Private Residential Tenancies – what the introduction of a new form of tenancy might mean for landlords

The Private Housing (Tenancies) (Scotland) Act 2016 arrived on the statute books on 22 April 2016. It introduces a new form of tenancy for the Scottish private residential sector – a "Private Residential Tenancy" (PRT), which is intended to replace the use of assured and short assured tenancies in Scotland.

Private Residential Tenancies Prt Landord Tenant Scotland Law

Implementation of the changes is not imminent – Scottish Ministers have the power under the 2016 Act to make regulations to prescribe certain terms which will be deemed to form part of every PRT, and these regulations will only be introduced following a period of consultation.

He we look at the new form of tenancy and some of its implications for landlords’ business and activities.

What is a PRT?

Once the relevant provisions of the Act have come into force, any new private sector tenancies which are created will be PRTs and cannot be assured or short assured tenancies. A PRT is a tenancy where (a) a dwelling is let to a tenant who is an individual, (b) the tenant occupies the property as their only or principal home, and (c) it is not a tenancy which the Act states cannot be a PRT. The Act contains a list of tenancy arrangements which can’t be a PRT – these include social housing (where the landlord is a local authority or registered social landlord), existing assured or protected tenancies, student lets, holiday lets and some others.

The Act also contains transitional provisions to deal with the move from assured and short assured tenancies to PRTs. An existing tenancy which is extended by agreement between the landlord and the tenant – for example, a short assured tenancy which runs for an initial six months and is then rolled over by agreement between the parties on a six monthly basis – will continue to be effective as a short assured tenancy until it finally ends, or until the landlord and tenant decide that, with effect from a date to be agreed between them, the tenancy is to become a PRT. If a new tenancy is entered into, however, then that new tenancy will be a PRT.

Tenancy ‘without limit of time’ and grounds for eviction

Perhaps the key characteristic of a PRT is that, unlike a short assured tenancy which subsists for a defined period, once the PRT is created it will continue without limit of time. It will only come to an end if (a) the tenant gives notice of their intention to leave, or (b) the landlord and the tenant agree to bring the tenancy to an end, or (c) the landlord applies to the First Tier Tribunal for an eviction order to bring the tenancy to an end.

An eviction order will only be granted if the First Tier Tribunal finds that one of the eviction grounds set out in schedule 3 to the 2016 Act applies. These are:

  • The landlord intends to sell the property
  • A lender of the landlord intends to sell the property
  • The landlord intends to carry out significant refurbishment works to the property
  • The landlord intends to live in the property
  • A family member of the landlord intends to live in the property
  • The landlord intends to use the property for a purpose other than housing
  • The property is required for use in connection with a religious purpose
  • If the tenancy was entered into to provide an employee with a home and the tenant ceases to be an employee
  • If the tenancy was entered into because the tenant had been assessed as needing community care but no longer has that need
  • Where the tenant is not actually occupying the property as their home
  • If the tenant fails to comply with an obligation under the tenancy and the Tribunal considers it reasonable to issue an eviction order because of the breach
  • If the tenant has been in rent arrears for three or more consecutive months
  • If the tenant has a relevant conviction (relating to the use of the property for immoral or illegal purposes or where the offence was committed within, or in the locality of, the property or is one which is punishment by imprisonment)
  • Where the tenant has engaged in relevant anti-social behaviour
  • Where the tenant associates in the property with someone who has a relevant conviction or who has engaged in relevant anti-social behaviour
  • Where the landlord is not registered as a landlord with the relevant local authority
  • Where the property is in multiple occupation but has not been licensed as an HMO
  • Where a statutory overcrowding notice has been served on the landlord.

We will explore a number of aspects of the Act in greater detail in the next few months, but hopefully this brief introduction to the Act will allow clients to start thinking about the potential impact of the new form of tenancy on their business and activities.

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