Private Rented Tenancy (PRT) to go live from 1st December 2017

We will shortly see the introduction of a major change in Scotland for the Private Rented Sector, with the introduction of the new Private Residential Tenancy (PRT) from the 1st December 2017.  This new model tenancy will replace the existing Short Assured Tenancy (SAT) and “Assured Tenancy” (AT).

The Scottish Government has confirmed that the Act will come into force on 1st December, from which date all new tenancy agreements created will have to be under the new regime.

It will no longer be possible to create the existing type of tenancy SAT or AT and all new tenancies must be created as PRT.

It is worth noting, any existing SAT or AT will continue under the current format until the lease is ended through the current recovery of possession process including the ‘no fault’ ground, or by the tenant handing in notice.

A couple of changes to be aware of when dealing with a PRT are:

  1. The removal of the “no fault” ground for termination of the lease:

One of the most important differences under the new regime is the removal of the ‘no fault’ ground, which previously gave landlords the option to remove a tenant at the end of the tenancy solely on the basis that the agreed contractual term of the tenancy had come to an end.

Under the new legislation, landlords must satisfy one of the 18 grounds for recovering possession that are set out in the Act to bring a PRT to an end.  The grounds permit for ending a tenancy in common instances such as where you wish to sell; refurbish where this will entail significantly disruptive works; move back in as your principal home; allow a family member to move in; or the tenant fails to pay rent or breaks one or more of the clauses of the lease.

  1. The removal of the initial fixed term

Unlike the existing SAT there will be no initial fixed term. The tenants are entitled to hand in 28 days’ notice at any point from the commencement of the PRT.  If the tenant agrees, this notice period can be extended by mutual consent.
Although there will be no minimum initial fixed term period, in our experience, most tenancies last at least 6 months or longer and we do not envisage there to be much upheaval from this.  Tenants will stay longer if they have a property which is well maintained and they can make a home out of it.

For HMO landlords renting to students, it will mean that the lease length cannot be guaranteed for the full academic term as is the usual practice with the current SAT.

We have collated a comparison chart below to provide some further guidance on the differences between a SAT and PRT:

 

Short Assured Tenancy (SAT) Private Residential Tenancy (PRT)
Creating a Tenancy Statutory AT5 must be signed prior to lease agreement No pre-tenancy notices required
Tenancy Layout No defined style for lease and terms can be agreed between parties (aside from statutory/mandatory requirements) No pre-tenancy notices required
Lease Term Minimum term of 6 months must be granted No fixed term
End date lease has an “ISH” date on which the tenancy ends (provided appropriate notice is issued) No end date specified in the lease – once it has been created the PRT continues until notice is served by one party
Rent Increase Serve two months’ notice of an increase, if the tenant does not accept it they have the option to move out unless an agreement is made with landlord Potential for Rent Pressure Zones, serve notice every 12 months.  If the tenant does not agree to the increase, then they may refer the increase to a Rent Officer who has the power to determine the rent.
Recovery of Possession The landlord must issue Notice to Quit and S33 Notice allowing for 2 months’ notice.

The landlord can rely on the “no fault” clause and does not need to give any additional ground.

The Landlord can rely on the grounds for recovery set out in Schedule 5 of the Housing (Scotland) Act 1988

The amount of notice a landlord is required to give will depend on the length of the tenant’s occupation at the point:

If tenant has been in occupation 6 months or less – 28 days (1 months)
If tenant has been in occupation more than 6 months – 84 days (3 months)
The landlord must rely on one or more ground(s) for recovery of possession laid out in the lease

 

To enquire about Braemore and our services, get in touch with us, here.

The Scottish Government have also put together a handy guide for landlords regarding the changes which can be found here: https://beta.gov.scot/publications/private-residential-tenancies-landlords-guide/

Braemore have been involved with the working groups and provided consultation on the planned changes and are fully equipped to ensure a smooth introduction to PRT, we wish to provide you with assurance that although significant changes are ahead, we have the knowledge and understanding to guide you through.

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