Private Housing (Tenancies) (Scotland) Act 2016- Transitional Provisions

With the expected date of implementation of the Private Housing (Tenancies) (Scotland) Act 2016 (2016 Act) being “December 2017”, many letting agents and landlords have been asking: what happens to existing Short Assured Tenancies when the 2016 Act comes into force?

The general rule is that, if an existing tenancy that is extant when the 2016 Act comes into force it will remain a Short Assured Tenancy. That is, existing tenancies will not automatically convert to the new Private Residential Tenancy (PRT).

However, after the commencement date of the 2016 Act, you will not be able to create any new Assured or Short Assured Tenancies (SAT). That means all residential tenancies granted to individuals (subject to exceptions) after the commencement of the 2016 Act can only be PRTs.

How will this work in practice?

If we assume, that the date is to be 1^st December 2017 (all we have at the moment is December 2017, so this date is merely illustrative) any new tenancies created after that date will require to be PRTs.

If we have an existing SAT for, say 6 months, that commenced on 10^th November 2017, it will remain a SAT on 1^st December 2017. Unless the landlord and tenant decide between them that they want it to be a PRT.

The next question is: what will happen when that existing SAT comes to an end – let’s assume 9^th May 2018?

There are 3 possibilities:

• An initial 6 month term followed by month to month rolling contractual extensions;
• An initial term of 6 months, but the lease is silent about what happens afterwards and so tacit relocation applies; or
• An initial term, but the landlord and tenant agree to a further contractual extension of 6 months (or other period) to take effect from 9^th May 2018.

Under the transitional provisions contained in the 2016 Act, after 9^th May 2018 in scenarios 1) & 3) above you would create a PRT by default.

Only where tacit relocation operates to extend the original tenancy will the tenancy remain as a SAT.

If there is a desire to preserve any existing SATs in order to retain a landlord’s automatic right to possession once a SAT comes to an end, there are ways to manage this. These include looking at the style of lease used for new tenancies entered into from now until December 2017. For existing tenancies, you can look at using Notices to Quit to bring contractual tenancies to an end.

Both routes have their advantages and disadvantages and ultimately, how you manage the transition to the new system is for landlords and or letting agents in discussion with their landlord clients. This will be driven by whether or not there is a desire to hold onto existing SATs and therefore the ability to recover possession under section 33 for as long as possible.

If you wish to discuss this or any other private tenancy matter, please contact Rory Cowan on 0141 221 6020 or rorycowan@bkf.co.uk