy which restores a fairer balance between the rights of landlords and tenants than that afforded by the current Short Assured Tenancy. The private rented sector plays an important role in Scotland and most landlords (or letting agents) and tenants have a good professional relationship. A private rented sector with greater security for tenants and which is affordable is likely not only to prove a more realistic housing option for families, but also lead to tenants remaining longer which will benefit landlords. The role of the legislation is to protect both parties from unreasonable behaviour. Our comments therefore relate to minimising the chances for unscrupulous landlords to misuse the legislation. Grounds for Eviction In our consultation response Homeless Action called for all grounds for eviction to be subject to a test of ‘reasonableness’ – discretionary rather than mandatory grounds for eviction. We still believe this would be the most appropriate and fair solution. The new Tribunal system is intended to be less formally legalistic and to seek the most reasonable outcome in a dispute. A tick box approach to mandatory repossession does not fit well with the Tribunal approach and is likely to result in anomalies and undermine the security of tenure which the bill seeks to promote. There are circumstances where, despite the criteria being met, it would be unreasonable to grant repossession. The criteria, as currently drafted also in our view in many cases are too loose to afford reasonable protection to tenants. In many cases terms such as ‘the landlord intends’ are used. In our view before a person can be evicted from their home there should be clear hard evidence that the action will happen. Ground 1 is loosely worded and as currently drafted gives rogue landlords an easy path to eviction. Any landlord could say that he ‘intends’ to put the accommodation up for sale within 3 months of the tenant vacating it, and then change his mind. Alternatively it could be put on the market but with a half-hearted effort at sale, offering it at a price way above market value; or he could choose not to sell it. All of these would result in a legal mandatory eviction. Although any affected tenant could seek to pursue the landlord for a wrongful termination order it is unlikely they would succeed, or would have the time and wherewithal to do so. In any case the tenant would already have lost their home, and the maximum penalty for a landlord is only 3 month’s rent which does not represent a realistic deterrent. In our view false representation by a landlord should be a criminal offence with a possibility of a jail sentence and substantial fines.

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In our initial submission we recommended that no tenant should have to leave the property until the contract of sale was concluded. There are technical means by which this can be achieved and we would recommend that this is explored further. Ground 2 is also too vague. In our view it should be subject to a test of reasonableness. Many properties are let on the basis of ‘buy to let’ mortgages i.e. on the basis that the property is a business with a sitting tenant. The terms of the mortgage are based on that premise. It is therefore unreasonable for a lender in those circumstances to insist on vacant possession. They do not do so with other businesses. However there may be circumstances in which it is important for them to have vacant possession. In our view it should be a matter for the Tribunal to determine these and to determine in each case whether vacant possession is required. Ground 3 Landlord intends to refurbish The wording contained in Ground 6 of the Housing (Scotland) Act 1988 is less ambiguous and has been used successfully for almost 30 years. It would be clearer and better to replicate that wording. For example the current wording would give a mandatory eviction even if the tenant was prepared to put up with disruption or stay with family or friends for a few weeks rather than have to seek another home. Ground 6 of the 1988 Act sets the bar much higher before a tenant is forced out of their home. Ground 4 concerning the landlord’s family wishing to live in the property is equally vague, but also a mandatory ground for eviction, using the term ‘the landlord intends..’ Homeless Action accepts there are circumstances where a landlord should be able to repossess the property for use by themselves or a family member. However, it is not clear what evidence would be required to prove the ‘intention’ and, as a result, how a tenant could challenge it if they felt that there was no clear intention on the landlord’s/ family member’s behalf to live in the accommodation. The proposed penalty of a maximum 3 month’s rent for false use of this ground by a landlord is too low. In our view eviction using false information is an illegal eviction which should be a criminal offence subject to a term of imprisonment and substantial fines. Ground 5 again uses the vague term ‘intends’ (to use the property for a non residential purpose) without specifying how that intention is to be evidenced, and again is a mandatory ground for eviction. In all these cases in our view the Tribunal should have the duty to test how real the intention is and whether it is reasonable to evict in the circumstances. Once again any challenge is likely only to take place after a tenant has lost their home and the maximum penalty is not a realistic deterrent. Ground 7 Tied Accommodation. Homeless Action would suggest the addition of a phrase such as ‘and the property is required by another person employed by the landlord, or who is expected to be employed by the landlord.’ If the accommodation is ‘tied’ accommodation it is only reasonable to evict if another employee is to make use of the property.

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Ground 10 Making any ‘material’ breach of the terms a mandatory eviction ground could lead to unreasonable actions, for example eviction due to non-notification of a sub tenant. Ground 11 rent arrears. This ground is vague and confusing. There are two grounds in the Housing (Scotland) Act 1988 which are clearer and cover both persistent non- (or delayed) payment of rent and a tenant being three months in arrears of rent (grounds 8 and 11 one of which is mandatory and the other discretionary). We recommend that the formulations which are clear and have been successfully employed for almost 30 years are simply replicated in this Bill. Ground 12 Criminal Behaviour. The fact that this is proposed as a mandatory ground may have unintended consequences. For example if the perpetrator of domestic abuse is jailed both perpetrator and the victim would be liable to mandatory eviction. We therefore recommend that this ground is discretionary to avoid such anomalies. Penalties for wrongful termination Homeless Action believes the penalties for wrongful termination are far too weak. A penalty of only 3 month’s rent is not a real deterrent for those who deliberately seek to misuse the system. In our view deliberately using false information to achieve an eviction should be regarded as an illegal eviction and subject to the criminal law, with the possibility of both a jail sentence and substantial fines. Given that the wording of the legislation is very loose in relation to several of the grounds for eviction it is even more important that there is a clear strong deterrent for those rogue landlords who seek to misuse the grounds. Statutory terms of tenancy Homeless Action is supportive of the principle of statutory terms of tenancy though much depends on the detail and any action being a discretionary rather than mandatory ground for eviction. We believe these should be drawn up with input from a broad range of stakeholders, and we would be happy to be involved in their development. If the tenancy terms are robust they should reduce the levels of homelessness arising from the private rented sector. Rent control/ Rent pressure zones Homeless Action welcomes the proposal to introduce some form of rent regulation and regards the proposal for rent pressure zones to be acceptable as an interim measure. In the longer term we believe there needs to be a fundamental investigation into rent control including learning lessons from abroad and modelling the potential consequences over, say a 20 year period including various potential economic scenarios before a long term system is introduced. Rent regulation is extremely complex. It is important to balance the needs of landlords to be able to generate sufficient profit to remain in the sector whilst at the same time ensuring that private renting is both high quality and affordable for a broad range of income groups. Homeless Action is concerned that virtually all recent suggestions could result in unintended

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negative consequences. In our view it is better to get this right over a period of time than to adopt a policy quickly. We are therefore relaxed about the rent pressure zones as long as they are considered to be an interim measure to be used until a permanent long term and sustainable system of rent control can be developed. Notification about other residents This provision is a new provision which appears to intrude unnecessarily into the lives of tenants. If it is to be included in the final legislation Homeless Action would recommend that it be restricted only to those living in the premises as their only or principal home. It really isn’t any of the landlord’s business if someone has a friend or relative to stay for a couple of weeks. Onus on tenant/ 3rd party action Very few tenants ever bring a case against a landlord. Most are too busy searching for and securing alternative accommodation at the time when they could be seeking redress for unfair or illegal actions by the landlord. It is unlikely to be much different with the new legislation. In our view it is important that those landlords who are breaking the rules or the law are brought to account. One means of doing so would be to permit third parties such as local authorities, law centres or advice agencies to bring cases against landlords – especially those who are thought to be repeat offenders. Summary The Bill is an enormous step forward, especially in removing the ‘no fault’ ending of a tenancy simply by giving notice, which is in the current Short Assured Tenancy regime. Statutory terms and/or a model tenancy agreement will bring a consistency and professionalism to the sector, and should outlaw some of the more ludicrous tenancy terms Rent regulation is a complex field which requires substantial investigation before any permanent system is introduced. As an interim measure Rent Pressure Zones are a reasonable option to pursue. The headline grounds for eviction cover the right broad reasons. All of them should be discretionary i.e. subject to a test of reasonableness. Many of them require tighter formulation. Some could be replaced by the wording of existing grounds in the Housing (Scotland) Act 1988, which have worked effectively for almost 30 years and whose interpretation has been clarified through case law. The penalties for wrongful termination orders are too lenient. Illegal eviction is extremely serious. An eviction secured by false pretences should be considered an illegal eviction, considered as a criminal offence and subject to penalties which could include imprisonment and substantial fines.

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The onus should not always be on the tenant to instigate action against a rogue landlord. 3rd parties such as local authorities and law centres should be empowered to instigate action. Robert Aldridge Chief Executive Homeless Action Scotland October 2015

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Written Submission from the Living Rent Campaign The Living Rent Campaign was established to give tenants a stronger voice in the creation of housing policy. Over the last year we have engaged with thousands of tenants across the country; on the street, in their homes, and at local meetings. Dozens of trade union and community organisations affiliated to the campaign, representing over a million people in Scotland7. In our consultation with tenants, we have established that there is a great need for reform , and as such this bill is very welcome. Its will greatly improve the situation of tenants renting privately in Scotland. Renting privately is the least secure and the least affordable tenancy type, and as a result it is by far the the least popular tenancy8, with the overwhelming majority of respondents in Scottish Government research stating a preference for social housing or owning their home.

Security

Case study: A couple living in private rented accommodation who joined the Living Rent campaign told us about their unjust eviction, which was only possible because of the ‘no fault ground’ for repossession. They had had been charged over £300 of illegal admin fees by their letting agency, which they were able to recover by threatening a small claims action. A week after being refunded those fees, they received a notice to quit and had to move out. Given the growing size of the private rented sector, and its changing demographics, security of tenure is becoming an increasingly vital issue. For example, the PRS is now home to an increasing number of families, with 32% of households having children9. In addition to demographic changes, insecurity is increasing the risk of homelessness. Almost one fifth of homeless applications made in 2013-14 came from the private rented sector, a rise of 38 per cent in five years10. Removal of the ‘no fault ground’ The bill contains provisions to greatly increase the security of private tenants, with the removal of the ‘no fault ground’. This will put tenants in a far more secure position, and give them the confidence to contest issues such as illegal fees, poor repairs and other bad practice in the sector, without affecting the right of landlords to recover possession of a property where they have a genuine need to do so. We strongly support the removal of the ‘no fault ground’. 7http://www.livingrent.org/about-us/ 8http://www.gov.scot/Resource/Doc/201059/0053730.pdf; http://www.gov.scot/Publications/2010/07/23125736/4; http://www.gov.scot/Resource/0048/00485802.pdf 9Scottish Household Survey 2014 10Shelter Scotland - http://scotland.shelter.org.uk/__data/assets/pdf_file/0017/1050272/Homelessness_in_Scotland_2014_Getting_behind_the_statistics_FINAL_V2.pdf

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Initial tenancy periods We do not support the re-introduction of a minimum contractual period where the tenant is unable to leave. This limits the flexibility of tenants to move to seek work, or leave due to a poor repairing standard. This provision could also give unscrupulous landlords the power to pressure tenants into accepting even longer terms which could be unduly restrictive and could create hardship. We recommend that there is no initial period, and that tenancies are indefinite. Grounds for eviction We believe that the list of grounds is comprehensive, although we have some significant concerns, and identify five ways in which they could be improved. 1. Rent Arrears Given the crisis of affordability in the PRS, we are particularly concerned about the rent arrears ground. Currently, it is proposed that if at any point in a three month period of rent arrears, the tenant has accrued rent arrears totaling more than one month’s rent, eviction is mandatory. This appears to be unnecessarily punitive, rather than corrective. We believe that an eviction should only be granted if rent arrears exceed three months, and that the ground be made discretionary. Furthermore, we believe that the landlord and Tribunal must ensure that the tenant has had access to financial and benefits advice, and that all other options are exhausted before granting an eviction, such as negotiating a repayment schedule. 2. Intention A landlord’s ‘intention’ to, for example, sell, refurbish, or move into the property, needs to be clarified, otherwise this could be used as a loophole by unscrupulous landlords. We believe that an ‘intention’ should require evidence of a very firm commitment. 3. Hardship Clause We recommend that an additional clause to be added, a hardship defence, similar to the provisions in the current assured tenancy system11, where the court can postpone, delay or suspend an repossession proceeding. We believe that this provision should apply in all cases, not just those grounds with discretion, so that a tribunal could adjourn repossession proceedings to, for example, allow a tenant an extra two months to find a new flat to move into, or to arrange a repayment schedule for rent arrears. This added flexibility

11 Housing (Scotland) Act 1988 s20

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could alleviate a great deal of hardship for tenants facing repossession proceedings 4. Rogue landlords We believe that the grounds that are aimed at rogue practice in the sector, involving landlord registration, HMO licensing, and overcrowding, unnecessarily penalise the tenant for the criminal behaviour of the landlord. We believe that these grounds should be removed, and local authorities use measures other than evicting tenants to tackle rogue landlords. 5. Discretionary grounds There are significant concerns surrounding the grounds for eviction, as noted above, and the potential for hardship. We recommend that there are no mandatory grounds, so that the tribunal can always use its discretion to take into consideration the wide and varied circumstances of the case before them.

Affordability Case study: A family living in private rented accommodation in Leith, were recently told that their rent would go up by £100 per month. The family are on a relatively low income, and this amount is too high for them to manage. The landlord will not negotiate, and so they have had to look for alternative accommodation at short notice. We generally welcome the increased provisions in this bill to tackle excessive rent increases. Given that the scarcity of housing will be a problem for the foreseeable future, even with the significant amount of affordable housing that has been committed to by the Scottish Government, affordability in the PRS is going to be a long term problem, and requires action. The numbers of households struggling to afford the rent is increasing. For example, the number of private rented households in Scotland needing housing benefit to help with their rent rose by 62 per cent, from 60,000 in 2008 to 97,000 in 201312. Tenant arrears are currently at a record high, having more than doubled in the past year, from 6.4% of all rent due in September 2014 to 13.2% in September 201513. Predictability and Quality The steps taken to regulate rents in the Bill are an important step forward. We appreciate measures to limit rent increases to only once per year, with a the three month notice period, and the provision for tenants to be able to take excessive rent increases to a rent officer for adjudication. This will help

12 https://www.jrf.org.uk/report/referendum-briefing-housing-and-low-income-scotland 13 http://www.lslps.co.uk/documents/buy_to_let_index_scottish_sep15.pdf

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tenants plan their finances, and increase their security against excessive rent rises. However we have several concerns about this system, and suggest some improvements.

1. We are concerned about the way in which a rent officer may calculate an open market rent. The private rented sector is ‘overheated’, in many places rents do not reflect the quality or state of repair of a property, or the true demand for the sector in a housing market where tenants are forced to “choose” private rented housing because they lack access to other tenure types. Most tenants are paying a very high proportion of their income on rent14, and the majority of private rented properties fail the Scottish Housing Quality Standard15. We propose that a rent officer's calculation take quality into consideration when assessing rents.

2. Given that the majority of rent rises happen when new leases are drawn up, this not help tenants challenge excessive rent increases for a property in between tenancies. These rent regulations need to be extended to initial rent setting at the start of a tenancy, as well as the rent rises during a tenancy.

Rent Pressure Zones We welcome the provision for local rent controls, and the power for a Local Authority to identify a rent pressure area where, for example, rents are causing hardship, are increasing too quickly or are creating a burden on their resources. We recommend some improvements to this system, so that it can better tackle affordability in the PRS.

1. As noted above, given that most rent increases occur in between tenancies, rather than during them, the provisions for rent controls need cover new tenants not just sitting tenants. If this measure is not included then these provisions will not have the intended effect of easing rent pressure for tenants in a geographical area, hardship, or the burden on local authorities. We propose initial rents be regulated, not just increases during a tenancy. 2. The rent cap formula is currently CPI + 1% + N, where N cannot be a negative figure. While CPI is currently at or near zero, we cannot always rely on a measure of inflation to be low. CPI for example has been as high as 8.5% percent16. This could mean that rents would be able to increase by at least 9.5% per year, even in a rent pressure zone. We therefore recommend that the formula be CPI + N, where

14 https://www.jrf.org.uk/report/referendum-briefing-housing-and-low-income-scotland 15 http://www.gov.scot/Topics/Statistics/Browse/Housing-Regeneration/TrendDampness 16 http://www.ons.gov.uk/ons/datasets-and-tables/data-selector.html?cdid=D7G7&dataset=mm23&table-id=1.2

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the N can in extreme circumstances be a negative number, to counter high inflation.

The Living Rent Campaign October 2015

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Written Submission from NUS Scotland

NUS Scotland welcomes the Scottish Government’s decision to reform and further regulate the Private Rented Sector (PRS). This sector has grown substantially over the past few years, and private rented accommodation now provides a long term home for an increasing number of people. Students and young people make up a large proportion of those living in the private rented sector - over half (57%) of the tenants in the private rented sector are between the ages of 16 and 34, and this number is growing (Scottish Household Survey 2012). Thus, a sector that provides security, flexibility and affordable homes is highly important for NUS Scotland’s student membership. Introduction and summary NUS Scotland welcomes this opportunity to provide written evidence as part of the committee’s scrutiny. We strongly support the creation of a streamlined, simplified and clarified private residential tenancy, and welcome the recognition by the Government to the need for more flexibility and security of tenure for tenants in the private rented sector. We believe that in order to ensure that the new proposed tenancy will provide enough rights, security and affordability for tenants, legislation must ensure that:

1. Rent is controlled within and between tenancies, linked to cost of living and quality of housing.

2. The no-fault ground for repossession is removed 3. The grounds for removal can be appealed by tenants and are clearly

defined in legislation 4. Tenancies will roll-over on a monthly basis 5. The notice to quit period for tenants will be one rental month

The case for rent controls According to figures from HomeLet17, rents in Scotland have risen by 11.7% in the past year, faster than anywhere else in the United Kingdom. Our members live on some of the lowest incomes in the country, and costs have increased hugely in some regions in particular. For example in Aberdeen, where two universities and a large college attract thousands of students, rent for four bedroom properties has risen by 65.8% over the past four years18. With student support levels and pay levels stagnating, the situation for students and other private rented sector tenants on low or average incomes living in many areas is unsustainable, and the extremely high rental prices indicate that the market is not fit to provide rented accommodation for all those who need it. Aberdeen, Edinburgh and Glasgow are among the locations with the highest rent levels in Scotland, but also the highest student populations in the country. In order to access education in these areas, students in Scotland must be able to afford the living costs. We believe that in order to ensure that our members and other private rented sector tenants can afford to live, study and 17 http://homelet.co.uk/assets/documents/1892-Nov-HRI-FINAL.pdf 18 http://www.scotland.gov.uk/Publications/2014/11/2313/10

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work, rent levels in the private rented sector must be brought down to an affordable level. While the measures proposed in the Bill are a welcome step, and a clear indication from the Scottish Government that high rents are a serious issue requiring legislative action, we have concerns that the proposals do not go far enough, nor do they take account of historical, above inflation increases in rent. The ultimate solution to high rent prices is to increase the provision of social housing, and other affordable housing in the rented sector, opening up affordable housing to all. However, we urge the Scottish Government and Parliament to use this Bill to implement policies that control rents to ensure that rent levels in the PRS do not rise to an unaffordable level taking into account two main principles:

1. Rent levels are regulated according to the dynamics of the local market 2. Rent increases are controlled both within existing tenancies and

between tenancies. This would ensure those in shorter tenancies would also benefit from rent controls.

Rent controls within and between tenancies NUS Scotland believes a rent control model for Scotland should ensure that rent levels are not just controlled for existing tenants, but also in between tenancies. The model of rent controls proposed only controls rent increases within existing tenancies. However, while this would provide certainty over rent levels, it would not necessarily control affordability of rent levels. While NUS Scotland is supportive of the predictability of rent increases this model would provide, such a model might encourage landlords to pre-empt inflation and changes in the market by raising rent substantially between tenancies. This could be particularly problematic for tenants who tend to live in a property for shorter periods of time, as rent levels for the part of the sector that caters to them might be raised faster than for properties where tenants stay for longer time periods. Thus, rent controls should be linked to a tenancy and property. We believe that notice of rent increases within a tenancy should be no less than 16 weeks. We need to make sure that tenants have adequate time to prepare for rent increases. We also believe rent reviews should be limited to no more than once every 18 months. Tenants should have security in the knowledge that their rent cannot go up at any given moment, as many people in the PRS cannot rely on their wages increasing annually. We believe a limit of 18 months is an appropriate compromise. NUS Scotland also has concerns that limiting rent increases to below Consumer Price Index (CPI) within existing tenancies would not be sufficient to tackle the already high level of rent prices, and may even encourage some landlords to ‘hike up’ rents to level with CPI increases. Furthermore, we would like to question whether CPI is the right indicator to measure the affordability of rent, as it does not take into account tenants’ income levels.

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Rent pressure zones As mentioned above, rapidly rising rent levels are particularly difficult in certain areas. Therefore NUS Scotland welcomes the introduction of rent pressure zones, and agrees that Scottish Ministers should have the power to cap the levels of rent increases for sitting tenants in areas where rents are rising excessively. We believe rent levels should be reflected against indicators that describe the income of those living in the PRS in a local area. A local authority could also demonstrate that a growing number of people living in the PRS are struggling with rent levels if they are able to show that applications for Local Housing Allowance are rising or if the number or rent arrears cases in First-tier Tribunals are rising. We would urge the committee to consider thresholds and detailed requirements for this evidence. This is necessary to ensure that Ministers have proper guidance indicating when an area qualifies as a rent hot-spot and the proposed regulation can be properly utilised. There are numerous examples of successful government policy elsewhere in Europe that controls the price of rent that take into account these principles. Germany: Rent increases within existing tenancies are regulated

according to a local average rent index. Within a tenancy, rent can only be increased by less than a fixed amount per annum, and not above the local average rent. Furthermore, while initial rent levels can be set relatively freely, they cannot be higher than 50% of the average local rent level.

Netherlands: Rents are controlled through a points system. Dwellings are given points according to different characteristics (e.g. size, location, local amenities), and a maximum rent level is then determined by the scoring given.

Challenging an unfair rent rise NUS Scotland supports the ability of tenants to have the ability to refer a rent increase to a rent officer at Rent Services Scotland and it is important that this process is as clear and simple as possible. However, we would like to stress that this safeguard only works if Rent Services Scotland is adequately resourced and tenants receive the information and support they need to challenge unreasonable rent levels. A duty should be placed on Rent Services Scotland to engage with local communities in order to ensure that tenants in the private rented sector are aware of the service and how to utilise it. We also believe that referring a rent increase to a rent officer should never incur a cost to the tenant, which would be a clear barrier for low-waged tenants to tackle unfair rent rises. Furthermore, we believe that the definition of “unreasonable” needs to be explored in more depth. It is important that this is related to the reality of peoples’ incomes, and not solely related to market levels or CPI. Where rents far outstrip the costs to landlords – as is demonstrably the case in many areas – that should also be considered unreasonable. For this reason, we also believe that tenants should have the ability to refer not only unreasonable rent increases for adjudication, but unreasonable rent levels as well. We believe that a model similar to the Dutch system, where properties are assessed

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against a points system based on criteria such as energy efficiency, size, and quality provides a sensible model to assess the reasonableness of rent levels. There should be a clear need to have any rent increases (if not the starting point of rent) to be linked in some way to quality. Doing so would (a) ensure that tenants are able to challenge the cost and quality of their property, without fear of reprisal, and (b) ensure that cost is linked in some way to quality, as it is in many other sectors and consumer areas. Removal of the “no-fault” ground for repossession NUS Scotland believes that currently, the no-fault ground for repossession leaves tenants in the private rented sector in an extremely vulnerable and insecure position. Especially since the private rented sector is increasingly catering for people who want to stay in their home for the longer-term, the ability for a landlord to repossess the accommodation even where a tenant has fulfilled all their contractual duties has a detrimental effect on security of tenure for tenants. We believe that if a tenant fulfils all their contractual duties, and where some specific conditions (such as a need for the landlord to sell their property) do not arise, a tenant should be able to stay in the property indefinitely. The removal of the no-fault ground would significantly increase security of tenure for tenants in the private rented sector, and thus NUS Scotland is strongly supportive of this proposal. Other grounds for repossession NUS Scotland recognises that landlords must feel secure in the knowledge that they are able to repossess their property in certain situations, but these must only be in limited circumstances and ensure security for tenants. While we broadly agree with the majority of the new grounds for repossession, and support the reduction in the number of grounds, we have serious concerns regarding the grounds for removal which result not from any fault of the tenant, but from a change in a landlord’s circumstances. For example, if the ground “Refurbishment”, is made mandatory, the need for minor repairs may lead to a tenant being evicted from their home. We believe the exact content of this proposed ground is too open to interpretation, and therefore there is a risk that the ground could be abused in order to undermine tenants’ security of tenure. We also have concerns regarding the ground “Tenant has otherwise breached the tenancy agreement” being made mandatory, as it could potentially be used to evict a tenant simply for committing a minor technical breach of their tenancy agreement. NUS Scotland believes that with the implementation of the new, specialised Private Rented Sector Tribunal, there is no need to make any repossession grounds mandatory. However, at a minimum, we are calling on the Scottish Government to ensure that there is an element of discretion attached to grounds where a tenant is not at fault, so as to ensure that tenants have sufficient rights to appeal. We also urge the Government to consider the implications of making the proposed ground “Tenant has otherwise breached the tenancy agreement” mandatory, as outlined.

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As above, we would want to see the Bill ensure that all of the (now sixteen) proposed grounds are discretionary, helping ensure that none of the grounds will be abused. Furthermore, we would want to ensure that the exact content and legal text of all the proposed grounds will be consulted on and given careful consideration and full definition, potentially through ministerial guidance. Finally, NUS Scotland opposes any proposal that would undermine security of tenure. Other stakeholders have proposed the introduction of an additional ground for repossession for student lets, arguing that landlords should be able to repossess a property from student groups in order to retain the property within the ‘student market’. NUS Scotland believe this proposed additional ground to be wrong in principle and in practice. In principle, it would deny security of tenure from a key group within the PRS. Equally, if this precedent is set for student tenants, similar exceptions may be argued for other tenant groups in the future. In practice, such an additional grounds would not be workable, as it would be impossible to define the tenants within a property as students or not throughout the tenancy. NUS Scotland believes the current ‘student cycle’ which some organisations wish to protect is not fit for purpose. Many students’ associations and unions across the UK have run campaigns to encourage students not to sign a contract for a property six months or more before they take up residence because of the issues it can produce around changing relationships and issues around dropping out of their courses. The new tenancy gives students the security of tenure to stay in their homes through the summer if they wish, therefore providing more flexibility for such a diverse tenant group. NUS Scotland believes that with careful management, students can be asked if they wish to serve notice to vacate their property for the end of the academic term, just as many student renters are already asked if they wish to carry on their tenancy into the next academic year. Tenant education will be key, and it will be important for renters to understand they are the party that needs to serve a notice to quit. It seems unlikely that any renter will want to be liable for more than necessary, therefore it will be in the tenants’ own interests to serve a notice to quit if they wish to leave at the end of the academic term. Notice from landlords when issuing a notice to leave We strongly believe that tenants who want to stay in their rented accommodation on a long-term basis must be able to feel secure in the knowledge that their tenancy cannot be terminated frivolously. The removal of the no-fault ground for repossession is the most significant step towards ensuring greater security of tenure for tenants in the private rented sector. However, ensuring that if a tenant has made their home in a property for a long period of time, they will have enough notice to prepare for moving accommodation is also crucial in regulating for a private rented sector that is fit for purpose. NUS Scotland supports the principle of linking the length of notice periods to the length of the tenancy. However, we are concerned that four weeks is too

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short to allow for tenants to make the necessary preparations for moving, no matter how long they have stayed in the property for. Tenants should have the right to a longer notice period especially where the tenant is being removed for no fault of their own. Thus, we urge the committee to consider starting the sliding scale for notice periods to, at least, eight weeks for tenancies shorter than six months. Security of tenure and student accommodation NUS Scotland would strongly oppose any proposal that would undermine security of tenure. The argument is that landlords should be able to repossess a property from student groups in order to retain the property within the ‘student market’ and the ‘student cycle’. NUS Scotland believe this to be wrong in principle and in practice. In principle, it would deny security of tenure from a key group within the private rented sector. Equally, if this precedent is set for student tenants, similar exceptions may be argued for other tenant groups in the future. It would often be impossible to define the tenants within a property as students or not throughout the tenancy. For example, many college students will be on part-time or short-term courses, while others may drop-out or move on from studies to work during a tenancy. It would be wrong for legislation to treat students as a homogenous group, and clearly would present huge logistical difficulties of defining who is a student, and when they cease to be a student. We would be open to consideration being given for landlords to make a request to students to consider ending the tenancy, as we believe that tenant management and education will be enough for student tenants to serve notice to quit if they do wish to leave their property at the end of an academic year. We therefore believe that no-fault repossession should be rejected for all tenant groups, including students. Where the inclusion of ‘student cycle’ would be appropriate, and would be very interested to know if this is the case, is if university halls of residence are intended to be captured by this Bill. If so, these are the only grounds where we would support retaining the property within the ‘student cycle’ as grounds for repossession, as halls of residence are obviously required for each years intake of new students. If this is to be the case then we would be hopeful that this means the remaining provisions in the Bill would also captu8re university accommodation, particularly when considering rent increases. University halls, despite being run by charitable bodies (as universities are) and almost all but guaranteed for all incoming, first-year students are not immune from unreasonable price increases.19 Philip Whyte, Policy and Influencing Manager NUS Scotland October 2015 19

http://www.nus.org.uk/Global/Campaigns/Accommodation%20Costs%20Survey%20V6%20WEB.pdf

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Written Submission from Shelter Scotland

Introduction Shelter Scotland welcomes the opportunity to submit evidence at stage 1 of the Private Housing (Tenancies) (Scotland) Bill. We have been campaigning for a fundamental change to the system of private renting in Scotland for many years.20 We welcome this bill as the opportunity to make that change real and fully support the principles and approach contained within in it. Our evidence below sets out recommendations for improving the operation of the proposed tenancy. The need for change Shelter Scotland helps private tenants through our free telephone helpline, housing advisers and law service. In 2014, 46% of calls to our helpline related to private rented sector issues,21 vastly disproportionate to the 14% of all households who live in the sector.22 Issues range from repairs, failure to lodge deposits in tenancy deposit schemes, unreasonable rent increases to illegal eviction. Bargaining power is central to private tenants’ ability to challenge poor practice of this kind. The current private tenancy puts renters in a weak position to negotiate with landlords. Many agreements guarantee as little as one or two months’ security of tenure beyond the initial tenancy period. This means that it is often easier for a landlord to terminate the agreement and find a new tenant, rather than face the expense of paying for a repair. Case study:

A Shelter Scotland client was living with their partner and two young children in a private rented flat. The flat had various disrepair issues including: a leaking shower; insecure windows; nails sticking up from the floor and a radiator that wasn’t properly attached to the wall. The shower was removed, but never replaced. They complained about the state of the property several times but no action was taken, so they went to the Private Rented Housing Panel. Soon after their complaint was lodged with the panel they were given notice to leave the property by their landlord.

Instability and insecurity also affects tenants’ ability to make a private sector let their home. Private renting was once viewed as the preserve of students, young professionals and temporary workers, but has now become a near-permanent housing option for newly-forming households and a younger generation of renters. Households that would have in the past either secured

20 See Shelter Scotland’s ‘Make Renting Right’ campaign, http://scotland.shelter.org.uk/get_involved/campaigning/make_renting_right 21 Shelter Scotland, An Analysis of Client Data in Scotland, July 2015 http://scotland.shelter.org.uk/professional_resources/policy_library/policy_library_folder/an_analysis_of_shelter_scotland_client_data_in_2014 22 Scottish Government, Scottish Household Survey, 2014

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a social rented tenancy or bought a home. Overall, the sector has doubled over the last ten years – now 14% of all households in Scotland rent privately, up from 5% in 1999.23 Much of this growth has come from younger households and families: 41% of households headed up by a 16 to 34 year old now rent in the private sector, up from 13% in 1999. And 26% of private rented sector households now contain children.24 For these households security of tenure within a modern and simplified tenancy regime is absolutely necessary. Security of tenure for private renters The draft bill radically improves security of tenure for private renters. This is because it does not contain a provision for “no fault” eviction, unlike the current short assured tenancy.25 Under the proposed tenancy private tenants would have indefinite security of tenure: a vast improvement on the current tenancy regime. A tenancy could only be ended if one of the grounds for eviction is satisfied. Families would be safe in the knowledge that they couldn’t be asked to move at short notice, and all private tenants would have the confidence that they couldn’t be asked to leave for simply complaining about a repair. Shelter Scotland strongly supports the removal of “no fault” eviction from Scotland’s private rented tenancy through this bill. Grounds for eviction In Shelter Scotland’s view the grounds for possession listed are reasonable. However, the detail of how they would operate in practice needs to be strengthened in the following ways:

1. The rent arrears ground could lead to disproportionate outcomes for tenants by enabling landlords to secure a mandatory eviction where tenants have one month’s rent arrears, but are unable to pay this off over a three month period.26 For a landlord to secure a mandatory eviction Shelter Scotland believes this should be increased to at least three months’ rent arrears.27

2. How the landlord’s “intention” is defined needs to be tightened, particularly in relation to a landlord’s intention to sell.28 This should be more than just an aspiration to sell, it must also be likely to happen in the circumstances.29

23 Scottish Government, Scottish Household Survey, 2014 24 Scottish Government, Scottish Household Survey, 2014 25 Part 5 of the Private Housing (Tenancies) (Scotland) Bill as introduced 26 Schedule 3 para. 11 of the bill, as introduced 27 As is currently the case under the assured tenancy regime see sch. 5 ground 7 of the Housing (Scotland) Act 1988 28 Schedule 3 paras 1-5 29 Art. 4(1)(c) of The Applications by Creditors (Pre-Action Requirements) (Scotland) Order 2010 provides the following definition of attempting to sell a property: “actively marketing the property for sale at an appropriate price in accordance with professional advice.”

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3. The First-Tier Tribunal should be given discretion to adjourn proceedings.30 For example to monitor repayments to rent arrears or to allow time to monitor a tenant’s behaviour in antisocial behaviour cases.

The initial tenancy period Shelter Scotland agrees that the standard initial period should be six months. It is also positive that a landlord and tenant can agree a shorter period of as little as three months at the tenant’s request. We welcome the limitation on the grounds for eviction they can use during the initial period. Where landlords and tenants arrange for a longer initial period – for example 12 months – tenants should be made aware that this would tie them into the full term, restricting when they can serve notice. Model tenancy agreement The Scottish Government have proposed that a model tenancy agreement be drawn up. This would contain mandatory, i.e. statutory, and discretionary clauses. There would be scope for landlords and tenants to vary the model agreement, allowing landlords to draw up their own version. Recommendation: to ensure tenants are protected from landlords drawing up leases with provisions which are contrary to the statutory terms, the Bill should state that any term which contradicts the statutory requirements would have no effect.31 Notice to leave Shelter Scotland welcomes combining the ‘notice to quit’ and section 33 notice used to end tenancy agreements under the assured and short assured tenancy regime in one ‘notice to leave’. This is an important simplification and should be a key aspect of training and promotion that will accompany the tenancy’s introduction. Notice periods The notice periods that landlords must give tenants and tenants must give landlords are both reasonable. However, the process that landlords must follow to regain possession of a property should be set down clearly. In the draft Bill the process for serving notices is as follows: a landlord serves a tenant with a notice to leave; the tenant can either accept the notice or remain in the property; if the tenant hasn’t vacated the property at the time of the expiry of the notice then the landlord can apply to the First Tier Tribunal for an eviction order. Recommendation: the bill should reference the need to take into account the provisions of the Rent (Scotland) Act 1984 which prohibit illegal eviction as part of this process.32 30 As is currently the case under the assured tenancy regime, see section 20 of the Housing (Scotland) Act 1988 31 This should be inserted into section 5 of the bill, as introduced 32 This should be inserted into s.40 of the bill, as introduced

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Rents Shelter Scotland welcomes the approach to rents as set out in the draft Bill. The limitation on rent increases to one per year and a 12 week notice period are both important. So too is the power for a private tenant to refer a rent to a Rent Officer should a rent increase put their rent well above the market rate in their area. Crucially, this must lead to better and more widely available market information on rents in the private rented sector, to better-inform policymakers, civil servants and Scottish Ministers. Rent pressure zones The power for local authorities to apply to Scottish Ministers to designate an area as a rent pressure zone is a positive move. We recognise the pressure that private rented sector rents have on household budgets and a rent pressure zone could offer an important protection from steep rent rises where it is proven that private rents are increasing rapidly in a particular area. Importantly, regard must be had to the need for genuinely affordable housing in areas where private tenants’ incomes are stretched by their rental payments. Shelter Scotland estimates that at least 12,000 affordable homes need to be built in Scotland each year to meet current and future demand for affordable housing.33 Recommendation: where it is found that private rents are rising rapidly and causing hardship this should be taken into account in both local housing strategies and national policy for the purposes of providing affordable housing.34 Succession Shelter Scotland strongly supports the inclusion of a partner’s right to succeed to a private rented tenancy. Applications to First Tier Tribunal To ensure that private tenants have access to justice the Scottish Government should ensure that advice and assistance as well as legal representation is available to low income and vulnerable tenants at the tribunal Debbie King Public Affairs Officer Shelter Scotland October 2015

33 ‘Affordable Housing Need in Scotland’, report commissioned for Shelter Scotland, September 2015 34 s.33 Private Housing (Tenancies) (Scotland) Bill, as introduced