May 2016 – Private Residential Tenancies – Part 2

Author: Mitchells Roberton
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The Private Housing (Tenancies)(Scotland) Act 2016 (“the 2016 Act”) received Royal Assent last month. Not much of it is yet in force. But it makes sweeping changes to the law concerning private residential tenancies in Scotland. This Note outlines some of the key changes that are in the legislative pipeline and is supplementary to Bullet Point Update 4 for April which outlined some others (under headings as follows: the definition of a PRT (“private residential tenancy”); termination date & continuing rent not essential; statutory terms for PRTs; writing not essential for creation of PRTs; rent increases; Rent Pressure Zones; and no termination by agreement.)

The “old regime”  – “assured” and “short assured” tenancies 

As mentioned in the Bullet Point Update for last month (“Private residential tenancies – part 1”), before the 2016 Act the vast majority of private sector residential tenancies were “assured” tenancies under the Housing (Scotland) Act 1988. An important sub-group of such tenancies were “short assured” tenancies where – as the word “short” suggests – a landlord could get their property back without having to have any reason for doing so other than that they wanted it back. The assured/short assured tenancy regime is referred to below as “the old regime”.

The “new regime” –  the 2016 Act and “private residential tenancies” 

  • The 2016 Act sweeps away the scope for granting any new assured/short assured tenancies and replaces them with the “private residential tenancy” (“PRTs”) as defined in the 2016 Act. But, as mentioned above, the 2016 Act is not yet in force and probably won’t be so until next year. Meantime “assured” and “short assured” tenancies under the old regime can still be granted. It will only be after the relevant parts of the 2016 Act come into force that no new assured/short assured tenancies can be granted.
  • And, generally speaking, those tenancies that existed as assured/short assured tenancies before the date the 2016 Act comes into force will continue as such. 

One particular striking difference

  • As mentioned above, under the old regime a landlord of a property that was let under a short assured tenancy could, in principle, get their property back without having to have any reason for doing so  – other than that they wanted it back.
  • One of the most striking differences between the old regime and the new regime is that a landlord will only be able to get their property back if one of the grounds for doing so specified in the 2016 Act applies. And, in relation to certain of those grounds, the landlord getting their property back will depend on whether an official Tribunal agrees that they are entitled to do so.

VARIOUS KEY ASPECTS OF THE NEW REGIME 

This Note and its companion note for April are not intended to be comprehensive but pick out from the 2016 Act those elements that may be of particular interest.

Termination by tenant – or by landlord

  1. In general, a tenant may bring a PRT to an end on 28 days’ notice. Where termination is instigated by the landlord there is scope for consensual termination in that where the tenant has received a notice to leave from the landlord and moves out without requiring the landlord to obtain an eviction order, the PRT comes to an end on the later of either the day specified in the notice to leave or the day the tenant ceases to occupy the property. Subject only to that, the landlord must get an eviction order from the First-tier Tribunal.

Landlord application for eviction orders from First-tier Tribunal

  1. The First-tier Tribunal is to issue an eviction order if it finds that one (or more) of the statutorily prescribed “eviction grounds” applies. In relation to some of these eviction grounds the Tribunal must find that the ground applies – if certain prescribed facts pertain (“the Must Eviction Grounds”). In relation to other eviction grounds the Tribunal may find a ground applies – if certain prescribed facts pertain (“the May Eviction Grounds”). This is perhaps best illustrated by one example of each alternative.
  1. One of the Must Eviction Grounds is where the landlord intends to sell the let property. The Tribunal must find that the ground applies if (a) the landlord is entitled to sell the property, and (b) intends to sell it for market value within 3 months of the tenant moving out.
  1. One of the May Eviction Grounds is where a member of the landlord’s family intends to live in the property. In this case, the Tribunal may find this ground applies if (a) such family member intends to occupy the let property as their home for at least three months, and (b) the Tribunal is satisfied that it is reasonable to issue an eviction order on account of that fact.
  1. An indication of the nature of these various grounds is shown in the table below. In each case the Act prescribes in some detail the precise circumstances in which the ground in question is to be made out and the Act prescribes that: “the circumstances in which the Tribunal may or must find that an eviction order applies are exhaustive of the circumstances in which the Tribunal is entitled to find that the ground in question applies.”
Must Eviction Grounds May Eviction Grounds
Landlord intends to sell Family member of landlord intends to live in the let property
Property to be sold by lender Tenant no longer in need of supported accommodation
Landlord intends to refurbish Breach of tenancy agreement by tenant
Landlord intends to live in the let property Anti-social behaviour
Landlord intends to use for non-residential purposes Association with person who has relevant conviction or engaged in anti-social behaviour
Property required for religious purposes Landlord has ceased to be registered under Anti-Social Behaviour etc (Scotland) Act 2004
Tenant not an employee HMO licence has been revoked
Tenant not occupying let property Over-crowing statutory notice
Rent arrears
Criminal behaviour
  1. An application for an eviction order against a tenant must be accompanied by a copy of the “notice to leave” which has been given to the tenant and that “notice to leave” must specify the ground on which an eviction order is sought. The form of a “notice to leave” is, in part, set out in the Act and will be supplemented by regulations which have yet to be published.
  1. A landlord cannot make an application to the Tribunal for an eviction order until the expiry of the relevant notice period in relation to the notice to leave. In general, the relevant notice periods are 28 days if the tenant has been entitled to occupy the property for six months or less, or 84 days if the tenant has been entitled to occupy the property for more than six months.

Death of the tenant 

  1. If one of two or more joint tenants dies then the deceased’s interest as a tenant is extinguished on their death. If a sole tenant dies the PRT only comes to an end if no-one then inherits the tenancy under the Act.
  1. Under the Act, subject to various conditions, the deceased tenant’s “bereaved partner” may inherit or a member of the tenant’s family may inherit or a resident carer may inherit. There are quite detailed provisions about the qualifications for inheriting the tenancy in this way. If no-one does inherit then the PRT comes to an end.
  1. Where on the death of a tenant of an old regime assured tenancy a person succeeds to the tenancy it then becomes a PRT under the 2016 Act.

Miscellaneous points 

  • Protection for sub-tenancies: One of the “statutory terms” for tenancies prescribed by the Act is that a tenant may not sublet the property without the written agreement of the landlord. But where such agreement is given (or is to be inferred) a sub-tenant with a PRT will be protected from eviction where his or her landlord‘s tenancy has been brought to an end. The sub-tenant then becomes the tenant under a new tenancy. On becoming the tenant, they retain the same tenancy terms as they had as a sub-tenant. This protection does not apply where the Tribunal disapplies it or where the tenancy of the person who was the landlord was brought to an end by an eviction order on certain of the available grounds (e.g. where the landlord intends to sell the property).
  • Joint landlords and joint tenants: unless otherwise stated in the Act (a) in a case where two or more persons jointly are the landlord under a tenancy, references in the Act to the landlord are to all of those persons, and (b) in a case where two or more persons jointly are the tenant under a tenancy, references in the Act to the tenant are to all of those persons.
  • Documents: Any errors in documents prescribed by legislation do not invalidate the document if they are sufficiently minor that they do not materially alter the effect of the document. There are a number of documents which the Act requires the use of at certain times. The hope is that a common sense approach can be taken to meeting these requirements, and a party is not penalised for an obviously minor error. The protection applies equally to landlords and tenants. 
  • First-tier Tribunal: The Tribunals (Scotland) Act 2014 creates two new tribunals – the First-tier Tribunal for Scotland and the Upper Tribunal for Scotland – to be known collectively as the Scottish Tribunals. The First-tier Tribunal will be organised into Chambers of similar subject matter to which devolved tribunals will be transferred. This will include the current Tribunals for housing – the Private Rented Housing Panel (PRHP) and the Home Owners Housing Panel (HOHP). Under the Housing (Scotland) Act 2014, civil private rented sector disputes between landlords and tenants relating to existing tenancy types are to be transferred from the Sheriff Court to the First-tier Tribunal, as well as redress for letting agent regulation, while the 2016 Act confers jurisdiction on the First-tier Tribunal in relation to private residential tenancies. All jurisdictions will become part of the Tribunal Housing and Property Chamber.

Note: This material is for information purposes only and does not constitute any form of advice or recommendation by us. You should not rely upon it in making any decisions or taking or refraining from taking any action. If you would like us to advise you on any of the matters covered in this material, please contact Euan David: euan@mitchells-roberton.co.uk

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