By Craig Smith
As the Government devises ever new ways to tax income from property, so investors will seek ways to get around the measures and some people, in those circumstances, can find themselves, albeit unwittingly, on the wrong side of the law.
There’s a growing trend among some agents and landlords to market properties as ‘holiday lets’ to avoid having to comply with long-term tenancy rights.
While they may believe that designating their properties in this way allows them to sidestep many tenants’ rights of tenure, they are mistaken.
The Private Housing (Tenancies) (Scotland), which came into effect on December 1, 2017, gave private tenants greater security, stability and predictability with open-ended tenancies, meaning landlords can no longer ask tenants to leave simply because they’ve been in a property for a set length of time
The legislation also offered tenants protection against frequent rent increases – their rent can't go up more than once a year and they must be given at least three months' notice of any increase.
Tenants who have lived in a property for more than six months must be given at least 84 days' notice to quit, unless they’ve done something wrong.
Many landlords and agents see holiday lets as a means of by-passing these legislative changes.
A report published last month by the tenants’ rights group Living Rent found that some landlords were abusing Airbnb-style contracts in a bid to evade their responsibilities. The group found some tenants had occupied the same properties under ‘holiday let’ arrangements for more than 10 months.
What these landlords fail to appreciate is that tenants’ rights apply if their tenants are using the property as their home, rather as a holiday residence.
Even if no contract has been signed, the tenancy automatically defaults to a Private Residential Tenancy Agreement if both parties have knowingly entered into a long-term, residential arrangement.
The only grey area is if, at the time of letting, both parties accepted that the property was a temporary place for the tenant to live for a limited period.
The reality is that there’s no legal loophole to be exploited - the law already protects tenants in those circumstances by default. If they live in a property that’s marketed as a holiday let but viewed by them as their permanent residence, then they have the same rights as any long-term tenant.
For more information on rental properties please call your local Scottish Property Centre branch or visit www.scottishpropertycentre.net
Craig smith is a Director of Scottish Property Centre Shawlands