Private Residential Tenancies: a Guide
The new Private Residential Tenancy (PRT) comes into force on 1st December 2017, replacing the current system of assured and short assured tenancies. Existing assured and short assured tenancies are unaffected by the changes.
Scottish Government has published a model tenancy agreement for landlords. Use of the MTA is optional, but if landlords chose not to use it, then certain statutory terms must appear in tenancy agreements.
Landlords should provide tenants with guidance whether they use MTA or not. There is no need for pre-tenancy notices such as the AT5, Tenant Information Pack or regarding the applicability of certain grounds for possession. However, landlords will still need to provide safety certificates and ensure properties meet the required standards etc.
As a PRT has no end date or duration, it can be terminated at any point from the start date, subject to relevant notice requirements, but landlords will have to rely on new grounds of possession.
Initial rents are set by market forces, but rent can only be increased once a year from the start of the lease by giving tenants 3 months’ notice. Tenants will have 21 days to object. If they do, the matter will be determined by a rent officer who will set an “open market rent” for the property.
There are also provisions for Scottish Ministers to create Rent Pressure Zones (RPZ) to put further controls on rent increases within RPZs. RPZs can be created where rents are rising too fast, causing hardship to tenants and putting local authorities under pressure to provide housing or subsidise rents.
Tenants must give landlord at least 28 days’ notice, which can be given at any time after the PRT starts.
Landlords can only end a PRT using one or more of the new 18 grounds for possession. Some of these are mandatory (M), some are discretionary (D) and two are mixed grounds (M&D);
1. Landlord intends to sell property at market value within 3 months of tenant leaving (M)
2. Property to be sold by mortgage lender (M)
3. Landlord intends to refurbish the property (M)
4. Landlord intends to live in the property themselves (M)
5. Landlord’s family member intends to live in the property (D)
6. Landlord intends to use property for non-residential purposes (M)
7. Property required for religious purposes (M)
8. Tenant no longer an employee of landlord (M&D)
9. Tenant is no longer in need of supported accommodation (D)
10. Tenant is not occupying the property (M)
11. Tenant has breached tenancy agreement (not rent) (D)
12. Tenant has owed some rent for at least 3 consecutive months (M&D)
13. Tenant convicted of using property for immoral/illegal purpose or convicted of offence committed at/ near property (M)
14. Tenant has acted in anti-social manner (D)
15. Tenant associates with someone who has a criminal conviction or who has engaged in anti-social behaviour (D)
16. Landlord has been refused registration or had registration revoked (D)
17. Landlord’s HMO licence has been revoked (D)
18. Overcrowding statutory notice has been served on the landlord (D)
To end the tenancy, the landlord must issue the tenant with what is called a “Notice To Leave” (NTL), detailing which of the grounds apply and providing relevant evidence.
Where the tenant has been entitled to occupy the property for 6 months or less at the time notices are served, the Notice period for all grounds is 28 days. Certain grounds, such as rent arrears will always have a notice period of 28 days regardless of how long the tenant has been in the property. Otherwise, the period of notice will be 84 days.
If the tenant doesn’t leave property when the NTL expires, the landlord must apply to the new First-tier Tribunal: Housing & Property Chamber (HPC) to have the tenant evicted. Applications to HPC are free, and parties can represent themselves. If the ground is a mandatory one then the tribunal has to issue eviction order if the ground is established. With discretionary grounds, not only do the grounds need to be established, but granting the eviction order also has to be reasonable in the circumstances.