It would be unusual for anyone involved with renting residential property in Scotland not to be familiar with a Short Assured Tenancy as defined by the Housing (Scotland) Act 1988. However, change is not that far away, and creation of a new Short Assured Tenancy will soon no longer be an option due to the provisions of the Private Housing (Tenancies) (Scotland) Act 2016.
The new type of tenancy is called a “Private Rented Tenancy”, the exact implementation date is as yet unknown, but is expected to be from December 2017. The new tenancy type will be different in a number of ways, to that which is currently considered the norm. Some of the new features will include:
A model lease will be defined by the Scottish Government; some customisation will be possible, within a framework of mandatory, optional and custom clauses.
The lease will include a start date, but no end date nor will any lease duration be permitted to be defined.
There will be scope for the tenancy to be terminated at any point by the tenant on providing 28 days’ notice.
A landlord will be able to seek to end the tenancy if one of the 18 grounds for possession apply.
The notice period a landlord must observe is either 28 days or 84 days, dependant on whether or not the tenant has been entitled to occupy the property for less or more than six months.
The defined grounds for possession cater for circumstances where a landlord intends to sell the property and where a landlord intends to live in a property.
The grounds also cater for circumstances of rent default and breach of the tenancy, amongst other.
Some but not all of the grounds for possession are mandatory grounds. This has greatest relevance in the scenario that a tenant does not move from a property following service and expiry of Notice to Leave.
A proven mandatory ground would require a tribunal to issue an eviction order.
This contrasts with seeking possession under a discretionary ground where the tribunal would only issue an eviction order in the circumstance that it appears reasonable to do so.
Rent may be increased annually, on provision of three months’ notice, utilising a prescribed form. Normally there will be scope to increase rent in line with open market rates, but provision is made for Scottish Ministers to designate an area as a Rent Pressure Zone within which rent increases will be capped. The cap may not restrict increases below 1% above the Consumer Prices Index.
Whilst there is reasonable clarity on the characteristics of a “Private Rented Tenancy”, there is currently divided legal opinion on the projected status of existing short assured tenancies following the anticipated implementation date.
The common ground on this particular aspect appears to be that short assured tenancies within their fixed term will remain as named, with the current notice periods, routes for termination of a short assured tenancy and recovery of possession options preserved.
Similarly short assured tenancies that have extended by tacit relocation will similarly remain unchanged.
It also appears accepted that any new contractual tenancy will be a Private Rented Tenancy, subject to the new regime as outlined above.
However, there is currently divided legal opinion in the circumstance that a lease is continuing on a month to month basis with some venturing that this will become a Private Rented Tenancy and others venturing that it will remain a Short Assured Tenancy. We will be carefully watching this topic unfold in the period ahead of the implementation date in order to fine tune plans in preparation for the new regime.