29 Oct 2011

Leasing and why Landlords need to be careful

Leasing and why Landlords need to be careful

Mike Sinclair, Senior Property Partner, examines just a few of the statutory obligations which need to be complied with before Landlords lease a property.

Mike Sinclair, Senior Property Partner, examines just a few of the statutory obligations which need to be complied with before Landlords lease a property.

The continued growth of the private rental sector has been matched with a wealth of legislation designed to protect tenants from unscrupulous Landlords. Great care must now be taken to ensure that both new and existing Landlords do not fall foul of the law.

Of particular note are the following pieces of legislation which all Landlords must address before leasing their property to a prospective tenant:

The Repairing Standard

The Housing (Scotland) Act 2006 introduced the need for Landlords in the private sector to ensure that their properties meet what is now known as the “Repairing Standard”. Essentially Landlords must now ensure that their properties are not only wind and watertight, but they must also ensure that the structure and exterior nature of the property together with all installations (and this includes services which supply water, gas, electricity etc) are all in reasonable repair and working order.

No less important is the need for properties to have a satisfactory provision for detecting fires. Whilst it is currently acceptable for existing smoke alarms (excluding properties on more than one level) to be mains powered or battery powered, any alarms installed after September 3, 2007, must be mains powered and this includes replacement alarms.

The obligation to ensure that the property meets the Repairing Standard commences at the start of the tenancy and rests with the Landlord throughout the duration of the lease. There is also a duty to provide the tenant with written information on the effect of the Repairing Standard in relation to their tenancy and how it can be enforced through the Private Rented Housing Panel (PRHP) – a Scottish body which operates as enforcer of the legislation.

If a tenant believes that the Landlord has not complied with the Repairing Standard he or she can apply to the PRHP, whereupon the Panel either rejects the application, refers it to committee or delivers a decision if the possibility of mediation exists. It is worth noting that should the PRHP decide that the Repairing Standard has not been met then the Landlord can be required to do the necessary work with the PRHP having the authority to place an enforcement order upon the property and also impose a rent relief order to reduce rent payable if a Landlord fails to comply.

Energy Performance Certificates (EPCs)

Introduced in tandem with Home Reports in Scotland, an EPC is required now for all leased properties and contains information in relation to a property’s energy efficiency and environmental impact (CO2) rating. An EPC will also detail cost effective improvements which would enhance the energy performance of the property and for all. Let properties, the certificate will require to be affixed and displayed within the property for the duration of the lease.

Health and Safety

A raft of legislation already existed prior to the introduction of the Repairing Standard and EPCs including :

  • The requirement for all electrical appliances included within the property to be subjected to a Portable Appliance Test ( PAT)
  • All gas systems require to be checked by an appropriately qualified engineer ,who will provide a Landlord Gas Safety Certificate
  • All furniture including beds and sofas need to be checked to ensure that they comply with the Furniture and Furnishing (Fire)Safety Regulations 1988.
  • Properties let to more than 2 unrelated persons may also require what is known as a Multiple Occupancy Licence in accordance with the Civic Government (Scotland)Act 1982 (Licensing of Houses in Multiple Occupation)Order 2000.

Landlord Registration

All Landlords must now be registered with their local authority’s Private Landlord Registration Scheme but before a registration is granted however, the Local Authority is duty bound to ensure that the Landlord is a fit and proper person to let. This includes a background check to ensure that the Landlord does not have a conviction within the last three years for a criminal offence, or offences that are relevant to carrying out residential letting. The Anti Social Behaviour Act (Scotland) 2004 from which this legislation derives goes further, with requiring that Landlords also have a responsibility to encourage their tenants not to behave in such a way that may cause alarm or nuisance to neighbouring properties.

For new and existing Landlords there is far more to letting out a property than first appears. Careful research and preparation at the outset will go a long way to avoid serious repercussions at a later stage.

Michael Sinclair, Partner

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