Posted on Dec 20, 2017 in Land and Rural Business by Anne Miller
As of 1 December 2017 a wholesale reform of the private letting market has taken effect by way of the Private Housing (Tenancies)(Scotland) Act 2016
Short Assured Tenancies and Assured Tenancies can no longer be created after 1 December, and instead all new private tenancies will require to be created as Private Residential Tenancies (PRT).
The PRT is intended to be a simpler system - no pre-tenancy notices such as the AT5 are required, and a single Notice to Leave is prescribed to terminate for example - whether in fact that is the case remains to be seen. The Scottish Government has created a Model Tenancy Agreement containing the statutory terms and information required by the Act with the intention that landlords use this style as the basis for their own PRTs, and where a tenant is in rent arrears the landlord is able to refer a case for repossession to the First-tier Tribunal more quickly than under the current regime.
The PRT has a key difference to the commonly used Short Assured Tenancy as it has no termination date. The PRT can therefore only be brought to an end by a tenant’s notice on a minimum period of 28 days’ notice, or by a landlord’s Notice to Leave which requires to rely upon one of the 18 specified grounds of removal within the Act.
Importantly, the grounds for removal are split into two categories – mandatory and discretionary grounds (and also two grounds which are part mandatory and part discretionary). Where a ground is discretionary it will require the First-tier Tribunal to find that the ground is made out and also be persuaded that it is reasonable that an order for eviction should be granted. It is worth noting that it is a mandatory ground for removal if the landlord or lender intends to sell the property, or the landlord or family member intends to live in the property. There is also a notable difference in respect of the rent arrears provisions - it is a mandatory ground of removal if the tenant is in arrears of more than one month’s rent for a period of three months; it is also a discretionary ground for removal if there are rent arrears of any amount for more than three months.
Existing Short Assured Tenancies:
Existing Short Assured Tenancies (SAT) continue as SATs after 1 December 2017. If they are contractually extended, for example by way of a month to month rolling provision at the termination date, then they also continue as a Short Assured Tenancy until they are terminated. However, a tenant and landlord under an existing SAT can agree that the tenancy be converted to a PRT.
New Private Residential Tenancies & Prescribed Information:
For new lettings taking place after 1 December a PRT requires to be put in place.
The Act also requires that certain prescribed information is provided to the tenant on the day the PRT comes into place.
Failure to provide either the terms of a PRT or the prescribed information to the tenant has significant penalties under the Act of up to 3 months’ rent for failure to provide either terms or the information, or up to 6 months’ rent for a failure to provide both terms and the information.
This is particularly relevant where an existing SAT has converted to a PRT. The terms and information under the Act must be provided within 28 days of that conversion, and that should be borne in mind by landlords to avoid any liability.
1 December was also a significant date for court cases involving private lettings. All actions relating to private lettings now (either SATs or PRTs) require to be submitted to the First-tier Tribunal for Scotland (Housing and Property Chamber) rather than the Sheriff Court.
Help and Advice:
The changes to the private letting landscape are wide ranging and onerous for landlords. Our lettings team are able to provide advice in setting up new tenancies and complying with the regime. If you require any advice regarding the new regime or your private residential lettings please don’t hesitate to contact our lettings team.
Anne Miller advises landlord clients on tenancy agreements. If you have any question about tenancy agreements or for more information, contact Annelon 01382 229111.