23rd January 2020

Private Residential Tenancy – Landlord Dispute

Private Residential Tenancy
Since 1st December 2017, new Scottish tenancies for separate dwellings require to be a Private Residential Tenancy (“PRT”), subject to certain exclusions. Any disputes arising out of PRT’s are resolved by the First Tier Tribunal for Scotland (Housing and Property Chamber) (“the FTT”). Any appeal can be made to the Upper Tier Tribunal (“the UTT”) for Scotland, with a Sheriff making the determination.

Tribunal Application
In a recently reported case, an application was made to the FTT by a tenant of a flat seeking a declaration as to whether the tenancy was a PRT. The FTT held that there was no PRT as the agreement did not include all the essential elements of a PRT, namely specified rent, tenants and premises.

The tenant moved into a flat shared with three other tenants on 1 January 2018, with monthly rent of £350 per person. Whilst no written tenancy agreement was issued, the tenant understood that she was liable for her share of rent only (i.e £350). She made payment of this amount monthly, as did the other tenants.

Each tenant had their own bedroom and shared a communal kitchen, living room and bathroom. In August 2018, one of the tenants left resulting in a new tenant moving into the flat. All tenants were then provided with several draft written tenancy agreements.

The agreements stated that each tenant was jointly and severally liable for the whole rental sums due i.e. £1,400 per month. The Tribunal heard from the tenants that they had not signed these draft tenancy agreements. The landlord argued that the exiting tenant had assigned the agreement. This argument failed as the previous tenant confirmed that she had not been provided with any draft written tenancy agreement, that there had been no assignation and in any event, the draft tenancy agreements contained a clause which prohibited assignation without prior consent of the parties.

In light of the lack of certainty, the FTT held that there was no agreement between the parties as to what the rent should be, who the tenant was or what the subjects were. As a result, there was no PRT. The tenant then appealed to the UTT.

Upper Tier Tribunal Appeal
Sheriff Ross held that the decision of the FTT was correct, but disagreed with their reasoning. The Sheriff gave weight to the actions and words of all parties. It was clear from these that the arrangement was that the tenant occupied a one-quarter share of the whole flat and was not jointly and severally liable for the whole rental payment. It was irrelevant that the landlord thought one tenant could be charged the whole rent of £1,400 per month at the landlords’ discretion.

For a PRT to exist, a tenant must occupy the property as a separate dwelling. The Sheriff noted that from correspondence it was clear the tenants were stand-alone tenants as they each had exclusive occupation of their own bedrooms with the ability to share all other communal facilities. Being such stand-alone tenants meant that they did not satisfy the criteria for a PRT and thus the tenant could not benefit from the protection or rely upon any remedies under the Residential Tenancies Act 2016.

Inner House Appeal
On 10 December 2019, the Inner House of the Court of Session issued their decision which quashed the decision of the Upper Tier Tribunal. No answers were lodged to the appeal. It remains to be seen if a different decision would be taken if the appeal was to be defended.

Nevertheless, the significance of overturning the UTT’s decision is that a tenant can have a PRT even where they share other living accommodation in a flat. Accordingly, the tenant will be protected by the 2016 Act and can rely on its remedies.

Entering into Tenancy Agreements
Landlords and tenants should always take advice when entering into a Tenancy Agreement to ensure that the Agreement being entered into is of the type required/desired.

For information and help on any of the matters raised in this article please speak to a member of our Dispute Resolution Team. Thanks to Andrew Shaw, our Trainee Solicitor, for input into this article.

Susan Currie, Solicitor
Dispute Resolution
Blackadders LLP 
@DisputeLawSusan

www.blackadders.co.uk 

 

 

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