Letting Your Property

Buying to let has become increasingly popular over the years. As the value of our pensions decrease many people are now investing in property and are benefiting from some income from that asset through renting property out to tenants.

The law regulating residential properties is extremely complex and we would strongly recommend that you seek professional help in setting up and monitoring a let.

The main form of tenancy that is used for residential leases is Assured and Short Assured Tenancies. The law regulating these types of leases is found in the Housing (Scotland) Act 1988.

All the tenancies that are set up by our letting department are Short Assured Tenancies. This is necessary to protect the landlord as a Short Assured Tenancy (SAT) only gives the tenant security of tenure (the right to stay in the house) for a certain amount of time.

If a SAT has been properly set up and if certain legal procedures are followed the Landlord is entitled to a court order for eviction at the end of the tenancy agreement. The only reason that the court will require, to issue such an eviction order, is that the duration of the lease has come to an end.

We would emphasise that the SAT must have been established correctly to allow this stress free eviction. The procedure to set up a SAT is a very complex and heavily regulated area. The landlord must notify the tenant that he is entering into a SAT before the commencement of the tenancy. He must also prove such notification was given. This notice must follow a certain form. In addition there must be a written tenancy agreement. Moreover the initial period of the let must be for at least 6 months.

If the landlord wishes to recover possession at the end of the period of the let he will have to prove to the Court that it is a SAT. In addition he must provide proof that he served a Notice to Quit and a Notice of Intention to Raise Court Proceedings. Both of these Notices must be written in a specific form and must be served within a certain period of time before the end of the lease.

Our letting department are extremely experienced in this area and can guide landlords through this minefield area with ease, ensuring that the landlord’s interest is completely safeguarded. A valid SAT will be established at the beginning of the tenancy. They will also arrange for all necessary Statutory Notices to be prepared and legally served timeously.

If a SAT has not been set up but there is a written lease agreement in place, then you are probably dealing with an Assured Tenancy. An Assured Tenancy differs from a SAT in that the tenant receives security of tenure (the right to stay in the house). Unlike a SAT the tenants keep this right even after the contract ends. As long as assured tenants are living in the house at the end of the contract the landlord cannot evict them without a court order.

It is far more difficult for the landlord to obtain a court order under an Assured Tenancy as opposed to a SAT. Firstly the landlord must serve a valid Notice to Quit within a certain period of time. He must also serve a Statutory Notice advising the tenant of his intention to raise court proceedings against them. Again this must be sent within a certain period of time. Finally, and this is where it gets difficult, the landlord must also rely on and prove one of the statutory grounds.

There are 17 statutory grounds on which the landlord can rely on. Unfortunately more than half of the grounds are discretionary grounds. This means that even if the landlord can establish the ground an eviction order will only be granted if the court thinks it will be reasonable to do so in the circumstances.

For example if the landlord can show  that the tenants are at least 3 months late in paying their rent at both the date of serving the notice and the date of the court hearing then it is mandatory for the court to issue an eviction order. If, however, the tenant has paid some rent between these dates, then the landlord can not rely on this ground but will instead have to rely on the discretionary ground that the tenant has persistently delayed in paying rent. As this is a discretionary ground there is no guarantee that an eviction order will be granted.

Therefore it can be seen how important it is to ensure your tenancy is established correctly. If not, the Landlord might find himself in the position where he has bad tenants, but as it is not a SAT he is finding it extremely difficult and expensive to recover possession of his property. It can be tempting to try and save money by setting up your own lease with tenants without receiving professional help. As explained above this is a very risky strategy and not cost efficient in the long run.

In addition to the legal procedures there are many practical things which need to be done before renting out your property. An inventory of contents must be prepared and accepted by the tenants. All furniture within the property must comply with Fire Safety Regulations and all gas appliances including central heating should comply with current gas regulations. The consent of the mortgage lender needs to be obtained.  The level of insurance will need to be reviewed. Credit checks on the prospective tenant should be carried out. It is now also necessary to apply for registration on the register of landlords. . Very importantly you will need to ascertain the rental you can charge. There may also be tax implications. The list goes on and on. Our letting department can arrange for all these practical matters to be dealt with on your behalf, alleviating you of a large administrative burden.

Our letting department also offers a full management service once the lease is up and running. This involves collecting and monitoring rent, chasing late rental payments, organising repairs, inspection of property at the end of lease, and arranging for all necessary cleaning and repairs to be carried out on completion of lease.

We hope you have found the above information helpful. If you have any queries or wish any advice on letting property please do not hesitate to contact our professional letting team who will be more than happy to help you.

For help or information call us on 0845 855 4411