The New Lease

The new Scottish Private Rental Tenancy agreement (SPRT) has been in force since 1st December 2017.  This means that all new tenancy agreements in Scotland since that date must use the new SPRT according to the Private Housing (Tenancies) (Scotland) Act 2016 or using the model provided by the Scottish Government.   Existing tenancies can run on the old Short Assured Tenancy lease indefinitely, however if either party wish to draw up a new lease, it must be the new SPRT.

The new Scottish Government Model Private Residential Tenancy Agreement is such a huge document that at first sight it is quite difficult to make sense of.  The model agreement itself runs to some 30 pages, and that is before you get to the mandatory Easy-Read (!) notes – another 49 pages.  For a more decipherable view, you can see our sample lease and easy-read notes.  However it is not all bad – the spirit of the lease is probably an improvement, offering a bit more flexibility for both sides and slightly better protection for the tenant; and in theory it is easier to execute and terminate, without the need for additional agreements (AT5 etc) or long court delays if things go wrong.

The Private Housing (Tenancies) (Scotland) Act 2016 will deliver improved security of tenure for tenants, including students in smaller purpose built and mainstream private rented accommodation, and also the power for local authorities to designate rent pressure zones within their jurisdiction. There will also be streamlined procedures for starting and ending a tenancy and a model agreement for landlords and tenants.

The Act 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.

Key features of The Act include:

improved security of tenure for tenants, including (some) students

powers for local authorities to impose rent caps in designated areas

simplified procedures for starting and ending a tenancy

a model tenancy agreement containing compulsory and other common clauses.

The SPRT will become the standard tenancy agreement between residential landlords and tenants and will replace the most common types of residential tenancies in Scotland – the Short Assured Tenancy and the Assured Tenancy. The main points to note in the Act are as follows:

There will be no minimum period of let and no pre-tenancy notices will be needed.

There will be a model tenancy agreement which may be used by landlords and tenants. Some of the clauses will be compulsory including, initially, provision for receipts for cash payment of rent, notification of adults other than the tenant occupying the property, a prohibition on sub-letting without consent and access for repairs.

A number of tenancy agreements have been excluded from the effects of the Act including agricultural tenancies of more than two acres, social housing tenancies and holiday lets.

Purpose built student accommodation will be exempt but only if the planning permission for the accommodation stipulates that it has to be used predominantly for housing students and the provider of the accommodation has at least 30 bedrooms in one building or as part of a complex again predominantly used to house students. All other student tenancies in smaller purpose built and mainstream private rented accommodation will fall within the new regime. Landlords subject to the new regime will be unable to end the student tenancies at the end of the 10 month academic term time as many do at the moment.

Tenancies will continue indefinitely unless the tenant wants to leave or the landlord can on one of the prescribed grounds for repossession. The grounds for repossession include the landlord or lender looking to sell the home or extensively refurbish it or a breach of the tenancy agreement by the tenant or change in the tenant’s status: the ‘no fault’ ground for termination will be removed.

Only one notice to leave will be needed to end the tenancy. Tenants must give four weeks’ notice to leave no matter how long the tenancy lasted. When a landlord may use one of the grounds for repossession, the notice periods are as follows:
if the tenancy lasted for six months or more, usually 12 weeks’ notice;
if the tenancy lasted for less than six months, four weeks’ notice; and,
regardless of the length of the tenancy, four weeks’ notice where the tenant:
-is not occupying the property as their home; or
-has failed to pay three consecutive months’ rent in full or is in breach of the tenancy agreement; or

-has behaved antisocially or committed a relevant criminal offence or associates with a person in the let property who has a relevant conviction or engaged in anti-social behaviour.
Rents may be reviewed once a year; the landlord must give the tenant at least three months’ notice of the increased rent. Tenants can challenge the proposed rent increase by seeking an order determining the rent from a rent officer. The rent officer must determine the open market rent which is ‘fairly attributable’; appeals can be made against such orders to the First Tier Tribunal.

Local authorities can apply to the Scottish Ministers to designate areas as rent pressure zones to regulate existing but not initial rents. If the local authority is successful, the rent pressure zone can be put in place for a maximum of five years. Landlords within the area affected will be able to raise rents by at least a minimum of CPI + 1%.

If certain conditions are met, partners, family members aged 16 and over and resident carers may succeed to a private residential tenancy on the death of the tenant.

The Act came into force in December 2017. From that point, existing assured and short assured tenancies will continue on the same terms and conditions. The parties to any such tenancy could agree to convert it to a private residential tenancy but, as yet, the legislation does not require them to do so. If, however, an existing tenancy is inherited by a successor (under existing succession rules), it will become a private residential tenancy and become subject to the new legislation.