Repairing Standard: Is your property fit to be rented privately?

The Repairing Standard was established by the Housing (Scotland) Act 2006 and specifies the minimum level of repair a house must achieve to be used as privately rented accommodation in Scotland. It focuses on the condition of the building itself, as well as all installations, fittings and furnishings that are provided as part of the tenancy. Put simply, a landlord in the private rented sector has a duty to ensure that the house they rent out meets the Repairing Standard at the start of the tenancy and throughout its duration. In addition to landlords in the private rented sector, the Repairing Standard also applies to properties occupied by employees (whether leased or not) and to licensed short-term holiday lets.

Exemptions from the Repairing Standard

There are few exemptions from the Repairing Standard obligations, most notably social housing, but there are also some important exemptions for landlords in the rural sector, which include tenancies governed by the Crofters (Scotland) Act 1993, the Small Landholders (Scotland) Acts 1886-1931, and the Agricultural Holdings (Scotland) Acts 1991 and 2003. Such exemptions apply to the main house on the tenancy if the house is physically occupied by the tenant. For the most part, crofts and small landholding tenancies are unlikely to have more than one house. However, it is not uncommon for a tenancy governed by the Agricultural Holdings Acts to include additional subsidiary houses or cottages.  The Repairing Standard applies to those additional dwellings if they are occupied by employees of the agricultural tenant or sub-let by the agricultural tenant, whether short or long term.

The exemption currently applying to the main house on these types of tenancy (agricultural, crofting or small landholding tenancies) will cease on 27 March 2027, meaning that all houses must meet the Repairing Standard. This is a seismic shift and could have significant financial consequences for some landlords.

However, an alternative exemption to the Repairing Standard, provided for in Section 16 of the Housing (Scotland) Act 2006, will continue to be available after that date. Section 16 provides that the Repairing Standard does not require any work to be carried out which the tenant is required to carry out by the terms of the tenancy agreement. However, this only applies if the tenancy is for a period of at least three years, and neither the landlord nor the tenant can choose to end the tenancy within that period.

In particular circumstances, this may offer some relief to landlords where a house is let under a Modern Limited Duration Tenancy, provided that the necessary criteria have been met. Nonetheless, most rural landlords are likely to be affected by the change on 27 March 2027, as the vast majority of croft tenancies lack a written tenancy agreement and there remain a significant number of unwritten 1991 Act tenancies of farms. If no written agreement exists, then a lease cannot be for more than one year (albeit that provisions in housing, crofting and agricultural holdings legislation provide statutory but not contractual protection for tenants under unwritten leases). In the case of 1991 Act tenancies, many will run from year to year or are unwritten, but the tenant has considerable security of tenure due to the provisions of the 1991 Act. Such tenancies would not fall with the Section 16 exception, as the tenancy is not a tenancy of at least 3 years. Therefore, the only determiner for who is responsible for what will be as per the landlord’s and tenant’s obligations to maintain, repair and where necessary renew fixed equipment on the holding in terms of the agricultural holdings or crofting legislation.

Potential pitfalls for landlords

The worst-case scenario for a landlord is that failure to meet the Repairing Standard may constitute a criminal offence. Responsibility for enforcement of the Repairing Standard lies with the First Tier Tribunal for Scotland (Housing and Property Chamber) (“FTT”). Where a tenant believes the Repairing Standard is not being met, they can apply to the FTT for a determination. Following consideration, the FTT may decide to enforce repairs by issuing a Repairing Standard Enforcement Order (“RSEO”) against the landlord and it is a criminal offence to fail to carry out repairs required under an RSEO without reasonable excuse.  Furthermore, if the FTT decide that the landlord has failed to comply with the RSEO, the Tribunal may also issue a Rent Relief Order, restricting the rent payable in respect of the property until the RSEO has been complied with.

Takeaways

The implications of these forthcoming changes are significant, particularly for landlords of crofting estates where statutory constraints severely limit the sale of properties and the ability to vary leases. With the change only 18 months away, now is the time for rural landlords to assess the risk they may be exposed to and seek professional advice as to how that may be mitigated.

How we can help

If you’re affected by the upcoming changes to the Repairing Standard or need guidance on rural tenancy obligations, our team of rural law specialists are able to help. Get in touch here for practical, strategic advice tailored to your circumstances or contact Robin Beattie (Robin.Beattie@andersonstrathern.co.uk) directly if you have any questions on this topic.