When the Private Residential Tenancy (PRT) was first mooted, it’s fairly safe to say that some eyebrows were raised. Mine certainly were. “No six months lease”! “What? No two months’ notice period?”! “I’ll have a new tenant every month!”. To be honest, we didn’t know what to expect. The Short Assured Tenancy (SAT) had been in place for so long and, like a nice, comfy pair of slippers, we liked it. Sure, it had its faults but, by and large, you knew where you stood with your SAT. Tenants would move in, stay for a minimum of six months and you had two months to find a new tenant when they moved out. Nothing could be simpler….
The PRT promised a lot of changes, and when things have been so comfortable for so long, who wants those, right? If it ain’t broke, why fix it? Amongst all of the hyperbole and doom-mongery, it’s forgotten that sometimes things can be made better. Sometimes, those comfy slippers can be made comfier! In the eighteen months since the PRT came into being, I’ve noticed a change in the Private Rental Sector (PRS). Some have provided challenges but some have shown some welcome surprises. Here are five PRT points.
- Admin, be gone! It seems a bit strange to say it now but there used to be a LOT of paperwork for a SAT. Remember the days of producing an AT5, the Short Assured Tenancy, the Key Agreement, the Tenant Information Pack, Guarantor Form (if applicable). There were probably other forms too. Sometimes, with HMO properties, you could have five separate AT5’s and five separate Guarantor Forms, and they’d all have to be signed and witnessed along with the lease. And, all were hard copies. The PRT came along and took all the paperwork pain away. One (albeit lengthy) lease is all that needs to be signed, and the ability to e-sign it has made things much simpler. In my own opinion, this has been one of the greatest things about the PRT.
- Constant change of tenancies. With tenants able to move out with 28 days’ notice, there was an understandable worry that tenancies would become much shorter. Why wait until half a year has passed before moving out if you’d rather leave quickly? Want a potentially cheaper short let while the Edinburgh Festival is on? No problem- just give your notice straight away. Fortunately, things haven’t transpired that way. In many cases, tenancies have been longer-term than they were under a SAT. While we were worrying about a deluge of short-term lets, something was forgotten: Regularly moving house isn’t actually that fun. Most people want to move into their new home and settle there. There has been a little bit of a change in the length of some tenancies as some tenants are perhaps more aware of the ability to move out fairly quickly. I’ve found these to be more prominent in one bedroom flats. It’s certainly not been as common as we’d feared, though.
- Students. Under the Short Assured Tenancy, it was common for students to move into a property in August or September, sign a twelve months lease and they’d live there until then. However, in reality, many student tenants would move out in June so while they were paying for the tenancy, they weren’t actually living in the property. With most students now on a PRT, this is the first year where they’re not living under a twelve months lease. This means that they can give 28 days’ notice to leave at any time so the potential for a void period over the summer has increased. What we’ve found so far, though, is that there’s an increase in the number of cases where one tenant wants to leave but their flatmate wants to move out. This poses separate concerns but it will be interesting to see what happens in the Summer.
- 28 days’ notice. If there’s anyone who wasn’t sceptical about the announcement that the notice period was going to be reduced from two months to 28 days, I’ll be amazed. With much less time to remarket the property, surely void periods were going to rise and landlords would be out of pocket. So far, this hasn’t proved to be such an issue. It’s very important for properties to be re-let quickly but with people still interested in moving into quality properties, early viewings can still mean that everything is prepared and ready for new tenants, with void periods being kept to a minimum.
- Giving Notice. With a Short Assured Tenancy, Landlords had the ability to serve two months’ notice without really giving a reason. This is definitely not the case now. If notice is to be served, it must meet one of the pre-determined reasons such as a landlord moving back to the property to live there or rent not having been paid for three months. The two months’ period is no more too. Now, if a tenant has lived in the property, 87 days’ notice must be given. Since December 2017, we’ve hardly had to serve notice to a tenant under the PRT so it hasn’t proved to be a concern. However, one occasion brought up an issue where the notice had to be issued on a Saturday. It’s very important to get this right as any errors can mean that the notice can be declared null-and-void and the process needs to start again; not what you want at a potentially difficult time!
- Without doubt, the private rental sector has been changed by the introduction of the PRT. The initial fears have so far been unfounded. The journey continues; I wonder what we’ll be saying in a year’s time!
Alan Henderson
Property Manager - 1LET