Private Residential Tenancy

The Private Housing (Tenancies) (Scotland) Act 2016 commenced on 1 December 2017 and introduced the new ‘private residential tenancy’.

Any new tenancy entered into on or after 1 December 2017 will be a private residential tenancy as long as:

• The property is let as a separate dwelling. A property can still be considered a separate dwelling even if some of the core facilities are shared with other tenants. For example, if a tenant rents only a bedroom in a flat, but has a right to use a shared bathroom and kitchen, the property will be treated as a separate dwelling because the tenant has access to the range of facilities required for it to be regarded as a separate dwelling
• The tenant lives in it as their only or main home
• The tenancy isn’t excluded under schedule 1 of the 2016 Act

Even if the tenancy agreement is called something different, the tenant will have all the protections of a private residential.

PRT’s are open-ended tenancies that will last until the tenant wishes to leave the property or until the landlord relies on one or more of the 18 grounds for eviction. For more information, read Grounds for eviction in Scotland.

Holiday Lets – Exception

A tenancy cannot be a private residential tenancy if the purpose of it is to confer on the tenant the right to occupy the let property for a holiday.  Unlike a PRT, a holiday let does have an agreed start and end date.

The current tax definition for furnished holiday let (FHL) is income from a single stay of no more than 31 days. Any stay over the 31 day threshold will not be considered as FHL income but as standard rental income. However, it is important to note that if the property becomes the principal place of residency (for work purposes or other) for over 31 days, the tenancy will continue to be a holiday let provided at the point of letting it was created for the purposes of a holiday. If the total of all long-term lettings – i.e. those that exceed 31 continuous days – is more than 155 days during the year, your property will not be an FHL for that year. Longer-term occupation is defined as a letting of more than 31 days in the year but NOT for longer than 155 days.

An owner looking to accept holiday lets for some of the year and at other times of year let the property to occupants who will use the property as their main residence (for example during low season) would need to be a registered landlord and issue a PRT contract to any tenants using the property as their main residence.

If you let a property for longer than 31 days, you may also be in breach of FHL taxation laws.

Considering long term lets? SAL can save you time and money
Letting in the private rented sector differs significantly to operating short term lets. The Scottish Association of Landlords (SAL) specialises only in that sector and has over 20 years’ experience of supporting Scottish landlords and letting agents to provide high quality privately rented housing.

Here are a few points from SAL chief executive John Blackwood (pictured) to consider if you’re thinking of letting a property longer term.

• Mandatory landlord registration
• Safety certification differs
• Private Residential Tenancy applies – no fixed term lets now
• Recent changes to the process for giving notice to leave
• Deposits legislation differs
• The First-tier Tribunal (Housing and Property Chamber) deals with disputes
• Mandatory letting agent registration for anyone who lets a property that isn’t owned by them. This usually even applies to letting of property owned by family members other than spouses/partners

Further information can be found of SAL’s news page

Ready to accept long term lets or winter lets?  We recommend joining SAL for up to date information and guidance. – https://scottishlandlords.com/join-us/

SAL membership benefits:

Here are just some of our unique member benefits, all inclusive in your SAL membership fee:

• website members resources area: downloadable factsheets and all documentation required for letting
• unlimited access to our unique Scottish letting advice helpline – invaluable with any problems you may require specialist advice on
• discounted core standards training sessions from Landlord Accreditation Scotland
• campaigning on behalf of members
• discounts on other useful seminars
• member deals on goods and services
• 10% off at B&Q with SAL TradePoint card
• SAL tax investigation insurance – included with landlord membership
• 15% off at Carpetright stores, online and at home.
• subscription to Landlord Focus magazine
• regular email updates directly to your inbox
• local meetings all over Scotland via our 14 branches – currently held via Zoom
• add your voice to SAL’s lobbying of Holyrood and Westminster politicians about landlord and agent interests

SAL is run by landlords and letting agents for the benefit of members letting property in the private rented sector. Our policy and parliamentary affairs specialists can also assist with any issues you may have with local authorities and contact MSPs on your behalf, if required.  The more landlords and agents that join SAL, the louder our voice, so we hope we can welcome you on board.

N.B. please bear in mind our subscription fee is an allowable expense on your tax return to set against letting income.

If SAL can be of assistance or if you would like any more information about the various membership benefits, please do let them know.  The SAL team looks forward to being of service to you.

Disclaimer – Guidance Sheets are written by experienced Members of the ASSC and other experts. The information in the ‘Guidance Sheet’ is provided by the ASSC for use by Members in support of their own independent business decisions. It does not constitute advice or instruction for which the ASSC can be held liable in any way whatsoever. All Members and other readers remain responsible for the consequences of any decisions taken whether in the light of information gained from this Guidance Sheet or not.