Slides from Scottish Letting Day 2019 - Showdome afternoon sessions

1. Scottish Letting Day 2019
Conference and exhibition 12 November 2019
Sponsors:
Scottish Letting Day
Showdome afternoon sessions

2. Succession planning
for landlords
Fiona Watson, Paris Steele
Scottish Letting Day
Scottish Letting Day 2019

3. Succession planning for
landlords
Fiona Watson
Paris Steele
12 November 2019

4. Overview
• what would happen to your properties if you were unable to manage
them? i.e. illness, incapacity or death
• Powers of Attorney (lifetime)
• wills (after death)
• registration considerations

5. Powers of Attorney
• adults with Incapacity (Scotland) Act 2000 – general principals
• granted in lifetime
• Nominated Attorney(s)
• Continuing Attorney (financial) and Welfare Attorney
• registration with Office of the Public Guardian (Scotland)
• can revoke and vary

6. Continuing Attorney
Financial powers, can include:
- access to information
- dealing with bank accounts and paying bills
- exchange, sell or lease property
- administer and manage property
- tax returns
- commence, run, sell or wind up any business
- borrow or lend money

7. If you don’t have a PoA in place and you lose
capacity:
• no-one else has authority to manage your properties/business
• “next of kin” has no legal authority
• bills go unpaid?
• leases can’t be entered into/terminated
• can’t service notice on tenant in breach
• property owned by company - Incapacity of Company Director
• application to court for Guardianship Order

8. Wills
• sets out the division of your estate following death
• appointment of executor(s) to administer your estate
• how is title to jointly owned property held? i.e. survivorship destination
• use of Trusts
• review regularly
• divorce/separation/cohabitation
• lifetime gifting

9. Intestate estates
• where deceased leaves no will
• Succession (Scotland) Act 1965
• prior rights and legal rights
• your estate may end up being divided in a way you wouldn’t intend
• do not assume everything will just go to your spouse!

10. Registration
• Landlord registration:
- an attorney managing property for a family member under a PoA must
register with the local authority as an agent
- executor doesn’t need to register in first 6 months. If property still held
after 6 months, registration will be required.
• Letting agent registration:
- if managing property for a family member under a PoA, the attorney
doesn’t need to register as a letting agent with the Scottish Ministers
- if managing properties and not under the terms of a PoA, and is receiving
payment for doing so, they could be caught under the letting agent rules.

11. Fiona Watson
fwatson@parissteele.com

12. Sessions now available to attend
Scottish Letting Day
Showdome
(current room): Understanding the private residential tenancy
Biosphere Blue: A guide to completing your tax return
Ozone: Support towards meeting minimum energy efficiency standards &
Freeing up time for landlords and letting agents
Biosphere Green: Property insurance – The top secrets to ensure that you
have the correct cover in place
4D Cinema: How to survive rent controls and the buy to let backlash
Salisbury Suite: Preventing HR headaches

13. Understanding the
private residential tenancy
Gail Bowden, SAL
Scottish Letting Day
Scottish Letting Day 2019

14. Gail Bowden
SAL
Understanding the Private
Residential Tenancy

15. Agenda
Making the most of -
The Private Residential Tenancy
(PRT) agreement video
• creating a PRT
• managing a PRT

16. The Private Residential
Tenancy
model agreement

17. Private Residential Tenancy 1 December 2017
View PRT video: https://youtu.be/9ei61J6okCI

18. Meaning of Private Residential Tenancy
A tenancy is a PRT where—
a. the tenancy is one under which a property is let to an
individual (“the tenant”) as a separate dwelling
b. the tenant occupies the property (or any part of it) as the
tenant’s only or principal home, and
c. the tenancy is not one which schedule 1 states cannot be a
private residential tenancy.
Your tenant will have the protections of a PRT, even if you give
them a tenancy agreement for any other type of tenancy.

19. Create the Private Residential Tenancy

20. Mandatory terms
-the core rights and obligations, which includes,
among other things, the statutory terms
applicable to all private residential tenancies, the
repairing standard and tenancy deposits. They
are 'mandatory clauses' which must feature in
any agreement prepared using this model. These
terms are laid down in the Act, supporting
secondary legislation and other relevant housing
legislation and are indicated in bold typeface.

21. Discretionary terms
- which the landlord may or may not wish to include
in the written tenancy agreement. These are in
ordinary typeface. The model tenancy agreement
contains a number of suggested terms which the
landlord may edit or remove as required. This
category will also include any additional terms the
landlord chooses to add. Any additional terms added
or edited by the landlord must comply with the
requirements of the Act, supporting secondary
legislation and other relevant legislation.

22. Additional terms

23. Signing the Private Residential Tenancy
Agreement

24. Managing the Private Residential
Tenancy

25. Scottish Government guidance
• Your tenant can only give you notice to leave once they have started
to live in the let property. Your tenant's notice has to be given 'freely
and without coercion'. This means you must not have pressured or
persuaded your tenant into leaving.
• You and your tenant can agree a different notice period. But this must
be in writing and can only be done once the tenant has started to live
in the let property. A tenant's agreement to change the notice period
must be given 'freely and without coercion'. If you insert a longer
notice period into the tenancy agreement before the tenant is living
in the let property, the notice period will be invalid and the 28 day
notice period will apply.

26. Rent
increases • if you want to increase the amount
of rent your tenant pays you, you
have to give at least three months'
written notice before you can do it
• you must use the correct form to
give your tenant notice of a rent
increase — a Landlord’s Rent-
Increase Notice to Tenants
• you can only increase the rent once
in a year (you have to wait 12
months before it can be increased
again).

27. Ending the
agreement
Tenant to landlord – 28 days
Landlord to tenant (no tenant breach)
• 28 days (if tenant has occupied
for 6 months or less)
• 84 days (if tenant has occupied
for more than 6 months)
Landlord to tenant (tenant breach) - 28
days

28. Ending the agreement
8 mandatory grounds
• landlord intends to sell
• property to be sold by lender
• landlord intends to refurbish
• landlord intends to live in property
• landlord intends to use for non-residential purpose
• property required for religious purpose
• tenant not occupying let property
• tenant has relevant conviction

29. Ending the agreement
8 discretionary grounds
• family member intends to live in property
• tenant no longer in need of supported accommodation
• breach of tenancy agreement
• anti-social behaviour
• association with person who has relevant conviction or engaged in
relevant anti-social behaviour
• landlord has ceased to be registered
• HMO licence has been revoked
• overcrowding statutory notice served on landlord

30. Ending the agreement
2 mixed grounds
• rent arrears (mandatory if tenant owed rent for 3 or more
consecutive months and owes at least 1 months’ rent at start of day
on which tribunal first considers case)
• not an employee (mandatory if apply for eviction order within 12
months of employment ceasing)

31. Evidence examples
• rent arrears – rent statement
• anti-social behaviour – breach letters, witness statements, reports
from police/local authority ASB team
• selling - estate agent letter, solicitor letter
• moving back in - confirmation of new job, ,
affidavit
• refurbishment – planning permission,
contract with builder

32. Ending the agreement – rent arrears
Our advice on this has now changed following
the recent Upper Tribunal decision that a Notice
To Leave issued before tenants have owed some
rent for 3 months is invalid -
• advice is not to issue NTL until tenant has owed
some rent for 3 months
• so if rent in arrears since 26 July we now advise
NTL can’t be issued until 26 October (3 months
from 26 July)

33. Wrongful termination
• if landlord misleads tribunal into
awarding eviction order OR
• tenant was misled into leaving property
without eviction order
• Tribunal can award wrongful termination
order requiring landlord to pay tenant up
to 6 months’ rent. Could also jeopardise
landlord registration status.

34. Easy to read notes
• these notes explain all of the different
parts of the tenancy agreement
• each part of your agreement is
numbered, and you will be able to look
for the same numbers in these notes to
find information about each part.

35. Easy to read notes
Let’s look at some
helpful clauses…

36. 17. Reasonable care
The tenant agrees to take reasonable care of the let property
and any common parts, and in particular agrees to take all
reasonable steps to:
• ensure the let property and its fixtures and fittings are kept
clean during the tenancy

37. 20. Access for repairs, inspections and
valuations
Reasonable access, for non-emergency work, would generally mean
access during the working day (8 a.m. to 6 p.m.) Monday to Friday.
Remember
• the landlord does not have the right to enter the property without
the consent of the tenant
• the landlord can use the Right of Entry process via the Housing &
Property Chamber, First- tier Tribunal

38. 24. Ending the agreement - joint tenancies
• if the agreement is a joint tenancy then all of the joint tenants have to
agree to the ending of the agreement
• one joint tenant cannot end the agreement on behalf of all tenants
• any notice from the tenant to end the tenancy would have to be
signed by all of the joint tenants.

39. 24. Joint tenancies continued
If a joint tenant wants to end the tenancy by sending notice to the
landlord by email then this would be done either:
• by each of the people who are joint tenants sending their own email
to the landlord, all saying that the tenancy is to end on the same date
or
• by each of the joint tenants signing a paper copy notice to the
landlord and then one of those joint tenants scanning or taking a
photo of that signed paper copy notice and attaching it to an email
and emailing it to the landlord, on behalf of all of the joint tenants.

40. 38. Guarantors
• the guarantor (if any) agrees to meet the full
demands of the tenancy, on the tenant's
behalf, if the tenant does not comply with
those rules
• joint residential tenancies have joint and
several liability and so the guarantor is
guaranteeing all the joint tenants and not
just one particular tenant
• the guarantor's liability continues after the
tenancy ends - to cover any duties breached
during the tenancy where the costs are still
due to be paid.

42. Training

43. Information

44. Contact information:
Scottish Association of Landlords (SAL)
Hopetoun Gate, 8b McDonald Road
Edinburgh EH7 4EZ
0131 564 0100
info@scottishlandlords.com
www.scottishlandlords.com Twitter: @scotlandlord
Scottish Association of Landlords

45. Scottish Letting Day 2019
Refreshments are served in the Stratosphere area
Programme resumes 15.15pm
Please visit our exhibitors’ stands
Scottish Letting Day
Sponsors:

46. Scottish Letting Day
Conference and exhibition 12 November 2019
Sponsors:
Scottish Letting Day
Tweet #LettingDay

47. How to survive rent controls and
the buy to let backlash
Kate Faulkner, Designs on Property
Scottish Letting Day
Scottish Letting Day 2019

48. How to survive rent controls
and the BTL backlash
Kate Faulkner BSc(Econ) MBA CIM DipM

49. With landlords and letting agents feeling like they are under attack
from all sides
My job: to outline self-defence strategies with the aim to encourage
everyone working in this essential sector to grow their businesses and
profit in the face of adversity.

50. In Scotland: PRS grown at the expense of
social housing, not home ownership?
file:///C:/Users/Kate/Downloads/00539838%20(1).pdf

51. My view: PRS has grown MOSTLY due
to government policies
• education, education, education

52. Migrant workers need to rent

53. Growth of the ‘gig economy’
PRECARIOUS employment and the so-called “gig economy” will
underpin Scotland’s stalling growth in the coming years,
the Government’s independent forecaster has said
The SFC previously forecast GDP would grow below 1 per cent a
year to 2022 – suggesting a period of “exceptionally weak growth”
not witnessed in six decades, according to economists.
https://www.heraldscotland.com/news/15891088.gig-economy-underpins-scotlands-weak-growth-independent-forecaster-says/

54. why aren’t government and
companies paying people
enough to put a roof over
their head?

55. For four years in the last 13 real pay fell

56. Impact of recessions
on home ownership

57. Recessions drive renting vs owning
https://www2.gov.scot/Topics/Statistics/Browse/Housing-Regeneration/HSfS/KeyInfoTables

58. Highest and lowest
H/O vs PRS vs social housing
Estimated stock of dwellings by tenure and local authority: 2018
Percentage Percentage Percentage Percentage
Scotland 59 14 11 12
East Renfrewshire 84 3 4 8
East Dunbartonshire 79 8 4 8
Aberdeenshire 70 10 4 11
South Lanarkshire 68 9 5 16
South Ayrshire 67 11 4 15
Moray 57 19 5 13
Edinburgh, City of 56 25 7 8
Shetland Islands 50 6 22 15
Glasgow City 45 19 34 -
Dundee City 45 23 11 17
Privately owned
dwellings 1 Socially rented dwellings 2
Owner
occupied
Rented
privately or
with a
job/busines
From
housing
association
s 4
From local
authorities, New
Towns, Scottish
Homes

59. Reality: policy can’t stop the
natural growth in demand for
the PRS

60. Scotland needs
private landlords and letting
agents

61. Should you
fear or welcome rent controls?

62. Affordability myths
https://www.gov.scot/publications/scotlands-people-annual-report-results-2018-scottish-household-survey/

63. How much would rents have
risen under the ‘rent control’
deal?

64. Rent cap will be at least consumer price index
(CPI) plus 1%

65. Rental growth in England:
Social vs PRS
In the social rented sector, average rent increased
from £71 in 2008-09 to £94 per week in 2013-14
Controlled rent: increase of 32%
Average private rents increased from £153 to £176.
Uncontrolled rent: increase of 15%
Inflation rose by: 19%
Wages rose by: 12%
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/469213/English_Housing_Survey_Headline_Report_2013-14.pdf
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/averageweeklyearningsingreatbritain/october2019

66. From April 2016
In England, the Welfare Reform and Work Act 2016 has required
social landlords to reduce their rents by 1% each year for four years
(the ‘social rent reduction’).
This applies to both social rent and affordable rent properties.
The social rent reduction is designed to help put welfare spending on
a more sustainable footing and ensure that the social housing sector
plays its part in helping to reduce the deficit.

67. Zoopla rental index
• from 2007 to 2018 rents have risen by 18%
• average annual rise of: 1.52%
• £486 to £574
• 2007 to 2018 inflation has risen by 2.9% per year
• at 3.9% average rents would be £740 per month
• 29% more than current average rents
https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator

68. Government: the cap can last for up to five years
and will apply to existing tenants who have a
private residential tenancy.
https://www.scottishhousingnews.com/article/rise-of-generation-rent-as-average-length-of-rental-tenancies-increase

69. How do
landlords and agents survive?

70. Consumers need:
good, independent property advice
our ‘consumption’ of property has changed
dramatically.

71. Renovate
or build; inherit
Let out a spare
room; Airbnb
Buy a holiday home;
release equity,
BofM&D
Retirement or care home,
move in with kids/they
move in with you
Live at home
Rent a room
Rent a whole
property with
friend/partner
‘Boomerang
home/rent again
Buy first home:
SO/RTB/SH/H2B/
Sell 1st home & trade up or
buy 2nd home, let the 1st
Stay 1st home, BTL; split up, buy 2 smaller
homes; move into social housing
How we
consume
property is
changing

72. Landlord’s survival kit
• pick which tenant to target: carefully
• will increase in social home building affect demand?
• pick the location: carefully
• which properties are in short supply now
• and in the future?
• ensure the property is the best value in the best condition
• Or in a unique location
• carry out repairs quickly
• keep hold of good tenants
Create a financial plan, review it regularly

73. Agents survival
How to put a roof over your community’s heads

74. House price growth slowed since 2005

75. UK finance stats for FTBs

76. Individual property prices are key
3% increase
per annum
1.5% increase
per annum

77. Compare the REAL cost of
renting vs buying in your
area
Scotland
Buying Renting +/-
£7,050 £1,100 £5,950
£10,709.60 £11,465.00 -£755
London
Buying Renting +/-
£24,900 £2,093 £22,807
£24,913.16 £20,205.00 £4,708
North East
Buying Renting +/-
£6,650 £996 £5,654
£10,220.00 £10,565.00 -£345

78. Renovate
or build; inherit
Let out a spare
room; Airbnb
Buy a holiday home;
release equity,
BofM&D
Retirement or care home,
move in with kids/they
move in with you
Live at home
Rent a room
Rent a whole
property with
friend/partner
‘Boomerang
home/rent again
Buy first home:
SO/RTB/SH/H2B/
Sell 1st home & trade up or
buy 2nd home, let the 1st
Stay 1st home, BTL; split up, buy 2 smaller
homes; move into social housing
How we
consume
property is
changing

79. What advice can you give?
How can you use this to
grow your business?

80. Sessions now available to attend
Scottish Letting Day
Showdome
(current room): Informing research to shape the future of private renting
Biosphere Blue: Taster training for letting agents – meaningful CPD
Biosphere Green: Tribunal know how for landlords
4D Cinema: Working positively with Universal Credit
Salisbury Suite: Digital first impressions: How do you measure up on
LinkedIn?

81. Informing research to shape the
future of private renting
Anna Evans, Indigo House
Scottish Letting Day
Scottish Letting Day 2019

82. Understanding the impact
of the
Scottish private tenancy regime

83. Where has this come from?
• Nationwide Foundation is an independent charity
• Vision “everyone in the UK to have access to a
decent home that they can afford”
• Interested in promoting PRS where
• landlords are able to provide a high quality service
• tenants are better able to access and sustain tenancies
• tenants have robust rights which are enforced

84. To find out what?
• What is the impact of the Private
Residential Tenancy?
• - impact of the First-tier Tribunal
• - impact for tenants and landlords
• - impact of wider changes – welfare, tax
at UK level

85. To find out what?
• tenants’ and landlords’ awareness of the
PRT
• what changes have tenants and landlords
experienced?
• what about security of tenure (perceived
and actual)?
• access to justice
• affordability for tenants
• are there any unintended consequences?
• taking lessons learned wider across the UK

86. A balanced approach
TenantsLandlords
Wider stakeholders

87. Our approach over three years
Surveys – year 1 and 3
• 2,000 face to face tenant
household interviews
• 500 online landlord surveys
In-depth interviews – year 1, 2, 3
• 120 tenant interviews
• 90 interviews/focus groups with
landlords
• 20 interviews with other
stakeholders

88. When?
Year 1 – 2019/20
Surveys – now
Interviews – spring 2020
Interim report – summer 2020
Year 2 – 2021
In-depth interviews – spring 2021
Interim report – summer 2020
Year 3 - 2021-2022
Similar to year 1
Final report – summer 2020

89. Dissemination

90. Please have your say!!
Go online
https://is.gd/nationwide_ls
Survey team here today to help
SAL and CLA is also distributing

91. Scottish Letting Day 2019
Thank you for coming
See you next year
Sponsors:
Scottish Letting Day