The new Private Residential Tenancy
One of the features of the new Private Residential Tenancy (PRT) introduced by the Private Housing (Tenancies) (Scotland) Act 2016 is that the lease has a start date but no end date. The fundamental principle underpinning a PRT is that a tenant, provided they pay rent on time and abide by the tenancy conditions, will have a home for as long as the tenant wants.
This is in contrast to the Short Assured Tenancy regime whereby leases were granted in most cases for the minimum period of 6 months, albeit many tenancies simply rolled on by “tacit relocation” (automatic renewal) after the first 6 months.
During the passage through the Scottish Parliament of the Bill which has introduced the 2016 Act, one reason for rejecting a minimum period of tenancy was to ensure that no-one would be trapped into a tenancy without the ability to move on. Under a PRT, a tenant can take up such a tenancy, decide they don’t want to stay and immediately give 28 days’ notice to end the lease.
However, there is an unintended consequence of a lease with no end date.
Terminating a joint tenancy
The 2016 Act provides that where two or more persons are tenants then under a PRT the references in the Act to “the Tenant” mean all of those persons collectively. The effect of this is that in order to terminate a tenancy where two or more persons are the tenant, all of those persons must act together to bring the tenancy to an end by giving the notice to the landlord. In a situation where not all agree to this, everyone who took up the PRT is effectively trapped in the PRT until such time as all of them wish to terminate the tenancy.
In theory someone who has left the property could be pursued for rent arrears, as such a person is still jointly and severally liable along with their co-tenants for the rent. Alternatively, where the rent is paid in full by the remaining joint tenants, they could then seek recovery of the departing tenant’s share from that person.
In the social sector, there is provision for “Joint Tenant Abandonment” if the landlord thinks a joint tenant is no longer in occupation and has no intention of moving back in. In such a situation, the landlord can bring the interest in the lease to an end by the service of a notice under the Housing (Scotland) Act 2001. The 2001 Act also contains provision for a joint tenant to give four weeks’ written notice to the landlord and also to the other remaining joint tenants that they wish to bring their interest in the tenancy to an end. In that case, the tenancy will continue with the other tenants.
The 2016 Act has no similar provisions. Where one or more joint tenants wishes to leave and other tenants wish to remain there would seem to be no option other than all parties, including the landlord, agreeing the tenants will serve notice and the landlord will re-grant the PRT to the remaining tenants.
This situation did not arise under the Short Assured Tenancy/Assured Tenancy regime. It is settled law that in a Short Assured Tenancy any one of the joint tenants can, after expiry of the initial contractual period, serve notice which then prevents a lease renewing.
This issue arising from the PRT is currently the subject of internet discussion amongst letting agents, but for the moment there is no statutory mechanism to resolve the issue.
While this is more a problem primarily for tenants rather than landlords, it may be that landlords are drawn in to trying to resolve the situation where one tenant wants to move out. That said, in the absence of unilateral agreement amongst the tenants, there is effectively nothing the landlord can do to assist.
In another feature, it may also be an issue for a parent who is a guarantor for a lease for a young person and who may discover they have ended up taking on more than they anticipated.