A Guide to Private Residential Tenancies in Scotland (Part One)

On 1 December 2017 a new type of tenancy was introduced in Scotland – the Private Residential Tenancy ("PRT"). The PRT replaced the existing regime of assured and short assured tenancies, and after 1 December 2017 it was no longer competent to grant an older type of residential lease. PRTs are governed by the Private Housing (Tenancies) (Scotland) Act 2016 (the "2016 Act").

In this first part of the Guide, we look at what a PRT is, the statutory terms which apply, and the Model PRT.

What is a PRT?

Any new tenancy entered into on or after 1 December 2017 in Scotland (whether it is called a PRT or something different) will be a PRT as long as:

• the property is let as a separate dwelling. This may be the case even if some facilities are shared with others. For example, a bedroom within a flat will be considered a separate dwelling where the tenant is entitled to use a shared bathroom and kitchen;
• the tenant lives in the property as their only or main home; and
• the tenancy isn't one of the 18 types of tenancy which cannot be a PRT. Schedule 1 to the 2016 Act sets out the types of lease which cannot be a PRT (for example, student lets, holiday lets, licenced premises, lets by a resident landlord etc).

The Statutory Terms

The 2016 Act provides for the Scottish Ministers to pass regulations stipulating terms which apply to every PRT, whether or not the lease document specifically includes them.

The current statutory terms, set out in Schedule 2 to the 2016 Act, are:

• rent can only be increased in accordance with the 2016 Act – rent cannot be increased more than once a year, and at least three months' notice must be given of any increase. There is currently a cap of 3% on rent increases, or up to 6% in particular circumstances;
• a landlord must provide a written receipt for payments made in cash - with date of payment, amount paid, and either confirmation as to the amount outstanding or that no further rent is unpaid;
• a tenant is prohibited from subletting, taking in a lodger, assigning their interest or otherwise parting with or giving up possession of the let property to a third party without the written agreement of the landlord;
• a tenant must tell their landlord in writing the name of, and their relationship to, anyone aged 16 or over who is not a joint tenant and who is occupying the let property as their only or principal home. The tenant must also update their landlord when such person stops occupying the property.
• a tenant must allow reasonable access to the let property for certain authorised purposes (specified in related legislation), where 48 hours’ notice has been given or when access is required urgently for carrying out work or inspection.

In addition, the 2016 Act stipulates that a PRT cannot be brought to an end by the landlord, the tenant, nor any agreement between them, except in accordance with the provisions of the 2016 Act.

The Model PRT

A landlord is required to provide their tenant with a written tenancy agreement, at no cost to the tenant, and information regarding the PRT which the tenant is entering into.

The Scottish Government has created a Model PRT which can be used. This contains core rights and obligations which must be included, and other discretionary clauses which can be kept, adjusted or removed. Additional terms can also be included as long as they comply with the law.

It is not necessary to use the Model PRT - a different format of agreement can be used as long as it complies with the provisions of the 2016 Act.

The Scottish Government has also drawn up two sets of notes to be given to tenants:

• Easy Read Notes which should be issued if the Model PRT is used; and
• PRT statutory terms supporting notes which should be issued if the Model PRT is not used.

If a landlord fails to provide: (1) a written tenancy agreement on the day the PRT starts (or within 28 days of a tenancy which was not a PRT when it started becoming a PRT); (2) the correct accompanying notes; and/or (3) written notice of any updated terms of the tenancy within 28 days of the change, a tenant may make an application to the First-tier Tribunal for Scotland (Housing and Property Chamber) (the "Tribunal") in respect of the landlord's omission. If the issue has not been resolved by the date on which the Tribunal considers the tenant's application, and the landlord does not have a reasonable excuse for their failure, the Tribunal may order the landlord to pay the tenant up to:

• three months' rent if either the tenancy agreement/updated terms or the notes have not been provided; or
• six months' rent if both have not been provided.

In Part Two of this Guide we look in further detail at key terms in PRTs, Part Three discusses how PRTs are brought to an end, and in Part Four we consider related matters such as: the repairing standard; deposit requirements; landlord registration; letting agent registration; and house in multiple occupation (HMO) licencing.

The legal position on points covered in this Guide is correct as at the time of writing, but this area of the law is often subject to change and taking legal advice is recommended. To check the up-to-date position, or for further information or advice, please get in touch with your usual Brodies contact.