Switching from SATs to PRTs

In December 2017 a new Private Rented Tenancy agreement (or PRT) was introduced covering all private tenancies in Scotland. Any new tenancy starting after this date is a PRT. This has replaced the previous Short-Assured Tenancy agreement (or SAT) and the even older Assured Tenancy agreement. There are a few key differences between PRTs and SATs, one of the main ones being that PRTs are much simpler and harder to get wrong. The complex nature of SATs (that I deliberately will not go into here!) meant that landlords and letting agents would frequently execute the agreements or notices incorrectly resulting in their notices being unusable or, even worse, the tenancy defaulting to an archaic Assured Tenancy causing the landlord no end of problems.

The most significant changes to private tenancies in Scotland under the PRT are;

  • the lease no longer has a set initial period (previously this had to be a predetermined period lasting at least six months), and
  • the landlord can no longer bring the tenancy to an end for no reason (this is referred to as the removal of the “no-fault” ground for ending a tenancy).

So what does this mean for the thousands of Short Assured Tenancies in Scotland that began before the PRT was introduced?

The short answer is: nothing. If the tenancy began before December 2017 and uses a correctly executed, written SAT agreement, then it will continue to be a SAT. The landlord and tenant will continue to be bound by the initial period in the lease and the landlord may use the no-fault ground to end the tenancy, if they wish. If it reaches the end of the initial period with neither party serving notice to end the tenancy, then it will continue in line with the conditions laid out in the initial SAT agreement.

What if the landlord and tenant wish to renew a SAT?

If the landlord and tenant wish to renew the lease for a SAT then they have a choice about how to proceed. As long as the names of the tenants are not changing and the initial period of the renewed tenancy remains the same as the original SAT, then the tenancy can be renewed as a SAT. Or, if the landlord and tenant prefer, they can renew using a PRT although, obviously, there will be no initial period using a PRT.

What to do?

As a landlord, if you are in two minds about how to renew your tenancy, I would advise renewing using a SAT. It means you’ll have certainty relating to the next period of the lease and you’ll be able to bring the tenancy to an end more easily outside of the initial period.

It’s still early days with the PRT. Not many PRTs have been brought to an end yet and as new cases start to make their way through the First Tier Tribunal, the ways of negotiating the agreement will become clearer for everyone. Until then, if there is anything you are not sure about, give us a call and we’ll be happy to discuss.