Time and time again we are urged not to trust anything free online. Yet the Scottish Government will give you a free PRT lease? Gratis and legit.
Even better, not only do you get a free PRT lease to build online, but you also get the added value of the tenants digitally signing it.
Up until December 2017 all property contracts had to be fully signed and witnessed to be legal. So, digital signatures are a big leap forward for Scotland.
To access the Scottish Government Model Tenancy Agreement (MTA) for a private residential tenancy go to:
Unfortunately, as with many things legal, using the MTA raises several concerns for me.
As a letting agent, running our business over the last 27 years, the ease with which a landlord can set up a tenancy rings alarm bells. Whose interests are served most with the Government’s free PRT lease?
There is an alternative. The MTA can be altered within certain restrictions and this article considers both forms of private residential tenancy agreement.
In December 2017 the fixed term Short Assured Tenancy (SAT) (similar to the English Short Shorthold Tenancy) was replaced with the open ended, Private Residential Tenancy (PRT).
The change was welcomed by Shelter, with their director Graeme Brown stating, “Today represents a new dawn for all private renters in Scotland. These new laws bring unprecedented security of tenure to private renters, with landlords now needing a good reason to evict tenants.”
What Shelter applauded were the three fundamental differences between the previous SAT contract and the PRT, introduced by the Private Housing (Tenancies)(Scotland) Act 2016.
These changes were:
- An end to fixed term tenancies.
- An end to ‘no fault’ evictions.
- Tenants can give 28 days’ notice to leave.
The new PRT shifted the balance of power from landlords to tenants.
To aid the transition, the MTA provided a quick and easy solution for landlords keen to use an off the shelf, free PRT lease.
WHAT IS A PRT?
The model PRT contains a structure of mandatory clauses and clauses a landlord can accept or adjust. There is also clause 37 which allows a landlord to add additional subclauses to the contract.
There are also guidance notes that must be issued with the MTA which explain the contract to a tenant, and what their rights are under the lease.
These notes carry a maximum penalty of 3 months’ rent if the guidance notes are not presented with the lease and a tenant can complain to the First-tier Tribunal for Scotland (Housing and Property Chamber) (FTT) where a landlord does not comply.
But the FTT can only issue this fine if the landlord still hasn’t issued the guidance notes by the time they consider the application (see subsection (1)(b)). Any sensible landlord would just issue them once the error has been identified and give an apology before any FTT case meeting.
A copy of the current MTA can be downloaded from:
The disadvantage of the Governments model is the lack of safeguards for landlords.
When the PRT became law, the Scottish Government removed jurisdiction for housing matters in the private residential sector from the Sheriff Courts and gave them to the FTT.
Over the last three years tenants and landlords have used this free service to test the provisions of the PRT. The decisions are available on the FTT website at:
Any landlord who has had to argue their case in a tenancy deposit scheme adjudication will also recognise the importance of a lease stashed full of substantive clauses creating legal obligations for the tenant. So long as the clauses are reasonable adjudicators accept their legal standing.
One such clause we use relates to tenants losing keys. Adjudicators would award the cost of replacement keys if we did not have our lock replacement clause.
Yes, these additional clauses can be added into Clause 37 in the MTA but look closely at how limited the other clauses are in the main body of the model agreement.
The agreement can be strengthened, as long as the final lease contains the nine statutory terms required in all PRT leases.
These nine statutory clauses are explained in the guidance notes that replace the easy read notes required when a modified PRT is used.
The allure of digital signing is very strong, especially if time is short, signatories live far away or pandemic restrictions are in place.
We do not use digital signing in our agency. We believe the tenants signing the lease in our office allows them the opportunity to question the contract or supporting paperwork. It also confirms the identity of those signing the contract against their photo ID, provided as part of the referencing process.
We need to know the person signing for the keys matches the ID signature.
A digital signature can be carried out by anyone, offering an easy target for fraud. And frankly I do not want to have to explain to any landlord why their house contents have been stolen after signing over keys.
I recommend landlords tailor the Government’s PRT contract to expand their protection.
The COVID pandemic has caused ‘temporary’ changes to how some mandatory clauses in a PRT work. This is especially true about eviction and rent arrears. The suspension of the FTT and subsequent replacement of face-to-face hearings with conference calls means there is not only delays in cases being heard, but also a greater reliance on evidence, especially within the terms of the lease contract.
A free download is easy to do, but the consequences of poorer protection could cost far more than getting a PRT with extra bite.
Now more than ever before landlords should research Tribunal decisions to craft their own additional or modified PRT clauses. They also need to check the Scottish Government website for the latest updates or changes to the lease wording – especially in these uncertain times.
Alternatively, use a letting agent Tenant Find Service if you are a self-managing landlord, or consider a full management service with a reputable letting agent such as Key-Lets.
Call Tim on 01292 289289 or Email: [email protected]
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