NEWS P04
Disputes P11
MARKING FIVE YEARS
OF INDUSTRY PARTNERSHIP
How helpful are
photos as evidence?
STATS P08
LEGAL Q&A P15
Five years
of PRS data
Rory Cowan from BKF & Co
answers your questions
WE CELEBRATE
five years
of deposit
protection
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Publisher: SafeDeposits Scotland
We publish this second edition of Deposits in
Scotland as we celebrate our fifth birthday.
The new requirement to protect tenancy deposits was launched in
Scotland and we opened for business from our Glasgow city centre
office on 2nd July 2012. Five years later, we’re the leading provider
of deposit protection and look after more deposits than anyone else.
At the time of writing we’ve reached a further milestone as well –
we now hold £80million of tenancy deposits which is an incredible
position to be in.
Getting to this point is down, in no small part, to the way that
SafeDeposits Scotland was set up. We’re an innovative partnership
of leading private rented sector members, which positions us at the
forefront of the industry. ARLA Propertymark, RICS, TDS, and SAL have
been with us from the start, and we are thankful to them for their
support, advice and guidance along the way.
There has been the contribution of some incredible people on our
staff too. A large number of our Glasgow office, finance team and
adjudicators have been with us for most of the five years. It’s our
colleagues, both past and present, and our clients that have made
SafeDeposits Scotland the company it is today.
Looking to the future we, as an industry, need to do what we can to
show non-compliant landlords the benefits of deposit protection.
With new legislation on its way everyone involved in the private
rented sector needs direction and it’s fantastic to see the SafeDeposits
Scotland Trust’s recent grant of over £40,000 to overhaul the
RentingScotland.org website.
Through collaboration, expertise and commitment, SafeDeposits
Scotland is stronger than ever. Here’s looking to the next five years.
Victoria Nixon is Operations Manager for
SafeDeposits Scotland
Publishing Editor: Charlene Moore
Content and Production: frame.agency
3
An update from
each of our members
Short Term Lets:
Right to Regulate?
Green MSP Andy Wightman
has called for legislation of the
short-term letting market after
receiving reports of anti-social
behaviour and constituents
in the Lothian region raising
fears for security.
Grievances of this nature usually increase at peak holiday times or when
large events take place in a locality. At these times landlords - or those
letting their property for the weekend - seek to maximise returns on their
investment, or gain some quick cash.
Scottish Government figures show expenditure of overnight visitors to
Scotland was worth £4.9bn to the economy in 2015. While there are calls
for tighter controls on short-term lets, restricting availability could have
negative consequences for Scotland as a whole.
However, the nuisance factor needs to be addressed; whether by the planning
system, anti-social behaviour controls, or regulation is up for debate.
The Housing Minister rightly said the planning system can’t “readily
distinguish” between housing tenures. However, with a Planning Bill
expected by the end of 2017, there is scope to use this framework.
But while planning permission is required for short-term let usage, that
does not stop rogue landlords, and this drives the need for regulation.
Through Antisocial Behaviour Notices, Edinburgh Council Officers have
pinpointed repeat offending landlords and complainants to discuss the
issues. However, it’s unclear how effective this has been.
Regulation of short-term lets is a possible solution but would be difficult
to implement. Given the low percentage of the market involved in shortterm lets, regulation may not be cost effective. We also have to consider
who, or what, should be regulated: the property, the landlord, or both?
Any policy or legislative change will need time to discuss and implement.
Any action must strike a balance between supporting “genuine” short-term
letters and those who will let to anyone, regardless of reputation or intent.
Gail Hunter is Regional Director – Scotland for RICS
and a Director of SafeDeposits Scotland
www.rics.org/uk
Celebrating five years of
SafeDeposits Scotland
In 2011, The Dispute Service (TDS) and a range of industry organisations
pooled resources to deliver a bid to the Scottish Government to
operate a custodial deposit protection scheme, and in 2012 launched
SafeDeposits Scotland.
TDS already had five years’ experience in running its statutory Tenancy
Deposit Scheme in England and Wales when SafeDeposits was launched.
It provided the initial working capital and key services for the set up
including IT systems, software, and independent dispute adjudication.
“
SafeDeposits is a great example
of how like-minded organisations can
come together to launch a new service
that delivers safe deposit protection
services alongside impartial dispute
resolution
”
4
Since its inception, SafeDeposits has grown exponentially and now boasts
19 staff at its Glasgow head office and is the clear market leader in Scotland.
Steve Harriott, Chief Executive at TDS, said: “SafeDeposits is a great example
of how like-minded organisations can come together to launch a new service
that delivers safe deposit protection services alongside impartial dispute
resolution. SafeDeposits has benefited from the enthusiastic backing of
our industry partners from ARLA Propertymark, RICS and SAL.
“After five years, we are now the ‘go to’ deposit scheme in Scotland,
financially strong and offering a quality service. We are really looking
forward to the next five years.”
Steve Harriott is the Chief Executive of
TDS and a Director of SafeDeposits Scotland
www.tenancydepositscheme.com
chairman Ian Potter praises
partnership performance
From day one SafeDeposits has been a partnership between member organisations; ARLA
Propertymark, RICS, TDS, and SAL who are all featured on these news pages. All of which have
experience of operating in Scotland to set and raise standards within the private rented sector (PRS).
Over the last five years we have endeavoured tirelessly with our partners to build a successful
business commanding around 60% of the market, and supporting the sustainability of the sector
through our Charitable Trust.
“SafeDeposits will continue to strive for the highest
levels of customer satisfaction”
Our member organisations provide us with the opportunity to talk directly to large sections of the
PRS, helping grow our market share. But we cannot be complacent. SafeDeposits will continue
to strive for the highest levels of customer satisfaction, and provide assistance to its users
to increase awareness of the practicalities of dispute resolution for all sides.
Practices have had to change for many and this will continue but we have plans to work with
our partners to provide more training and education.
The next few years are expected to be very challenging for SafeDeposits as interest rates are
projected to remain low which means that we will have to operate efficiently to allow us to
achieve all our ambitions, but a strong partnership is a really powerful weapon for success.
New tenancy
regime will not
affect existing
leases
Countdown to
Code of Practice
legislation
changes
Expected to commence in December 2017, the Scottish Government’s new
tenancy regime will replace the current system of assured/short assured
tenancies in favour of Private Residential Tenancies (PRTs).
With the new Letting Agent Code of Practice (Scotland) Regulations coming
into force on 31 January 2018, ARLA Propertymark has warned agents
to be ready.
The Scottish Association of Landlords (SAL) has been lobbying Holyrood for
clarity on the impact the incoming legislation will have on existing tenancies.
In response, the government has confirmed that no existing tenancies will
be affected and will continue to be governed by the existing legislation
until they are terminated by the landlord or tenant.
The Code of Practice that all letting agents must comply with is designed
to ensure uniformity in quality service across the industry. It will cover
standards of practice, handling of tenants’ and landlords’ money, and
professional indemnity agreements.
The new PRT legislation does not allow for a fixed period to be agreed for
the tenancy. Tenants can end the lease at any time on giving 28 days’ notice.
Landlords are required to give 28 or 84 days’ notice (depending on how
long the tenancy has been in place for) and can only end the lease if one
of 18 grounds for possession in the legislation apply. The legislation will
also delegate power to local authorities to apply for an area to be made a
rent pressure zone, limiting annual rent increases.
The new PRT regime is still a work in progress with secondary legislation
yet to be finalised and approved by parliament. SAL is keeping pressure on
the government to clearly define how the legislation and documentation
will work in practice.
John Blackwood is Chief Executive of the
Scottish Association of Landlords and
a Director of SafeDeposits Scotland
www.scottishlandlords.com
Part of a wider raft of regulations agents will have to abide by, it will
also include mandatory registration with training requirements and a ‘fit
and proper’ person test.
Daryl Mcintosh, ARLA Propertymark’s Strategic Development Manager for
Scotland and Northern Ireland said: “The code reflects much of the existing
good practice in the industry and is the most sensible form of agent regulation
we have seen announced anywhere in the UK. The Scottish Government
has effectively put ARLA’s membership criteria onto the statute books.
“ARLA Propertymark can help agents get ready for the changes and we are
offering flexible qualification and membership deals to help agents comply
and compete in 2018 and beyond.”
Daryl Mcintosh is Strategic Development Manager
for Scotland and Northern Ireland for ARLA
Propertymark and a Director of SafeDeposits Scotland
www.arla.co.uk/scotland
5
Agents bring a whole host of benefits for landLords but how do you spot a good
one and what’s the best way to help them to help you?
Four common mistakes
that landlords make:
SETTLING FOR SUBSTANDARD AGENTS
DJ Alexander is the largest agency in Central
Scotland. Here, its Associate Director Rob Trotter
guides you through how agents can save you money
and significantly reduce the burden that leasing
often brings.
Every landlord needs a tenant, so having the backing of an agency that
can attract high quality tenants is invaluable for any rental venture. When
selecting an agent to work with, landlords should look for an organisation
that has a strong reputation in the market. A good agent will also be willing
to provide advice on what changes could be made to a property to increase
its rental value, and attract the highest quality tenant.
Agents are employed at the pleasure of landlords, so property-owners
should work with agents who always have their best interests in mind. Good
agents will scrutinise any expense to the landlord and evaluate whether
they are necessary or not, and whether the landlord is likely to see a return
on investment in non-statutory expenditure.
“
Tenants need to feel like their
concerns or issues are being listened
to and acted upon
”
The relationship between all three parties in a landlord-agent-tenant
arrangement is trust. The landlord should trust that their reputable agent
is managing their property and finances well, and their ability to attract and
keep tenants. Tenants need to feel like their concerns or issues are being
listened to and acted upon. By fostering and developing these relationships,
the risk of dilapidations throughout tenancies is likely to be reduced.
Although the agent will handle day-to-day management on behalf of a
landlord, the best agents will also provide advice; whether it’s on incoming
legislation, or tips to improve the potential rental income of a property.
When considering whether to work with an agent or not, landlords should
consider who will deliver the best service and advice, not simply the
cheapest or the first one they meet.
www.djalexander.co.uk
6
Landlords often choose agents because they
don’t have the time to manage a property, and
often they settle for the cheapest or first agent
they find. Good agents will be able to advise
landlords on how to maximise returns and avoid
unnecessary expenditure, so paying for a better
service will result in better returns.
“IT’S ONLY FOR RENTAL”
Some landlords often cut corners in the
decoration or maintenance of rental properties
that they wouldn’t cut in their own property,
because “it’s only for rental”. However, this can
be short-sighted. Agents with expertise in the
field can offer advice and recommendations
on improving a flat’s position in the market.
LOSING THE HUMAN TOUCH
When working with an agent, some landlords
can become disconnected from their property,
seeing it as an investment and collection of
incoming and outgoing expenses rather than a
home for their tenant. Less courteous landlords
may face higher rates of dilapidation than those
willing to compromise.
POOR COMMUNICATION
While agents are there to manage properties
on a day-to-day basis, they work on behalf of
the property-owner, so the landlord should
communicate regularly with their agent. Landlords
should be easily contactable and ensure that their
agent is delivering for them.
SAL’s top tips
for landlords
Contact your mortgage provider,
home insurance provider and
local authority to register as
a landlord.
The responsibilities faced
by landlords have increased
exponentially over the past
few years, and landlords can
often feel overwhelmed by the
requirements. Caroline Elgar,
Policy Manager at the Scottish
Association of Landlords (SAL)
gives her advice on how to stay
on the right side of the law.
Before advertising for a tenant, there are certain legal hoops landlords need to jump
through. For example, on mortgaged properties, landlords should obtain consent from
their provider as well as their insurer to let the property. New landlords must also register
as a landlord with their local authority and secure an Energy Performance Certificate
(EPC), as details of both must be included on any advert for tenants.
Before anyone moves into your property, you must carry out some safety checks. Electrical
safety certificates for the installation and appliances must be obtained, along with mainspowered heat and smoke detectors, and carbon monoxide detectors in rooms with boilers
or other combustion appliances. Gas-served properties will also require a gas safety
certificate and all properties require a legionnaires’ risk assessment.
Once you have identified a possible tenant, you should consider carrying out background
checks to ensure that they are likely to meet the rental payments and look after your
property. Make sure they are eligible to rent in the UK with proof of identity, proof of
address, and references where required.
Ensure your property is safe by
securing safety certificates for
electrical and gas appliances, and
fitting smoke and heat detectors.
Research your potential tenants
to make sure they are who they
say they are, and that they will
look after your property.
Provide your tenants with the
necessary paperwork they
require, including an AT5 form
and Tenant Information Pack.
Take a deposit of up to two month’s
rent and lodge it in a governmentbacked deposit scheme such as
SafeDeposits Scotland.
An absolute must for any landlord is to have your tenancy paperwork in order at the outset.
All tenants should be issued with an AT5 form and a Tenant Information Pack (TIP) ahead
of the tenancy starting, and, if required, an HMO license should be obtained. You should
also provide a detailed itinerary of the property, its condition and cleanliness.
To create a short assured tenancy, the lease should run for a minimum of six months,
but some landlords often miscalculate and leave leases one day short.
Protect yourself financially from any damage or maintenance required at the end of
the lease by taking a deposit of up to two month’s rent in advance. The deposit must be
lodged in a government-approved deposit scheme, and prescribed information provided
to the tenants.
www.scottishlandlords.com
7
SafeDeposits in numbers
From 2nd July 2012 to 30th
April 2017 we have had…
23,141
Landlords registered with
SafeDeposits Scotland
Here
to help
1,600
Letting agents registered with
SafeDeposits Scotland
313,704 £130,402,194
Total number of repayments
made by SafeDeposits Scotland
189,001 103,054
Calls answered
Emails answered
Total value of repayments
made by SafeDeposits Scotland
7,430
Live chats answered
8 seconds
36 minutes
2 seconds
Average time taken to answer calls
Average time taken to answer emails
Average time taken to answer live chats
Average deposit held by SafeDeposits Scotland
April 2017
July 2012
£691.30
£575.48
20%
Increase over five years
8
Disputes
How disputed amounts are awarded
between landlords and tenants
(as of 30th April 2017):
37%
Landlord
Average value
95.17%
9,341
Percentage of deposits
returned without going
to adjudication
£362.32
£325.59
£334.27
51%
Split
Total number
of adjudication
decisions made
12%
Percentage of disputes over cleaning/damage/rent/
redecoration/gardening/other
Tenant
(as of 30th April 2017):
Cleaning
% of total referrals
64%
£138
Average value of
the disputed amount
Damage
42%
£141
Rent
20%
£133
Redecoration
13%
£181
Gardening
7%
£80
Other
49%
£224
Percentage total shows over
100% as one dispute may
be over multiple reasons.
Tenancy deposit protection since July 2012
Unclaimed deposits
Deposits paid into SafeDeposits
(as of 30th April 2017)
Total number of unclaimed deposits held by SafeDeposits
(as of 30th April 2017)
322,055
with a
value of
£212,519,823
Deposits held by SafeDeposits
(as of 30th April 2017)
111,911
with a
value of
2,348
Total value of unclaimed deposits held by SafeDeposits
(as of 30th April 2017)
£79,349,884
£580,553
9
You’ll have just read on the previous page that, over the last five years,
95.17% of tenancies have ended without needing to go to adjudication.
For the other 4.83%, SafeDeposits Scotland’s free dispute resolution
service has come to a decision on how the disputed amounts should be
awarded based on the evidence presented. In the table below you’ll find
what evidence you should present to support your claim. Note that this
is for guidance only and every dispute is different.
Required
your claim is likely to fail without these documents
Recommended
your claim is more likely to be successful with these documents
CLEANING DAMAGE REDECORATION MISSING ITEMS GARDENING RENT
Tenancy agreement
Statement of claim
Inventory/check-in report
Photographs from start of tenancy
Invoices from before the tenancy
Check-out report
Photographs from end of tenancy
Invoices/quotations/estimates
for work done at end of tenancy
Special permissions/refusal
of permissions
Rent statement
Notice to quit correspondence
Bank statements showing pattern
of payments
Deed of surrender, where you
have agreed early termination
Lease renewals/addendum
Letters/emails/file notes/text
messages
Specialist/contractor reports
10
Disputes are, by their very nature, rarely clean cut and landlords and agents
should do everything they can to make sure processes are in place right
from the start to avoid problems.
SafeDeposits Scotland offers free, impartial adjudication on disputes and
here we look at some cases that have been encountered by the team. Alison
MacDougall, SafeDeposits Scotlands’ Director of Dispute Operations gives
her expert opinion on each – what worked and what didn’t.
Alison’s view:
Dispute: Was mould growth during the
tenancy caused by tenant or defects
in heating/construction?
Amount of deposit in dispute: £300.00
Background
The check-in report described the décor in the living room and bedroom
as “neutral, reasonable condition, with slightly patchy effect.” At checkout, there was mould growth beneath the windows and extensively in the
corners of both rooms.
The landlord claimed that despite being given advice on ventilation and
treatment the tenant had allowed the problem to build up. The tenant
said that the mould started in cold weather. They didn’t want to leave the
windows open in the ground floor flat and were concerned about the costs
of additional heating.
The tenant confirmed that they had washed the walls with a solution as
instructed by the agents but the problem soon reappeared. They provided
an email, apparently from former tenants, to confirm they had encountered
the same problem. The tenant also considered that the electric storage
heating system was inadequate.
A contractor’s report setting out the likely cause of mould growth in
a property can be useful evidence in these cases. Either party could
submit such a report.
Problems with mould often arise in a bathroom. Remember to
include in the inventory details of the ventilation available. The
adjudicator cannot assume they exist if they are not detailed.
Tenants can reasonably be expected to use available heating and
ventilation to prevent problems with condensation and mould.
However, a landlord should also ensure that heating sources are
adequate. It is generally not reasonable to expect a tenant to leave
windows in a ground floor property open for ventilation purposes
if the property is regularly unoccupied during the day.
As with other issues arising during a tenancy, the landlord is entitled
to expect that the tenant will notify them of a problem with mould
growth to allow the cause of the problem to be investigated.
It is helpful to bring the tenant’s attention to the possibility of
condensation arising, particularly if the property does not contain
a tumble dryer, and to provide written guidance on the steps they
should take to avoid or deal with it.
Outcome
In this case the adjudicator took the view that both parties bore some
responsibility for the problem. Although the evidence was relatively
limited, the effect on the walls tended to support the tenant’s assertion that
previous problems had been painted over. In addition, the type of heating
in the property can cause problems in terms of adequacy in cold weather.
However, the tenant, having attended to the problem once did not repeat
the exercise or alert the landlord to the continuing problem. This meant
that the damage at the end of the tenancy was more extensive.
Award to tenant: Award to landlord:
£200.00
£100.00
11
Alison’s view:
Dispute: A landlord made a claim
for cleaning but provided no
check-in/check-out report relying
on photos instead
Amount of deposit in dispute: £180
Background
This dispute was about several items in the property which needed cleaned
after the tenant moved out.
The tenancy agreement made clear that the tenant must “return the
accommodation in the same condition as when it was let, fair wear and
tear expected.” However, no check-in report was submitted to confirm the
condition and cleanliness of the property at the start of the tenancy. The
landlord also failed to provide a check-out report.
As well as an estimate, the landlord provided more than 200 photographs from
the start and end of the tenancy as evidence. The photographs demonstrated
that some elements of the property – for example, the oven – were less
clean when the tenant left than at the start of the tenancy. However, they
were not sufficient to indicate, for example, whether the microwave was
in the property at the start of the tenancy, and, if it was, whether it was
cleaner at the start of the tenancy than it was at the end.
Outcome
After reviewing the photographs and the estimate, the adjudicator was
satisfied that there was some deterioration in the cleanliness of the property
over the course of the tenancy. However, there was insufficient evidence
to justify the full amount claimed for. Taking into account the contractual
obligations of the tenant and the evidence provided, the adjudicator felt
an award of £80 to the landlord was fair and reasonable. The remainder
of the disputed amount was returned to the tenant.
Award to tenant: Award to landlord: 12
£100.00
£80.00
The adjudicator needs to see evidence that the cleanliness of the
property worsened between the start and end of the tenancy.
Detailed check-in and check-out reports will usually show whether
or not the property was returned in the same condition as it was at
the start of the tenancy. Without a detailed written record of the
state of the property at check-in or check-out, the success of the
landlord’s claim is likely to be compromised.
Photographs can support a written check-in and check-out report
but they can rarely replace the written word. For example, they can’t
portray smell, and are often insufficiently detailed to show cleaning
issues (such as dust or grease).
It is helpful if photographs are embedded in the check-in and checkout reports. If this is not possible, ensure that all photographs are
individually labelled and cross-referenced to the relevant section
of the written report.
If photographs are not embedded in the check-in and check-out
reports, it’s important that they are also dated, to confirm that they
were taken at the start and end of the tenancy.
Alison’s view:
Dispute: A Landlord claimed for the
cost of getting rid of smoke odour
Amount of deposit in dispute: £225
Background
This dispute was about cleaning required because of the tenant smoking
in the property during the tenancy.
The tenancy agreement specified that the tenants should leave the property
in the same condition as they found it. It also specified that they were not
permitted to smoke in the property and were required to ventilate the
property properly.
It is difficult to demonstrate a smell in the property other than
through the written word in the check-in and check-out reports.
We recommend that a landlord specifies if the property is free
from odours in the check-in report, and notes if there are any
bad smells in the property at check-out. This is in the landlord’s
best interests, particularly because remedial work to remove
smells – whether cigarette smoke, cooking smells or pet odour –
can be difficult and expensive.
The invoice should ideally attribute cost to each element of the
claim, to support the amount claimed for. While £225 may seem
like a lot to remove the smell of cigarette smoke, the itemised
invoice helped show the adjudicator the extent of the work
required, and how the amount was reached.
The check-in report records that the property was “cleaned to a professional
standard, in a tidy condition, smelling fresh, with fresh décor, clean floor
coverings and clean windows inside and out.” While the tenants had added
some handwritten notes on the check-in report – for example, the oven
was dirty and there was a stain on the living room carpet – there was no
disagreement that the property smelled fresh.
The landlord confirmed in the check-out report that the property smelled
strongly of cigarette smoke. An itemised invoice for £225 was also submitted,
which confirmed carpet cleaning, sofa cleaning and cleaning of soft
furnishings had been undertaken to remove the smell.
Outcome
The adjudicator was persuaded on the basis of the evidence provided that
an award to the landlord was justified. As the smell of cigarette smoke
is invasive, the adjudicator felt the landlord’s claim was reasonable and
awarded the full sum of £225.
Award to tenant: Award to landlord: £0.00
£225.00
13
SafeDeposits Scotland’s operations manager Victoria Nixon answers some
of the thornier questions POSED TO THE TEAM BY LANDLORDS AND AGENTS
Q: What should I do if one half of a joint tenancy moves
out but refuses to respond to the tenant changeover
request?
Q: Can I increase the tenant’s deposit when I increase
the rent?
A: The tenant changeover function has been intentionally designed to help
the rent, you should log in to your SafeDeposits user account, open the
relevant deposit summary page, then use the ‘Increase Deposit’ function at
the bottom of the page. This will allow you to ‘top up’ the deposit account
with the increased amount. Please remember to use the deposit account
number (DAN) as a reference when making the payment. We will send an
updated deposit protection certificate to the tenant, and, as it’s a material
change to the tenancy, you should also issue an updated prescribed
information to each tenant.
in case of this situation: if the tenant fails to respond to the request, it will
‘time out’ after 15 working days. This means you can enter a repayment
request to return the remaining tenant’s portion of the deposit to you, to
be re-lodged in a new deposit account, and pay the outgoing tenant. We
will hold the tenant’s money until they contact us to claim it back. If a new
tenant is moving in to replace the outgoing tenant, they should sign to
agree to the contents of the original inventory document.
Q: If it’s a tenant-find-only property with no inventory
or check-out report, what’s the best way to approach
the dispute?
A: An adjudicator needs to be able to see the starting condition of the
property and its contents and compare it to the end of the tenancy, which
is normally done through a check-in and check-out report, supported by
photographs. If this evidence is not available, unless a tenant makes an
admission of liability in their evidence, it’s unlikely that your claim will
succeed. In this situation we recommend that landlords negotiate with their
tenants outside of the adjudication process to try and reach a compromise.
Q: CAN I TERMINATE THE TENANCY WITHIN A SIX MONTH
SHORT ASSURED TENANCY DUE TO UNPAID RENT?
A: The notice has to be served at the end of the current period. Notice could
be issued either by serving a section 33 and notice to quit, or notice to quit
under the specific grounds of rent arrears. The grounds relating to rent
arrears are ground eight (three months’ rent arrears), ground 11 (persistent
delay in paying rent) and ground 12 (some rent unpaid).
14
A: Yes. You can take up to two months’ rent as a deposit. After increasing
Q: One of the tenants left without notice and has
marked the carpet. The email I have doesn’t seem
to work anymore and the tenant seems to have
disappeared. Can I claim some of the deposit for
a new carpet?
A: The deposit repayment process should not be completed until the tenancy
has legally come to an end. When you’re considering remedies for damage
to a carpet, replacement should be the last consideration – for example,
cleaning or repair should be considered first. However, if the damage is so
extensive that the carpet is no longer fit for purpose, a replacement carpet
could be claimed for. Please remember to allow for fair wear and tear when
deciding on the amount to claim for.
Partner at Bannatyne Kirkwood France & Co and ARLA Propertymark’s
solicitor in Scotland, Rory Cowan answers your PRS legal queries
Q: My tenant has abandoned the property before
the tenancy end date. How do I legally terminate
the tenancy and claim from the deposit?
A: As the law stands, there is no abandonment ground for assured or short
assured tenancies. That will change when the Private Housing (Tenancies)
(Scotland) Act 2016 comes into force at the end of this year. As such, landlords
are often faced with a difficult situation where there is a suspicion that a
tenant has abandoned the property, but no keys have been handed back
nor has the tenant contacted the landlord to confirm they have vacated.
The classic “midnight flit” scenario.
The risk landlords face is that, if they recover the property, the tenant could
reappear and claim they have been unlawfully evicted (not as uncommon
as you might think). Technically, there are only two formal ways to bring a
residential lease to an end before its end date. The first is by way of court
order (for example relying on grounds under the Housing (Scotland) Act
1988) or by written renunciation by the tenant. So, unless a landlord can
establish one of the grounds for recovery of possession under the 1988 Act
(for example rent arrears) or can get hold of the tenant to confirm that they
have vacated, there is no formal process to allow the landlord to recover
possession of the property.
In certain circumstances, I have advised clients to follow an informal process,
especially where there is a risk to the security of the premises, which involves
changing the locks and leaving notices on the main door for a specified
period. However, such a process is not risk free and advice should be sought
when considering such an approach. In terms of the deposit, only once the
lease is brought to an end can you claim from the deposit.
“
Technically, there are only two
formal ways to bring a residential
lease to an end before its end date
”
not deal with this situation, then the landlord has a duty to act reasonably.
What is reasonable will of course depend on the circumstances including
what the items are, their size and their value etc. Certainly, attempts should
be made to contact the former tenants setting out that, if the items are not
collected within a specified period, then they will be disposed of and if
they are sold, then any sums realised will be used against any rent arrears
or claims against the tenant including potential storage costs. In addition,
I would always recommend that a detailed inventory of the items left and
their condition be taken as well as records kept of any attempts made to
contact the tenants. If the items are sold, then full records of the sale and
the sums received should also be kept.
Q: How do I increase the rent on my tenancy with
an existing tenant?
A: Again, the starting point is the lease itself. The inclusion of contractual
“rent review” clauses in style leases has become more common. If there
is such a clause, then the provisions should be followed exactly to ensure
the rent increase is effective. If there is no such clause, then landlords
have the option of trying to agree a new rent with the tenant, which if
agreed can be recorded in writing. If there is no rent review clause and if
the tenant will not agree to an increase in the rent, then a landlord always
has the option to seek to bring the lease to an end under section 33 of
the Housing (Scotland) Act 1988 and re-let the property at a higher rent.
Alternatively, and perhaps preferable to ending the lease, a landlord can
evoke the procedure under section 24 of the 1988 Act.
To secure a rent increase the landlord must serve a notice (an AT2) on
the tenant. This rent increase cannot take place until a minimum period
of time has passed and only after the current contractual tenancy has
been terminated by way of a valid notice to quit. The standard minimum
period is six months which will apply where the tenancy is for six months
or more. If the tenancy is for a shorter period then the notice period will
be the length of the tenancy or one month, whichever is more. Landlords
should be aware that, where this procedure is used, a tenant can dispute
the proposed increase and seek a determination of the ‘open market rent’
from the First-tier Tribunal: Housing and Property Chamber.
Q: What am I legally required to do with items left
in the property after a tenant vacates?
A: The first thing to do is to check the wording of the lease. In many of the
styles currently in use, a process is laid out to cover this situation. If that
is the case, that process should be followed to the letter. If the lease does
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