Section24:     Restriction on variation of tenancy

45. This section limits the way in which changes to a Scottish secure tenancy can be made. Rents and other charges can be varied in accordance with section25 and terms and conditions can be varied by court order under section26, but otherwise the terms of the tenancy can only be changed by written agreement between the landlord and tenant, in line with the Requirements of Writing (Scotland) Act 1995 (which sets out provisions relating to the signing of contracts).

Section25:     Increase in rent or charges

46. This section requires landlords to give each tenant not less than four weeks notice, in writing, before increasing rents or other charges. Where a landlord proposes to increase rents generally, it must first consult those tenants who would be affected.

Section26:     Variation of tenancy by court order

47. This section allows either a landlord or a tenant to apply for a court order to change a term of Scottish secure tenancy where there is a dispute on a variation in terms. The grounds on which a tenant can seek a change are set out in subsection(2).

48. The court has power to make any change in a term of a tenancy, apart from the level of rent or charge, that it considers reasonable having particular regard to safety considerations or likelihood of damage to the house. The court can require the tenant to pay compensation to the landlord for any financial loss arising from the variation, and to consult anyone who might be affected by the proposed change.

Sections27 to 31 and schedules 4 and 5:     Repairs and improvements

49. Taken together, these provisions set out the rights and responsibilities of the landlord and tenant under a Scottish secure tenancy with respect to repairs and improvements to the house.

Section27:     Repairs

50. This section, with schedule 4, puts the landlord under an obligation to ensure that the house is kept wind and watertight and reasonably fit for human habitation. It enables the tenant to have essential repairs done within a maximum time-scale, in line with regulations made by the Scottish Ministers. Secure tenants currently have this right under the Secure Tenants (Right to Repair) (Scotland) Regulations 1994 (SI1994/1046). It also requires the landlord, before the tenancy begins, to inspect the house and identify any work necessary to ensure that the house is wind and watertight and in all other respects reasonable fit for human habitation and to notify the tenant of any such work. The landlord must also carry out any necessary work within a reasonable timescale and make good any damage caused in carrying out the work. The landlord or someone authorised by the landlord can also enter the tenant's home on 24 hours notice to inspect the house and carry out any necessary work.

Section28:     Landlord's consent to work

51. This section and Part1 of schedule5 require a tenant to get the written consent of the landlord to undertaking any work, other than interior decoration, on a house. The landlord must not unreasonably withhold its consent, but can set any reasonable conditions with respect to the work, including any standards that the work must meet. The Scottish Ministers may give guidance to landlords on such conditions or standards of work. Part1 of schedule5 includes provision for a tenant to appeal against either a refusal by a landlord to allow a tenant to undertake work, or against a particular condition imposed by the landlord.

Section29:     Reimbursement of cost of work

52. This section applies when a Scottish secure tenancy comes to an end. Where a tenant has carried out improvement work to the house, with the consent of the landlord, the landlord can make a payment to the tenant, or his representative, up to the cost of the improvement work, after deducting the amount of any grant paid by a local authority through a repairs or improvements grant (a "grant paid or payable under PartXIII of the 1987 Act").

Section30:     Right to compensation for improvements

53. This section sets out the detailed arrangements to support a tenant's entitlement under the right to compensation for improvement. Where the tenant has carried out certain improvement works with the consent of the landlord they are entitled to be compensated for the cost of those works when the tenancy comes to an end. The Scottish Ministers can make regulations prescribing:

• those works which qualify for compensation;

• certain circumstances in which compensation is not payable;

• minimum and maximum levels of compensation;

• the procedures to be followed, and the factors to be taken into account, when claiming for or determining compensation.

54. Regulations in respect of these matters already exist for secure tenancies in the Secure Tenants (Compensation for Improvements) (Scotland) Regulations 1994 (SI1994/632).

Section31:     Effect of work on rent

55. This section prevents a landlord increasing the rent of a tenant, the successor to the tenancy or the successor's spouse or cohabitee to reflect any increase in the value or amenities of the house arising from improvement works undertaken and agreed with the landlord by that tenant.

Section32:     Assignation, subletting etc.

56. This section entitles a tenant to assign or sublet their house or to take in a lodger with the consent of the landlord. In the case of an assignation, the house must have been the assignee's only or principal home for 6 months prior to application for consent to assign. The landlord's consent may only be withheld if there are reasonable grounds to do so; subsection(3) sets out examples of what such grounds might be. Those grounds can be modified by the Scottish Ministers by order. Part 2 of schedule 5 provides, among other things, a right of appeal to the court by a tenant whose landlord refuses consent. Where the landlord is a registered social landlord which is a co-operative housing association any consent is subject to the condition that assignee, subtenant, or other person is a member of the association when the assignation or sublease takes effect or when possession is given to the other person.

Section33:     Exchange of house

57. This section provides a tenant with a right to exchange their house with another tenant, providing that both tenants are Scottish secure tenants and that the landlords of both tenants have given their consent. Such consent may only be refused if there are reasonable grounds to do so; subsection(3) sets out examples of what such grounds might be. Those grounds can be modified by order of the Scottish Ministers. Part2 of schedule5 provides, among other things, a right of appeal to the court by a tenant whose landlord refuses consent. Where the landlord is a registered social landlord which is a co-operative housing association any consent is subject to the condition that the tenant of the other house is a member of the association when the exchange takes effect.

Section34:     Short Scottish secure tenancies

58. This section and schedule6 set out the arrangements for a new short form of tenancy in the social rented sector to be called a short Scottish secure tenancy. Subsection(1) sets out the basic conditions for this type of tenancy to apply, and requires the serving of a notice by the landlord on the prospective tenant that this type of tenancy will be offered. Schedule6 sets out a range of circumstances in which a landlord can offer a short tenancy: these include where prospective tenants have previously been evicted for anti-social behaviour; where prospective tenants or others who will reside with the tenant have had an anti-social behaviour order taken out against them; temporary lettings; and properties leased by the landlord from another body. The Scottish Ministers under subsection(3) may modify this list by order. Subsection(7) requires landlords to provide such housing support services as it considers appropriate to enable the tenancy to convert to a Scottish secure tenancy and subsection(8) enables Scottish Ministers to issue guidance as to the housing support services which are appropriate.

59. A short Scottish secure tenancy will be for a term of not less than 6months and on its expiry may continue by tacit relocation (i.e. it will automatically be renewed for the same length of time), or by express agreement between landlord and tenant. Subsection(6) sets out the terms of a short Scottish secure tenancy and indicates that terms of a Scottish secure tenancy will apply with the exception of section 11(2) and (4) (which apply to existing tenancies which become Scottish secure tenancies); schedule1 (tenancies which cannot be Scottish secure tenancies);section 12 (relating to termination of tenancy); and succession rights under section22 and schedule 3. As a short Scottish secure tenancy is not included in the definition of a Scottish secure tenancy (section 111), the right to buy provisions do not apply to it. Provisions relating to tenant participation apply by virtue of sections 53 and 54.

Section 35:     Conversion to short Scottish secure tenancy

60. This section entitles a landlord to serve a notice converting a Scottish secure tenancy to a short Scottish secure tenancy where an anti-social behaviour order has been taken out against the tenant or a member of the tenant's household. The notice must specify the tenant or other person who is subject to the anti-social behaviour order.

61. Subsection(5) gives a tenant a right of recourse to the court where the tenant is aggrieved by a landlord converting a Scottish secure tenancy to a short Scottish secure tenancy. Where the court finds in favour of the tenant it can effectively reinstate the Scottish secure tenancy .

Section36:     Recovery of possession

62. This section sets out the arrangements under which a landlord may recover possession of a short Scottish secure tenancy. Subsections(2) to (4) set out the arrangements in more detail including the service of a notice and raising of proceedings. Subsection(5) outlines the circumstances when a court must make an order for recovery of possession: where the tenancy has reached its term, tacit relocation is not operating (i.e. it will not be automatically renewed for the same length of time) and no further contractual tenancy has been entered into, and where a notice has been served.

Section37:     Conversion to Scottish secure tenancy

63. Where a tenant has been granted a short Scottish secure tenancy because they have previously been evicted from a tenancy for anti-social behaviour or because an anti-social behaviour order has been taken out against the tenant or one of the tenant's household this section provides for the automatic conversion of the short tenancy to a full Scottish secure tenancy after a period of 12months, unless the landlord has served a notice to quit on the tenant. Subsections(2) and (3) make further provisions for cases where a landlord has served such a notice to quit. There is no such automatic conversion for tenants who have been granted a short tenancy on other grounds.

Section38:     Appeals

64. This provision establishes a right of appeal to the courts against a decision of a landlord not to offer either a Scottish secure tenancy or a short Scottish secure tenancy.

Section39:     Application of sections23 to 33 to other tenancies

65. This section applies the rights and obligations of the Scottish secure tenancy to a tenancy which would be a Scottish secure tenancy if it were not tied accommodation or part of a building which is primarily for non-housing use. The key provisions of the Scottish secure tenancy which do not apply to such tenancies relate to termination of the tenancy and repossession of the house; to joint tenancies; to succession rights; to the right to buy; and to the tenant participation provisions.

Sections40 and 41:     Notices and interpretation of Chapter 1

66. These sections clarify what is meant by certain terms used in this Chapter of the Act.

CHAPTER 2 - RIGHT TO BUY

67. This Chapter amends existing provisions on right to buy in the 1987 Act and inserts some new provisions. In general, tenants who currently have the right to buy will continue to do so on existing terms until their tenancy comes to an end. However the rent to mortgage scheme, lender of last resort and fixed price option provisions are repealed, although transitional provisions allow for protection for those currently benefiting from those provisions. The Chapter extends the right to buy to all tenants with a Scottish secure tenancy subject to a number of exemptions in certain specified circumstances. Tenants who did not previously have the right to buy, and all tenants entering into new tenancies, will have the right to buy on the revised terms provided for in this Chapter.

Section42:     The qualifying conditions

68. The amendment made by subsection(1)(a) ensures that a tenant's right to buy is preserved if there is a change in their landlord or the status of their landlord after the tenancy is granted.

69. Before being entitled to exercise their right to buy a tenant has to have lived in accommodation rented from a relevant landlord for a certain period of time. That period is currently 2years; subsection1(b) extends that to 5years.

70. Subsection (2) further amends the existing provisions to require tenants to have been in continuous occupation of the property during the qualifying period. However, subsection (2)(c) allows for this requirement to be disregarded for circumstances outwith the control of the tenant, subject to the discretion of the landlord.

Section43:     Exemptions from right to buy

71. This section amends the range of circumstances under which the right to buy cannot be exercised.

72. Subsection(2) repeals the existing provisions relating to specialist and group housing. These are replaced by a single exemption at subsection(6) for groups of houses designed for persons with special needs with or situated near special facilities, or where tenants are in receipt of housing support. Subsection(2) also ends the current exemption under section61(4)(b) of the 1987 Act for registered housing associations which have not received public subsidy.

73. Subsection (4) confirms the exemption from right to buy of properties which are part of a co-operative housing association and subsection(5) amends the exemption for some charitable housing associations. Any registered social landlord which is a Scottish charity on the date when the Housing (Scotland) Act 2001 received Royal Assent will be exempt from the right to buy.

Section44:     Limitation on right to buy: registered social landlords

74. This section inserts a new section 61A into the 1987 Act suspending the right to buy for tenants of a registered social landlord. This is intended to ensure that registered social landlords have time to adjust to the new arrangements. Subsection(3) of the new section sets a time period for this suspension of 10years from the date on which the tenancies of the landlord must be Scottish secure tenancies by virtue of an order under section 11(1).

75. Subsection(4) of the new section gives powers to the Scottish Ministers to extend this suspension for a further period or periods as they see fit, subject to a maximum of 10years for each further period. Subsections(7) to (9) set out the arrangements whereby registered social landlords can end this suspension on a voluntary basis.

76. Subsection(2) of the new section sets out the tenancies which are not included in this suspension. These are tenancies:

• of properties acquired by the landlord after the date when the landlord becomes subject to the Act's provisions on Scottish secure tenancies by virtue of an order under section11(1);

• of properties built after that date where a grant was offered to the landlord;

77. There is a power for the Scottish Ministers to specify further exemptions by order.

Section45:     Limitation on right to buy: pressured areas

78. This section inserts two new sections into the 1987 Act. The new section61B allows the Scottish Ministers to designate particular areas as pressured areas for a period of up to 5years. Any tenancy granted in a pressured area since the introduction of the Scottish secure tenancy or which did not previously have the right to buy, is exempt from the right to buy for the period of the designation.

79. Subsection(1) of the new section specifies that before being designated as pressured an area must meet two criteria: first, the availability of housing provided by the local authority or registered social landlords must be, or be likely to be, substantially less than the need in that area, and second, the exercise of the right to buy in that area must be likely to make that shortage worse. Subsections(8) and (9) provide for a designation to be amended or revoked by the Scottish Ministers; and to be extended for a further period or periods of up to 5years each.

80. The new section61C sets out the procedure for designating a pressured area: the proposal must be put forward by a local authority (see section61B(1)) after local consultation, and the Scottish Ministers can set out in guidance the form of the proposal and the information it should include.

Section46:     Limitation on right to buy: arrears of rent, council tax, etc.

81. This section inserts two new provisions into the 1987 Act. Subsection (1) inserts section 61D which entitles the landlord to refuse an application under the right to buy from a tenant or joint purchaser who has arrears of rent or other charges, of council tax, or of water and sewerage charges. Slightly different provisions apply in each of these three cases to reflect the differences in the bodies to which the arrears may be due.

82. Subsection (2) amends section63 of the 1987 Act to require a tenant of a registered social landlord who has applied to exercise their right to buy to provide a certificate from the local authority stating whether or not they have any arrears of council tax or water or sewerage charge, and if so the amount of these arrears. The local authority is required to issue such a certificate free of charge and within a specified time.

Section47:     Limitation on right to buy: conduct

83. This section inserts a new section 61E into the 1987 Act which suspends the right to buy from any person whose house is being repossessed on one of the conduct grounds in paragraphs1 to 7 of schedule2 to the Act.

Section 48:     Houses liable to demolition

84. This section inserts a new section into the 1987 Act. It provides the conditions and procedures required for a landlord to apply to Ministers for their consent for the landlord to refuse an application to buy on the grounds that the property is liable to demolition. Before granting such consent, Ministers will have regard in particular to how long before the landlord intends to demolish the house, and to what extent before deciding to demolish the landlord consulted the tenant about the proposal to demolish, and the effect of the proposal on the tenant's ability to exercise the right to buy.

Section49:     Discounts

85. Section62 of the Housing (Scotland) Act 1987 sets out provisions for calculating the price at which a property should be sold under the right to buy. This sectionamends those provisions in the following ways for new Scottish secure tenants. (The existing provisions will continue to apply to tenants who currently have the right to buy by virtue of an order made under section11(1)).

86. Subsection(2) changes the level of discount to be applied to the market value of the house. It removes the distinction between houses and flats. It sets a new minimum discount of 20% for all those with a 5year eligibility period. It sets a single rate at which the level of discount increases from the minimum, of 1% of the market value for every year beyond 5years that the tenant has occupied a house let by a relevant landlord. It reduces the maximum level of discount from 60% of the market value of the house to 35% or £15,000, whichever is the less.

87. In calculating a discount, section62 of the 1987 Act requires account to be taken of any previous discounts received by the applicant(s). Subsection(4) inserts a new provision in section 62 making clear that a previous discount received by two or more persons jointly should be deemed to have been received in equal proportions.

88. Subsection(3) broadens the definition of appropriate persons for calculation purposes of any previous discount to be deducted from discount entitlement. The definition in section 62(4)(a)(i) to (iv) of the 1987 Act refers to the tenant, the tenant's spouse, or joint tenant. These will now reflect cohabitees of either sex, by virtue of section108. Subsection(5) makes technical changes consequential to the changes made by subsections(2) and (3).

89. Subsections(6), (7) and (8) allow the Scottish Ministers to vary the discount rates and set different discount regimes, including different caps, in different areas of the country by order.

Section50:     Assistance to tenants to obtain other accommodation

90. This section amends section66 of the Housing (Scotland) Act 1988 to allow a local authority (with the approval of the Scottish Ministers) to establish a grant scheme to enable Scottish secure tenants of councils and registered social landlords to buy or extend a house, or to buy land and build a house. That sectionalready allows such a scheme to include provisions for determining which tenants could qualify for grant assistance; subsection(3) inserts a new subsection to make clear that such provisions may in particular specify tenants in pressured areas as qualifying tenants. Subsection(2) extends the scope of these schemes so that grants can be paid to tenants of registered social landlords.

Section51:     Right to buy: miscellaneous repeals

91. This section abolishes the rent to loan scheme and removes the duty of the local authority to act as lender of last resort to tenants who wish to exercise the right to buy but are unable to raise the necessary finance elsewhere. The repeal of section69(1A) removes the cut-off date which currently limits the scope for refusing the right to buy for certain houses provided for elderly persons and first let before 1January 1990. A landlord subject to the right to buy can apply to the Scottish Ministers to refuse an application under the right to buy for any house which has been designed or adapted for special needs purposes.

Section 52:     Reports on right to buy

92. This section places a duty on Scottish Ministers to provide reports on the effects and take-up of the right to buy.

CHAPTER 3 - TENANT PARTICIPATION

Section53:     Tenant participation

93. This section requires local authorities and registered social landlords to have tenant participation strategies in place as directed by the Scottish Ministers. It also places a duty on them to maintain a register of tenants groups meeting certain criteria. Subsection (4) entitles Scottish Ministers to make an order setting out the criteria for registration or removal from the register and the procedures to be followed in relation to such registration and removal and subsection (5) provides a right of appeal for such groups in relation to registration and deregistration.

Section54:     Consultation with tenants and registered tenant organisations

94. This section enables both individual tenants and registered tenants groups to be consulted by the landlord on issues affecting them. Subsection(1) requires the landlord to have regard to representations by tenants or tenants groups, made within a reasonable timescale. Subsection(2) sets out the relevant proposals to which this applies.

Section55:     Tenant management agreements

95. This section replaces the existing provisions of sections22 and 22A of the 1987 Act and sets out arrangements for a tenant management co-operative to enter into an agreement with a local authority landlord, a registered social landlord or a water or sewerage authority to manage the landlord's houses. The Scottish Ministers must approve such management bodies and the terms of the agreement between the landlord and the co-operative. There is a right of appeal to Ministers in the case of an inability to agree terms or a refusal by the landlord to enter into an agreement.

Section56:     Tenant management agreements: further provision

96. This section defines the range of functions which a landlord may make subject to a tenant management agreement. Subsections (4) and (5) make clear that a local authority's houses which are the subject of a tenant management agreement are still to be treated as the authority's houses for the purposes of the authority's Housing Revenue Account and related financial support from the Executive.

PART3 - REGULATION OF SOCIAL LANDLORDS

CHAPTER 1 - REGISTERED SOCIAL LANDLORDS

Section57:     The register of social landlords

97. This section places a duty on the Scottish Ministers to maintain an accessible register of social landlords. It also arranges for the transition from the current register of housing associations maintained by Scottish Homes to the new register. The new register will include all those bodies who are currently on the Scottish Homes register, whether they are registered by statute or under contract. The section also provides that Ministers must notify the bodies concerned at least one month before the change in registration arrangements occurs.

Section58:     Eligibility for registration

98. This section sets out the basic criteria for registration as a social landlord. A body is eligible if it is either an industrial and provident society or a registered company. In either case the body must have its registered office in Scotland. The body must not trade for profit, and must have housing as one of its objects, although it may be engaged in other activities as provided for in this section. The Scottish Ministers have the power to amend the permissible additional purposes, objects and powers by order, but any such changes will only affect bodies registered subsequently.

Section59:     Registration

99. This section gives the Scottish Ministers the power to register as a social landlord any body which is eligible and to determine the way in which such application must be made. Ministers can charge for registration. Ministers must also inform the Financial Services Authority when an industrial and provident society is registered with them.

Section60:     Removal from the register

100. This section sets out the circumstances in which the Scottish Ministers may remove a body which is on the register of social landlords, and the process for so doing. The criteria for removal are that the body is no longer eligible for registration, has ceased to exist or does not operate, or otherwise meets the criteria for removal from the register established by Ministers under section61. Ministers must give the body at least 14days notice before removing it from the register.

Section61:     Criteria for registration or removal from register

101. This section places a duty on the Scottish Ministers to establish and publish criteria for registration as a social landlord or for removal from the register. Ministers must have regard to these criteria when deciding whether or not to register or de-register a body, and before establishing or varying any criteria they must consult bodies representing registered social landlords and bodies representing tenants of registered social landlords.