Changes to tenancy laws in Scotland are causing problems for Scottish landlords and agents, according to property management company Apropos.
The changes to Private Residential Tenant Agreement legislation, which came into force in December 2017, are having unintended consequences on the Scottish property market, according to Apropos.
The new legislation prohibits Scottish landlords and agents from withholding any deposits other than refundable deposits, provided by tenants. The remaining money must therefore be refunded immediately when the tenant requests it.
Revenue loss and administrative issues
David Alexander, managing director of Apropos, commented: “It is standard to ask for a holding deposit when a tenant likes a property, as this enables the agent or landlord to withdraw the property from the market, while various checks are carried out prior to the tenant moving in.”
However, Apropos found some tenants placing a deposit on several properties with several agents, then simply withdrawing interest in all but one after a few weeks, then asking for their deposits back. This resulted in lost revenue for Scottish landlords and agents, and considerable administrative issues, due to the need to re-market one or more properties.
Efficient legislative model required
While changes to Scottish law to improve tenant’s rights would be welcomed, these unforeseen circumstances could have been avoided with a more efficient legislative model, according to Mr Alexander.
Another unforeseen circumstance highlighted by Mr Alexander is the fact that the new legislation allows a tenant to choose when they leave.
He concluded: “This means that, instead of a steady flow of departures and arrivals throughout the month, we have a deluge at the end of each month.
“There can be many things to do in terms of maintenance and administration to process these changeovers, and this bulging of demand…is causing something of a headache for ourselves and other property management companies.”