When the Private housing (tenancies) (Scotland), Act 2016 was passed, Scotland created a new residential letting vehicle called the private residential tenant (PRT).
A legal device was provided to tenants who rented property under a PRT. This allowed landlords to reclaim the property from tenants when there was no legal basis to do so. That legal device is called the “wrongful-termination order” (WTO). The new paperMalcolm CombeAndPeter RobsonFor theJuridical ReviewCombe has pointed out some of the problems that WTOs have faced since their inception. These issues are highlighted in this article by Mr Combe.
The legal regime
PRTs are not guaranteed for a fixed length, unlike the assured tenancy. PRTs can be extended for as long as the tenant lives in the property as their primary residence, pays the rent and does not violate the tenancy agreement.
Tenants with a private residential lease of a dwelling under the Private housing (Tenancies (Scotland), Act 2016 should be allowed to live there until their landlord gives notice. Schedule 3 provides a finite list of grounds. Schedule 3 contains a finite list of grounds. It includes grounds that pertain to landlord’s circumstances.
To recover possession of a let-property, landlords must use one of the 18 legal grounds. These grounds are used to show that landlords’ circumstances may change. For example, a landlord might have lived in a property owned in another city and now has a job in that city. A landlord like this will need somewhere to live, and the let property may be more financially viable than renting or buying another property.
Some of these grounds can be mandatory. If established by the tribunal, the tenant is required to leave. Other grounds are discretionary and only applicable if the tribunal is satisfied it is reasonable to grant an order.
If a ground for possession has been notified to the tenant it is possible that the tenant will be required to vacate the premises in eviction proceedings at First-tier Tribunal (Housing and Property Chamber). Or, the tenant can simply move out of the premises without waiting for a tribunal order. The matter would end if the landlord (now ex-landlord) had a valid ground to possession. However, what happens if the landlord doesn’t have a legitimate reason to recover possession but pretends that they do?
If it turns out that there was no grounds for possession, the 2016 Act permits a former tenant to petition the First-tier Tribunal to obtain a wrongful termination order. A WTO can be made by the landlord to order the tenant to pay six times the monthly rent.
Analyse of WTO rulings
What is the practical operation of WTOs? Or, should we say, how does the system work in practice? This is the purpose of the Juridical Review new paper. This article examines the WTO tribunal jurisprudence emerging and argues former tenants face significant obstacles in unlocking this remedy.
There had been 21 WTO applications at the time of publication. Only three of those were granted (resulting in penalties against the former landlord of three and one times the monthly rental in two cases respectively). The FtT has since received three additional WTO applications. One of them was successful and resulted in the maximum penalty (in this case, PS3,900).
While the article highlights the three most successful cases, it is more interesting to look at the WTOs that managed to escape. In the article, we discuss in detail the reasons behind 18 failed applications. This article provides a brief overview.
There may be cases that were procedurally flawed. These applications can’t be processed if the application isn’t properly filed or the tribunal hasn’t been given the required information. Access to justice is also discussed. This refers to whether the legal aid thresholds prevent applicants from accessing professional support in preparing and presenting their applications. I won’t go into detail about that. The Scottish Legal Aid Board website states that any applicant for legal assistance in relation to private sector tenancy actions where less than PS3,000 is at issue must explain “why it is reasonable for legal help to be made available notwithstanding that the claim has a comparatively low value.” Anyone seeking a WTO for a property with a monthly rental of less that PS500 will need to present a special argument in order to unlock legal aid.
Some applications were denied because the tribunal was satisfied enough with the landlord’s explanation. For example, a relative had planned to move in but it didn’t happen. Again, there isn’t much more that can be said. WTOs could apply automatically to landlords who have set up a plan and then had it thwarted by external factors. The legislation even acknowledges this in its explanatory notes. For example, a landlord might have planned to sell a property he formerly let but failed to do so after one year on the open marketplace. He then re-let the property to generate income to pay his mortgage payments.
The cases in which former tenants were not able to obtain a WTO are those where the landlord failed to serve papers equivalent to a formal notice of leave under the 2016 Act. This is what the law says. The tribunal was very strict in requiring it.
This strict interpretation will result in tenants being denied WTOs. They have received WhatsApp messages, texts messages and emails instead of formal notices of their departure. Instead of waiting for more formal correspondence, they will be able to act on these representations and not wait for further formal correspondence. Peter Robson and myself consider this unfortunate for the reasons stated in the paper. There were also observations that tenants who move out of a property before awaiting the completion of formal tribunal process cannot access WTOs. This again strikes us as unfortunate. This is something we think should be considered to make sure that tenants who were subjected to dubious conduct from a landlord don’t fall through the cracks. At least one instance has been this way.
Some WTOs have been granted, which shows that they are possible to apply in situations where an eviction order was obtained by subterfuge. The law may also be working in the background to address mischief in relation to disputes that don’t make it to tribunal. For example, landlords may offer settlements to tenants who want to stop them from applying for WTOs. However, it would be unfortunate if WTOs’ evolving treatment causes confusion among those who apply for wrongful termination orders.