Home Insights Using the new Model Private Residential Tenancy – how mandatory is it?

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Using the new Model Private Residential Tenancy – how mandatory is it?

Derek Hogg | 08 Jan 2018

INSIGHTS

As most private landlords will know by now, a new form of tenancy for use in the Scottish private residential sector – the “private residential tenancy” or “PRT” came into effect on 1 December 2017. From this date onwards, the PRT will replace short assured tenancies and assured tenancies when landlords are letting out private sector residential accommodation.

However, it may be some time before a landlord has to give detailed consideration to the terms of the new PRT, since the legislation – the Private Housing (Tenancies) (Scotland) Act 2016 (the “2016 Act”) – includes transitional provisions, so that any short assured or assured tenancies which were created before 1 December 2017 will continue in their present form until they are terminated, and are not “converted” into a PRT.

Putting it in writing

When a landlord is faced with the prospect of entering into their first PRT, what form should the written tenancy agreement take? The first point to note is that landlords are under a statutory duty to provide their tenant with a document which sets out all of the terms of the tenancy and generally must do this by no later than the starting date of the tenancy (Section 10 of the 2016 Act).

The Private Residential Tenancies (Information for Tenants) (Scotland) Regulation 2017 (the “Information for Tenants Regulations”) make clear that a landlord can comply with the Section 10 duty by either providing the tenant with an electronic or paper document, and that the document (i.e. the document setting out all of the tenancy terms) must either be (a) a “model PRT”, using the model template which has been published by Scottish Government or (b) a tenancy agreement drafted by the landlord. So, reading these Regulations together with the 2016 Act, while Section 10 of the Act refers to “a document which sets out all of the terms of the tenancy”, that document in fact has to be an actual tenancy agreement – either the published model or a bespoke version.

In addition, Section 11 of the 2016 Act and the Information for Tenants Regulations oblige landlords to provide their tenants with certain additional explanatory information regarding their PRT. If the landlord proposes to use the Government’s model PRT, then the landlord must also supply the tenant with a copy of the “Easy Read Notes” published by the Government, which are intended to accompany and explain the model PRT. Alternatively, if the landlord uses a more bespoke form of tenancy agreement, then the landlord must supply the tenant with a copy of the Government’s published “Supporting Notes”. Both the Easy Read Notes and Supporting Notes are available for download from the Scottish Government website. Again, as with the duty to provide the tenant with a written agreement, the relevant notes must be provided to the tenant by no later than the start date of the tenancy, and can be provided in electronic or paper form.

A model example?

Whether or not any given landlord will use the model PRT will depend upon each landlord’s own circumstances. Someone who owns one flat may be tempted to use the model for the sake of an easy life, although even here, the landlord will be well advised to read through and understand the model and decide whether (a) they are content with what it currently says and/or (b) there are any additional provisions, such as more detailed management “dos and don’ts”, which they want to insert.

For other landlords, particularly those with a larger property portfolio, they may well choose to produce their own bespoke tenancy agreement, perhaps by converting an existing template short assured tenancy into a PRT.

For landlords choosing to use the model, they will note that it contains two categories of clause – “mandatory” and “discretionary”. Mandatory clauses – helpfully shown in the published model in a bold typeface – are intended to set out the core rights and obligations of the parties to the PRT and are described in the model as “mandatory clauses which must feature in any agreement prepared using the model”. In contrast, the model makes clear that the other discretionary clauses can be retained, removed or added to, as the landlord chooses.

These references to mandatory clauses have led some people to conclude that the clauses must be repeated verbatim in the PRT, but that does not in fact appear to be the case. While the main purpose of these clauses is to capture the core rights and obligations of the parties to the new PRT, the clauses in the model do, at times, go beyond what Scottish Government itself considers to be the actual core clauses which every PRT must include. These core statutory terms are set out in the second set of Regulations which have been published by Scottish Government – the Private Residential Tenancies (Statutory Terms) (Scotland) Regulations 2017 (the “Statutory Terms Regulations”), and cover the following:

Rent receipts;
Rent increases;
Arrangements around sub-letting, assignations etc;
Notifications about other residents;
Access for repairs;
Arrangements for termination of the tenancy.

The “mandatory” clauses in the Model PRT go well beyond just these core statutory terms and so it seems that, as long as the tenancy agreement adequately covers the core statutory terms which have been listed above as required by the Statutory Terms Regulations, then the landlord can choose to alter or remove any other terms in the model PRT, whether or not they are in bold and are referred to in the model as “mandatory”.

What this is likely to mean, however, is that if the resulting tenancy agreement does depart from the mandatory clauses in the model, then that PRT may not be regarded as being based on the published model, in which case the statutory duty on the landlord to provide the tenant with supporting tenancy information will require the landlord to provide the tenant with the published “Supporting Notes” rather than the “Easy Read Notes”.