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Make your Tenancy agreement

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Know your local rental market

Once you’ve bought your property, it’s a good idea to research the rental market and types of tenants attracted to the area. This will help you decide whether the property should be furnished, part-furnished or unfurnished and how much rent to charge.

What kind of letting arrangement should I use?

All landlords must provide their tenants with the written terms of their letting arrangement. Since December 2017, all newly created letting arrangements in Scotland must be governed by a private residential tenancy.

A private residential tenancy is open-ended. This means that there is no end date to the tenancy (ie no 'fixed term'). It lasts until a landlord evicts the tenant for a specific legal reason, such as rent arrears or an intention to refurbish or sell, or if the tenant wants to leave.

If you set out your terms of tenancy in an old form tenancy agreement (such as an assured or short assured tenancy) not all of the terms will be enforceable, and your tenant will still benefit from the protections and requirements set out in the Private Housing (Tenancies) (Scotland) Act 2016. These include the right to rent receipts and restrictions on rent increases.

If you currently have an assured or short assured tenancy in place, you’ll need to switch to a private residential tenancy once it expires.

How will the property be managed?

You can either manage the property yourself or use a letting agent. A letting agent will deal with the property and tenant on your behalf, and should also help you meet your legal obligations as a landlord.

Before engaging a letting agent, key things to consider include:

  • that they are on the Register of Letting Agents

  • the level of service they offer

  • how frequently they inspect properties

  • how they deal with maintenance and repairs

  • their charges and fees

  • whether they are members of a professional body

  • their level of insurance and whether it includes client money protection

  • their reputation and how long it takes them to fill a property

Get yourself, and the property, ready to let

As a landlord, you’ll need to:

  • register with the local council for your property's area – a failure to do so is a criminal offence and can attract a fine of up to £50,000 – and renew registration every three years

  • get an HMO (house in multiple occupancy) licence if renting your property out to 3 or more unrelated tenants

  • let your mortgage lender know you intend to rent your property, and check your mortgage terms

  • get insurance that protects your property, your liability as a landlord and property owner, and rental income should anything go wrong with a tenant

Make sure your property meets all the required standards, including:

  • getting an Energy Performance Certificate (EPC)

  • carrying out a Legionella Risk Assessment

  • carrying out a pre-tenancy check of the property to ensure it meets the repairing standard (ie it is fit for human habitation, in a reasonable state of repair and in proper working order, and fitted out with fire and carbon monoxide alarms)

For more information, read Legal obligations of a landlord in Scotland.

Finally, prepare the necessary paperwork, ie the tenancy agreement and communication agreement, and also an Inventory if the property is furnished or part-furnished. 

For more information, read Renting out property in Scotland.


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