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Scottish Letting Day 2019 - Showdome afternoon sessions


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Scottish Letting Day 2019 - Showdome afternoon sessions

  1. 1. Scottish Letting Day 2019 Conference and exhibition 12 November 2019 Sponsors: Scottish Letting Day Showdome afternoon sessions
  2. 2. Succession planning for landlords Fiona Watson, Paris Steele Scottish Letting Day Scottish Letting Day 2019
  3. 3. Succession planning for landlords Fiona Watson Paris Steele 12 November 2019
  4. 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. 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. 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. 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. 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. 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. 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. 11. Fiona Watson
  12. 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. 13. Understanding the private residential tenancy Gail Bowden, SAL Scottish Letting Day Scottish Letting Day 2019
  14. 14. Gail Bowden SAL Understanding the Private Residential Tenancy
  15. 15. Agenda Making the most of - The Private Residential Tenancy (PRT) agreement video • creating a PRT • managing a PRT
  16. 16. The Private Residential Tenancy model agreement
  17. 17. Private Residential Tenancy 1 December 2017 View PRT video:
  18. 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. 19. Create the Private Residential Tenancy
  20. 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. 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. 22. Additional terms
  23. 23. Signing the Private Residential Tenancy Agreement
  24. 24. Managing the Private Residential Tenancy
  25. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 35. Easy to read notes Let’s look at some helpful clauses…
  36. 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. 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. 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. 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. 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.
  41. 41. Training
  42. 42. Information
  43. 43. Contact information: Scottish Association of Landlords (SAL) Hopetoun Gate, 8b McDonald Road Edinburgh EH7 4EZ 0131 564 0100 Twitter: @scotlandlord Scottish Association of Landlords
  44. 44. Scottish Letting Day 2019 Refreshments are served in the Stratosphere area Programme resumes 15.15pm Please visit our exhibitors’ stands Scottish Letting Day Sponsors:
  45. 45. Scottish Letting Day Conference and exhibition 12 November 2019 Sponsors: Scottish Letting Day Tweet #LettingDay
  46. 46. How to survive rent controls and the buy to let backlash Kate Faulkner, Designs on Property Scottish Letting Day Scottish Letting Day 2019
  47. 47. How to survive rent controls and the BTL backlash Kate Faulkner BSc(Econ) MBA CIM DipM
  48. 48. 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.
  49. 49. In Scotland: PRS grown at the expense of social housing, not home ownership? file:///C:/Users/Kate/Downloads/00539838%20(1).pdf
  50. 50. My view: PRS has grown MOSTLY due to government policies • education, education, education
  51. 51. Migrant workers need to rent
  52. 52. 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.
  53. 53. why aren’t government and companies paying people enough to put a roof over their head?
  54. 54. For four years in the last 13 real pay fell
  55. 55. Impact of recessions on home ownership
  56. 56. Recessions drive renting vs owning
  57. 57. 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
  58. 58. Reality: policy can’t stop the natural growth in demand for the PRS
  59. 59. Scotland needs private landlords and letting agents
  60. 60. Should you fear or welcome rent controls?
  61. 61. Affordability myths
  62. 62. How much would rents have risen under the ‘rent control’ deal?
  63. 63. Rent cap will be at least consumer price index (CPI) plus 1%
  64. 64. 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%
  65. 65. 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.
  66. 66. 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
  67. 67. Government: the cap can last for up to five years and will apply to existing tenants who have a private residential tenancy.
  68. 68. How do landlords and agents survive?
  69. 69. Consumers need: good, independent property advice our ‘consumption’ of property has changed dramatically.
  70. 70. 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
  71. 71. 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
  72. 72. Agents survival How to put a roof over your community’s heads
  73. 73. House price growth slowed since 2005
  74. 74. UK finance stats for FTBs
  75. 75. Individual property prices are key 3% increase per annum 1.5% increase per annum
  76. 76. 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
  77. 77. 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
  78. 78. What advice can you give? How can you use this to grow your business?
  79. 79. 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?
  80. 80. Informing research to shape the future of private renting Anna Evans, Indigo House Scottish Letting Day Scottish Letting Day 2019
  81. 81. Understanding the impact of the Scottish private tenancy regime
  82. 82. 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
  83. 83. 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
  84. 84. 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
  85. 85. A balanced approach TenantsLandlords Wider stakeholders
  86. 86. 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
  87. 87. 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
  88. 88. Dissemination
  89. 89. Please have your say!! Go online Survey team here today to help SAL and CLA is also distributing
  90. 90. Scottish Letting Day 2019 Thank you for coming See you next year Sponsors: Scottish Letting Day