It's important that private landlords and tenants know the basics about residential leases in Scotland. This article will concentrate on the Short Assured Tenancy which is the most commonly used type of tenancy by private landlords in Scotland. This area of law is complex and you are advised to seek the advice of a lawyer if there is anything you do not understand.

1. What is a Short Assured Tenancy?

A short assured tenancy is a special type of "assured tenancy". Assured tenancies and short assured tenancies were both introduced by The Housing (Scotland) Act 1988 which came in to force on the 2nd January, 1989. For privately rented property, the short assured tenancy is now the most common type of tenancy agreement entered into between tenants and landlords in Scotland.

2. What is the advantage of a short assured tenancy for landlords?

The main reason landlords prefer to use a short assured tenancy is the fact it gives them the right to get their property back at the end of the agreed tenancy period, providing they serve the correct notices and follow the correct procedures. For example, if you plan to work abroad for six months and let out your home for the same period, you have a legal right to take back possession of the property for your return, providing you have served the correct notices. Please note, however, that if a tenant refuses to move out at the end of the tenancy (despite serving the correct notices) you may have to go to court to formally evict them, which may take some additional time.

3. What types of property does the Short Assured Tenancy apply to?

Short assured tenancies can apply to flats, houses and self contained rooms providing the property or room will be the tenant's only or principal home. The following lettings, however, are NOT capable of being short assured tenancies:-

(a) a tenancy of a house which is also a shop or is licensed to sell alcohol for consumption on the premises.
(b) holiday lettings
(c) properties or parts of properties where the landlord also resides as a "resident landlord". If the landlords only or main home is in the same building as the house or rooms which the tenant is going to rent and there is direct access (e.g. a doorway) between the landlords part and the tenant's part of the building - then it cannot be a short assured tenancy as long as the landlord continues to live there.
(d) a house let with more than two acres of agricultural land (i.e. a farm).
(e) the tenancy of a property forming part of an agricultural holding where the property is tenanted by the person farming the holding.
(f) the letting of a property by an educational establishment (colleges & universities) to a student pursuing a course of study there.
(g) a tenancy with no rent or a rent of less than £6 per week.
(h) a tenancy entered into or resulting from a contractual agreement made before 2 January 1989. (e.g. a Regulated tenancy).

There are other categories of lettings, which cannot be short assured tenancies, which include lettings from government departments, local authorities, housing associations, shared ownership schemes and temporary accommodation for homeless persons.

4. Can I make all the tenants jointly liable for the lease, rent and property?

Yes. You can make all the tenants of a property "jointly and severally liable" for their obligations under a tenancy agreement. What this means in practice is that if one or more tenants doesn't pay their rent or bills you can sue any one of the other individual tenants for the entire arrears of rent or bills owed by the group (i.e. each tenant is liable together as a group but also individually). To achieve joint and several liability you must ensure that all the tenants sign the same tenancy agreement.

5. Does it matter whether the property is furnished or unfurnished?

No. Short assured tenancies can be created for furnished and unfurnished properties.

6. How long can a Short Assured Tenancy be granted for ?

A short assured tenancy must be for a period of "not less than 6 months" and may be extended beyond this initial minimum period by mutual agreement in the short assured tenancy agreement itself. There has been much debate about what constitutes a "six month" period, but I would advise Landlords to be extra safe and always add an additional day on to the 6 month period. For instance, if your short assured tenancy starts on the 19th September, 2009 it will probably be sufficient in the eyes of a court that it ends on the 19th March, 2010 - but, to be extra safe - and ensure that the tenancy is clearly for a term of "not less than 6 months" simply add a day on and make the end date the 20th March, 2010. This will ensure that there can be absolutely no doubt that the tenancy is for a minimum of 6 months and that you have definitely granted a short assured tenancy. If you get the 6 month period of let wrong you may inadvertently create an Assured Tenancy which will make it harder to get your property back.

7. What age does someone have to be to enter into a Short Assured Tenancy?

The Age of Legal Capacity (Scotland) Act 1991 gives 16 and 17 year olds full legal capacity to enter into a short assured tenancy agreement and the permission of their parents is not required. It may be wise, however, to consider whether a guarantor is suitable depending on the circumstances.

8. Do you need a formal written tenancy agreement to create a short assured tenancy?

Yes. Landlords are required to give tenants a written tenancy agreement setting out the terms of the short assured tenancy. Terms that must be included in the agreement include: (a) the Parties including addresses and the name and address of any agent, (b) the address of the Property (including any excluded parts), (c) the Rent including how often and by what method it should be paid, (d) the Deposit, (e) the Duration, including start and end dates, (f) whether the rent can be increased and how this is calculated, (g) a statement that the tenants have a right to have a market rent determined by the PRHP (Private Rented Housing Panel) and (h) clauses specifying any restrictions to the use of the property (which must be fair and reasonable).

The tenancy agreement must be signed by all the parties and witnessed and a copy given to the tenants. Please also remember that it is not legal to charge a tenant for providing a tenancy agreement. There are many other clauses which should also be considered for inclusion which are beyond the scope of this article.

9. Do I need to give the tenants any special notices before I sign the lease with them?

Yes. It is a legal requirement that all prospective tenants are given a special notice called an "AT5 Notice". The main purpose of this notice is to inform the tenants that the proposed lease will be a short assured tenancy rather than an assured tenancy. If you fail to serve this notice on the prospective tenants before executing the lease agreement, you will not have a short assured tenancy agreement, but will have an assured tenancy which will make it much harder to get your property back. It is vital that the AT5 Notice is properly completed and served on each and every tenant - one AT5 for all tenants is not sufficient.

It is also quite common to have to issue each tenant, before the signing of the lease, with a notice called "Prior Notification of Grounds for Possession". This notice is required if you anticipate that you will want to get your property back under grounds 1 to 5 of the Housing (Scotland) Act 1988. Examples of the grounds include: Ground 1 - if the property is your own home and you want to live there again in the future and Ground 2 - if you have a mortgage over the property your lender will almost certainly require you give notice of this. It is also wise to repeat the grounds in the lease agreement itself.

It is also worth remembering at this stage to issue your tenants with the "Repairing Standard Letter" in order to comply with the Housing (Scotland) Act 2006. More information and a template letter can be found on the Private Rented Housing Panel website: www.prhpscotland.gov.uk

10. What security of tenure does a tenant have under a short assured tenancy?

During the agreed period of let, a tenant with a short assured tenancy cannot be evicted unless they break a tenancy condition. At the end of the agreed period of tenancy, the landlord will have the right to apply for repossession of the property, providing he follows the correct procedures.

11. What Notices do I need to serve on a tenant to get back possession ?

To legally bring a short assured tenancy to an end you must serve by recorded delivery or by Sheriff Court Officers three notices. These are (a) The Notice to Quit, (b) The S33 Notice for Recovery of Possession and (c) The Form AT6. These three notices must be served together at least two months before the end of the tenancy. It is important to note that it is a criminal offence for a landlord to evict a tenant without formally serving these three notices and obtaining a court order. Similarly, if a tenant refuses to leave, despite service of these three notices, the only legal route for a landlord is to obtain an Order for eviction from the Sheriff Court.  

12. What if I have issued all the correct notices and the tenant still doesn't leave?

If the tenant refuses to move out at the end of the agreed tenancy period then an Order for eviction will have to be sought from the Sheriff Court. It is extremely important that landlords remember they cannot evict tenants without a court order - even if the tenancy end date has been reached. If you have served all three notices and complied with all the legal formalities, then the Sheriff Court must grant the Order for eviction.

13. What happens if neither the Landlord nor the Tenant gives notice that they wish to bring the tenancy to an end and the end date passes?

It is extremely important to realise that a short assured tenancy does not just end simply because it has reached it's contractually agreed end date (also called the "ish"). If neither party has served the necessary notices to bring the tenancy to an end at the "ish date" then it will automatically renew itself for the same length of time as in the original agreement, unless your tenancy agreement says otherwise. This is known as the doctrine of "tacit relocation". For example, if the duration of the original  tenancy was 6 months and neither party gave notice that they wished to end it on the end date, it would automatically renew for a further period of 6 months and the tenant would have the right to keep living in the property for another six months under the same original obligations and tenancy conditions until it was ended properly. To stop this automatic renewal and gain possession of the property you have to issue the notices mentioned above at least two months before the relevant "ish date". It is common for landlords to put a clause in the lease agreement stating that after the initial period of let (e.g. six months) the tenancy will continue on a "monthly basis thereafter" until brought to an end by either party giving the required notice. Although a landlord must always give at least two months notice prior to the "ish date" to end a short assured tenancy, you can in fact allow a tenant a shorter amount of notice (usually a month). It is also important for landlords to note that if the original tenancy was granted for more than a year, the tenancy can only renew itself for 1 year.

Copyright David Wheater 2009
The moral right of the author has been asserted.
All rights reserved. This article is intended to be a general guide only. The author cannot accept liability for any errors or omissions contained herein nor liability for any loss to any person acting as a result of the information contained in this article. This article offers advice on the basis that readers contemplating letting, or carrying out work, on their own property obtain further professional advice tailored to their own individual needs and requirements.