Key points concerning the new private residential tenancy ( PRT )

On December 1st 2017 the present assured and short assured tenancy will be replaced with a new tenancy regime hereafter referred to as a PRT. Our objective is to outline to you what this means for you as a landlord and should any points require additional clarification we would aim to be able to provide further specifics on request

Let us look at the main points in turn :

The Scottish Government has produced a model lease which contains two types of clauses.These are either Mandatory and must form part of the PRT or Discretionary and can either form part of the agreement or not . Please note , it is not compulsory to use the model tenancy agreement but all PRT leases must contain certain statutory terms.

The government is presently working on a digital interface to allow landlords to generate PRT leases online but this has not been finalised as yet. Once it has we will provide our landlords with a link.
Only one date is required on the lease – the START DATE. This is because the legislation does not permit the parties to specify a duration period for the lease , hence no actual end date. The tenancy can be terminated at any point after the start date by either party.
As at present the landlord may set the initial rent even if the property is located in what are to be termed Rent Pressure Zones of which more later.
Tenants must also be issued with guidance notes and there are 2 versions of these.
Version 1 – if a landlord uses the Scottish Governments model lease , they must give their tenants the easy read notes which provide a simple commentary on each of the mandatory terms and on any discretionary terms where the landlord has used the governments suggested wording.
Version 2 – where the model lease is not used a set of supporting notes must be provided. These only cover the statutory tenancy terms which landlords are required by law to include in any PRT lease.
Rent Increases.
The first increase can be carried out at any time after the start of the lease but thereafter the rent cannot be increased more frequently than once a year. The tenant has to be given three months notice of a rent increase in writing. If the tenant feels that the increase is too high they can ask a rent officer from the Housing & Property Chamber to set the rent. The rent Officer will set the rent at the Open Market level.
If a property is in one of these Rent Pressure Zones , Scottish Ministers will place a cap on rent increases but this must be at least 1% above the consumer prices index. Rent pressure zones or RPZ can be designated by the Scottish Government only in extreme circumstances where rents are rising to such a level that they are causing undue hardship to tenants and putting pressure on the local Authority to provide housing or subsidise the cost.
Ending the tenancy – if a tenant wants to leave they must give the landlord at least 28 days notice in writing. They can issue this at any point after the start date.
The landlord can only end a tenancy if one or more of 18 grounds for possession apply. These being :
1. Landlord intends to sell the property at market value within 3 months of tenant
leaving (mandatory)
2. Property is to be sold by mortgage lender (mandatory)
3. Landlord intends to refurbish which will entail significantly disruptive works and it will
be impracticable for the tenant to occupy the property during the work (mandatory)
4. Landlord intends to occupy the property as their principal home for at least 3 months
(mandatory)
5. Family member intends to occupy the property as their principal home for at least 3
months (discretionary)
6. Landlord intends to use property for non-residential purpose (mandatory)
7. Property required for religious purpose (mandatory)
8. Tenant is no longer an employee of landlord (mandatory if application made within 12
months of tenant ceasing to be employee)
9. Tenant is no longer in need of supported accommodation (discretionary)
10. Tenant is not occupying the property (mandatory)
11. Tenant has breached tenancy agreement (but not rent clauses) (discretionary)
12. Tenant has owed some rent for 3 consecutive months (mandatory if on day of tribunal
hearing tenant owes at least one months’ rent and arrears are not due to delay/failure
in benefit payment)
13. Tenant convicted of using property for immoral/illegal purpose or convicted of offence
committed at/near property (mandatory)
14. Tenant has acted in anti-social manner (discretionary)
15. Tenant associates with someone who has a criminal conviction or who has engaged in
anti-social behaviour (discretionary)
16. Landlord has been refused registration or had registration revoked (discretionary)
17. Landlord’s HMO licence has been revoked (discretionary)
18. Overcrowding statutory notice has been served on the landlord (discretionary)
The notice period for most of these is 28 days if a tenant has been entitled to occupy a property for 6 months or less. This increases to 84 days if a tenant has been entitled to occupy a property for more than 6 months.
Grounds 10 -15 require 28 days notice regardless of the duration of time a tenant has been entitled to occupy a property.
To end the tenancy the landlord must issue the tenant with a prescribed notice called a notice to leave and this must identify which of the grounds apply.
Eviction –
If a tenant does not leave when required to do so the landlord should apply to the HPC to have them evicted. Any such applications will be free of charge and landlords and tenants are expected to represents themselves at the chamber. The hearing will be run and determined by a panel comprising a solicitor who specialises in tenancy legislation and at least one property / housing expert. If the ground is mandatory then the tribunal has to issue an eviction order if the ground is proven.
If the ground is discretionary the tribunal will only issue an eviction order if it considers it reasonable to do so.
Exisiting tenancies – the new regime does not affect these provided that the fixed term is still running , these will continue under the old regime.
Please note ; Legal opinion had been divided on whether a short assured tenancy which is renewing on a contractual basis would become a PRT at the first contractual renewal after the new legislation is implemented. The Scottish Government has after consultation with the industry decided that tenancies of this sort will not become PRTs but rather will continue as short assured tenancies in perpetuity until termination by either party.
Further information will be issued to our landlords as it emerges especially connected to the wording of the various notices required when giving notice to leave / rent increases and so on.