Professor Douglas Robertson

Key to the Scottish Government’s reform of private tenancies under the Private Housing (Tenancies) (Scotland) Act 2016 was to enhance private tenants’ rights. The Private Residential Tenancy (PRT) was explicitly designed to rebalance power relations between landlords and tenants. Tenants would receive an ‘open-ended’ tenancy, rather than the six months available through the previous Short Assured Tenancy regime, thus delivering a more secure tenancy. In addition, through having this enhanced security tenants would then be in better place to assert their rights. These rights included renting a property which meets a basic quality standard, the Repairing Standard set way back in 2006, which also covers critical safety issues, having any necessary repairs works carried out, and being able to challenge an unfair rent rise.

This new tenancy introduced a modern tenancy agreement, similar to those employed across Europe, with the rights and responsibilities of both parties clearly detailed. Seven years on from its implementation the RentBetter research still shows that the vast majority of tenants are quite oblivious of their tenancy rights, whereas most landlords and their agents are now well-versed in these new arrangements.

Throughout the five years RentBetter has studied the PRS it has consistently reported that the newly devised formal route to secure justice still lacks visibility amongst most tenants. The First Tier Tribunal (Housing and Property Chamber), which also came into being in 2016, is just not on their radar. For the small number of tenants that have used it to adjudicate, the common criticism was that the Tribunal proved to be a lengthy process which often produced a decision which was either not in their favour, or the remedies did not go far enough. Landlords, or perhaps more accurately their letting agents, whilst more knowledgeable and supportive, also voiced some frustrations and at times despair largely at the time taken by the Tribunal to conclude a case given for them the rent loss clock was still ticking.

These negative experiences in seeking justice partly tie back to the Tribunal’s legal heritage. It was initially promoted as not being like a court. Yet, its remit and day-to-day practices are perceived to be very formal, just like a court. That is because the reality is the Tribunal is a court. So as previously noted, landlords and agents tend to ‘lawyer up’ (or at least ‘letting agent up’) while tenants don’t tend to have formal advocates. This results in an imbalance or bias when tenants seek justice or wish to defend themselves. The simplest way to address this would be to find better ways to support tenants engage with it, after first making them aware of what it could actually do for them. That responsibility should lie with the Tribunal in terms of reach out to and explain their work to tenants as well as examining its current working practices and how it engages with tenants as a whole. Local authorities and advice centres also need to better engage with the Tribunal to enhance knowledge and understanding of how best to resolve an injustice.

That said any piece of legislative reform needs right from the start to be linked to a wider implementation package that allows tenants to know and then be supported to exercise these new rights. This can only be achieved through supporting tenants to access advice and support to ensure legal redress becomes both accessible and understandable. Further, there also needs to be proper resourcing by local authorities to engage in pro-active enforcement.

These power disparities within the current Tribunal setting are but one issue regarding better access to justice for tenants within the PRS. Earlier Waves of the RentBetter research have documented the fact that tenants still feel they have much to lose if they formally raise their concerns with their landlord. Rather they would prefer to raise any concerns and complaints informally, or in many cases not at all. As noted previously there was a general assumption on their part that the landlord, and the ‘system’ as a whole, would ‘do right’ by tenants. People made it very clear they were averse to pursuing formal routes to justice. But for this approach to work tenants needed to establish and maintain a positive and trusting relationship with their landlord.

However, this final Wave of the RentBetter study reveals that a change is currently occurring right across the sector which might break down this approach. Both the Landlord and Tenant Surveys reveal a steady growth in the number of PRS properties now being managed by agents. The smaller ‘cottage industry’ landlords are either exiting the sector or passing the day-to-day management onto agents. The research has also shown that tenant satisfaction with letting agents has also improved perhaps reflecting the finding that agents were far more conversant with the provisions of the PRT than landlords. A more professionalised PRS would appear to be? emerging, which was after all one of the stated ambitions of the 2016 legislation. Establishing the Letting Agent Code of Practice to improve the day-to-day working practices of agents would also appear to have contributed to this change.

With this shift from a sector once dominated by amateur ‘cottage industry’ landlords to one managed largely by professional agents the tenant and housing provider relationship becomes transactional, rather than one predicated on deference towards the landlord. If this change does happen then perhaps over time the more formalised route to justice may also become a norm, resulting in the Tribunal taking on a more central role in determining justice, rather than the peripheral one it currently holds.

One unintended consequence of more tenants renting through letting agents is, however, that they are more likely to experience more regular rent rises when compared to those renting directly from landlords. This change in rental practice is discussed further here as are its implications for affordability.

Over its five-year duration the RentBetter study has consistently recorded that the vast majority of private renters do not want to be there – they feel ‘stuck’. Perhaps this partly explains why they don’t complain, and don’t seek to change matters as they don’t expect to be renting privately in the long term. It is also aligned to lack of choice – even if a tenant can’t access social housing, or ownership, the increases in rental prices around them generates fear of potentially having to pay higher rents if they have to leave, therefore better not to ‘rock the boat’ and to sit tight. However, recent economic events and public finance consequences mean that the prospect of securing their preferred housing alternative, whether social renting or owner-occupation may have now become ever more distant. If private renting becomes a more permanent housing option for many people perhaps this attitude might also need to shift.

The private rented market is clearly in a state of flux and there is no predicting just exactly how this will play out. The hoped for rebalancing of power between tenants and landlords was always a tough ask given the supremacy of property rights within the UK – the market it seems, in the face of shortages, is still all powerful. That said, it appears that the formalised legal means of redress have stalled somewhat. However, the increasing professionalisation of private rental management might result in a shift in how tenants seek to resolve problems in the future. A contractual relationship rather than a personal one might allow some realignment of these power dynamics. But as matters stand accessing justice within the PRS is still very much a work in progress.

• Professor Douglas Robertson was the chair of the Scottish Government Advisory Group between 2009 and 2015 that made recommendations for reform and now sits of the RentBetter Advisory Group

His previous blogs are available here and here.

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