From 1 December 2017 the private rented sector in Scotland is changing. Landlords will no-longer be able to create Short Assured Tenancies (SATs), instead the new default residential tenancy will be the Private Residential Tenancy (PRT).
Existing SATs will not be affected, and may continue to run as before. However, upon renewal or change of tenancy a PRT will be created.
What’s different about a PRT?
Experienced landlords will find there is a lot that is familiar about the new PRT. On a day to day basis many of the obligations and responsibilities of landlords and tenants remain unchanged. However, there are some distinct and very important differenced.
The key features of the new tenancy are:
- Tenancies will have no end date.
- Statutory terms are mandatory
- There will be no ‘no-fault’ possession procedure
- Termination of a tenancy can only be effected in accordance with specific provisions made by the Private Housing (Tenancies) (Scotland) Act 2016.
In order for a PRT to be created, the tenancy must have started on or after 1 December 2017, the tenant(s) must be an individual, and the property must be used as their principal home.
Additionally the tenancy must not be of a type excluded from constituting a PRT by the2016 Act, for instance types of agricultural tenancy.
A PRT Agreement must include:
- The agreement must be in writing, signed by the parties.
- It must state the start date of the tenancy
- It must state the statutory terms contained within the Private Residential Tenancies (Statutory Terms) (Scotland) Regulations 2017.
- State the amount of rent due and when it should be paid.
- Say who is responsible for decoration and repairs to the inside and outside of the property.
- State if there are any conditions or restrictions to the use of the property.
- Mention the responsibilities of the tenant, such as insuring their own personal belongings.
An NLA approved PRT will be made available in the forms sections of landlords.org.uk.
Written terms of tenancy must be provided to the Tenant(s) on the day the tenancy commences.
In addition to a written agreement, landlords in Scotland must provide certain prescribed information.
Landlords using a bespoke agreement, such as the NLA’s approved PRT must supply a copy of the ‘Private Residential Tenancy Statutory Terms Supporting Notes’.
Those who opt to use the Scottish Government’s model tenancy agreement must serve the tenant with a different document, the ‘Easy Read Notes for the Scottish Government Model Private Residential Tenancy Agreement’.
If a landlord fails to provide a valid written tenancy agreement and/or the associated supporting documents the tenant may apply to the First Tier Tribunal for redress – potentially amounting to a financial penalty of up to six months’ rent.
What about ending a PRT?
This is where the PRT really departs from the norms we are used to in relation to the SAT. As PRTs have no end date and there is no replacement for s33, and as such no ‘no-fault’ procedure, options for terminating tenancies are more limited.
In fact there are only three circumstances whereby a tenancy can be terminated:
- By the Tenant. In these circumstances the Tenant must provide 28 days’ notice to leave (or such other period as agreed between the parties in writing).
- Consensual Termination. In these circumstances, the Landlord must serve a Notice to Leave giving either 28 or 84 days’ notice (whichever is applicable) and placing reliance on an eviction ground contained within schedule 3 to the Private Housing (Tenancies) (Scotland) Act 2016. Thereafter, the Tenant must vacate voluntarily.
- Eviction Order. In these circumstances, the Landlord must serve a Notice to Leave giving either 28 or 84 days’ notice and placing reliance on an eviction ground contained within schedule 3 to the Private Housing (Tenancies) (Scotland) Act 2016.
If the Tenant fails to leave the Landlord can apply to the First-tier Tribunal (Housing and Property Chamber) for an eviction order.
What are the grounds for regaining possession?
In total there are 18 grounds for evictions, eight are mandatory meaning that the Tribunal must grant possession.
Eight are discretionary, meaning that the Tribunal must use its own judgment to decide whether to grant an order or not.
Two are ‘mixed’, meaning that they may be mandatory or discretionary depending on the circumstances.
The Mandatory Grounds are:
- Landlord intends to sell
- Property to be sold by lender
- Landlord intends to refurbish
- Landlord intends to live in property
- Landlord intends to use for non-residential purposes
- Property required for religious purposes
- Tenant not occupying let property
- Tenant has relevant conviction
The Discretionary Grounds are:
- Family member intends to live in property
- Tenant no longer in need of supported accommodation
- Breach of tenancy agreement
- Anti-social behaviour
- Association with person who has relevant conviction or engaged in relevant anti-social behaviour
- HMO licence has been revoked
- Overcrowding statutory notice served on landlord
The Mixed Grounds are:
- Tenant is not an employee, the tenancy was entered into on the basis that accommodation was to be provided with employment.
- Rent arrears.
Why is Rent Arrears no-longer Mandatory?
Rent arrears remains a mandatory ground for possession if:
- The tenant has owed rent for three or more consecutive months; and
- Owes at least one month’s rent at the start of the day on which the Tribunal first considers the case
However, it is only discretionary if rent is not owed for three consecutive months, or the tenant owes less than one month’s rent on day one of Tribunal proceedings.
Tribunal or Sheriff Court?
From the 1st December all possession cases will be heard by the First Tier Tribunal, not the Sherriff Court. This applies to existing SATs as well as newly created PRTs.
Any proceedings already underway should continue in the courts, while new proceedings will be the responsibility of the First Tier Tribunal – which replaces the Private Rented Housing Panel (PRHP)
To learn more about the changes and update your continued professional development (CPD) please see the NLA’s online library.