Here comes another blog post that does not have a hidden message of any sort. It’s just about the most recent coronavirus statute passed by the Scottish Parliament, with a particular focus on landlord and tenant law. If this is not your bag, please tune to a different station now.
The Coronavirus (Scotland) (No. 2) Act 2020 received the Monarch’s seal of approval on 26 May 2020 and came into force on 27 May 2020. It does not have as drastic an effect on the private rented sector as the previous Coronavirus Act: those changes are digested in an earlier blog post here. That being the case, it does have some important provisions in Schedule 1 (entitled “Protection of the Individual”). From a landlord and tenant law perspective, the changes in this schedule make it much easier for a student renting in bespoke student accommodation to bring her tenancy to an end. Those changes are the main focus of this blog post.
Schedule 1 of the No.2 Act also provides the foundation for a pre-action tickbox that private sector landlords must comply with prior to any eviction proceedings that might happen further down the line (it being recalled the First-tier Tribunal (Housing and Property Chamber) is not fully open for eviction business as things stand in any event). Those pre-action requirements will need further legislation (by way of regulations), so it is too early to comment on these incipient measures in detail. All that can be said as a result of the foundations laid in the No.2 Act is that the regulations will make provision about “information to be provided by a landlord to a tenant including information about the terms of the tenancy, rent arrears and any other outstanding financial obligation under the tenancy” and “steps to be taken by a landlord with a view to seeking to agree arrangements with a tenant for payment of future rent, rent arrears and any other outstanding financial obligation under the tenancy“.
Also worth a mention is Schedule 4 of the 2020 Act, which will be relevant to some landlords who have let (or are letting) to students. In such a situation, neither landlord nor tenant had to worry about council tax (owing to students being exempt, and this being a tax that falls on the occupier). Now, where a dwelling that had a student occupier becomes unoccupied for a reason relating to coronavirus on or after 17 March 2020 and remains unoccupied, council tax liability does not instantly spring into being for the owner.
Enough about that other stuff. As noted, my primary focus in this post is on the changes that apply to rented student accommodation in Scotland.
Student accommodation has been offered for rent by UK educational institutions for quite some time. University halls and dorms and the like have been traditionally exempt from the Rent Acts, and this exemption was actually a result of some universities with attractive accommodation seeking to ensure students did not stay on in such accommodation after graduation. As a result, campus accommodation was given special status. This did not, however, apply to standard private sector tenancies of students. Rather, it was limited to certain approved institutions of universities, colleges and a few special bodies like the Royal College of Surgeons.
These bodies continue to be outwith the private residential tenancy (PRT) regime that now prevails in Scotland, in terms of the Private Housing (Tenancies) (Scotland) Act 2016. They are listed in paragraph 5(2) of Schedule 1 of the 2016 Act. That schedule also lists various other tenancies that are not caught by the 2016 Act (such as holiday lets, agricultural land, social housing, accommodation for asylum seekers and, after a recent amendment to the law, accommodation provided to veterans or care leavers by charities).
During the consultation period about the provision of security of tenure for the PRT system that Scotland was eventually to introduce in the 2016 Act, it was pointed out and indeed felt that not providing for non-educational landlords of purpose built [commercial] student accommodation could lead to difficulties. Anecdotally, I can confirm that such landlords have played an important role in Scottish university cities, including when universities themselves have lacked sufficient accommodation for a new [residential] student intake, so it would be unrealistic not to acknowledge them as part of the housing mix that students might have resort to. The provision for such landlords was to carve them out of the security of tenure-bearing PRT, making it relatively easier to regain possession of such property from student tenants at a certain time. Whilst security of tenure is a policy that can be (and was) pursued for some residential tenants, the need for such student accommodation providers to programme the availability of their properties and having certainty as to when they would regain possession was preferred in this specific context.
The 2016 Act did this by expanded on the traditional groups of landlords exempted from the old assured and protected tenancy regimes in the residential sector. A new concept was created called the “institutional provider of student accommodation”. Where a landlord lets properties in the same building and these include at least 30 bedrooms and the landlord uses the other properties predominantly for the purpose of housing students, they are exempted from the PRT regime. There is one further requirement though. In addition, planning permission must have been granted on the basis that the let property would be used predominantly for housing students (Sch.1 para.5(3)(a)). (More on that planning provision point below.) Any landlord who has a portfolio of individual properties that happen to have student tenants in them will not be treated as exempt from the PRT regime, but a landlord with 30 or more properties grouped together, as can be seen in all of Scotland’s university cities, can be covered by the exemption in Schedule 1 of the 2016 Act.
Fast forward to 2020. Suddenly COVID-19 has changed everything, and my guess is many such landlords are in no way worried about getting tenants out of buildings that, in planning permission and marketing terms, are for student residences. Instead, the self-interested landlord’s focus in the current market is keeping tenants in. From the perspective of students though, one would imagine staying near a campus that is closed when many of their fellow students have gone home and the attractions of a university city are curtailed owing to public health measures, being held to a contract will not be an attractive prospect. That is where this new law comes to the fore.
The law now says a student (that is to say, a person studying at one of the educational institutions listed in the 2016 Act) who is in a student residential tenancy (i.e. not a PRT – a student with a PRT can get out quite quickly under that regime anyway) may “for a reason relating to coronavirus” bring to an end that tenancy at some point in the future no less than one week or four weeks away; those time periods are explained below.
What is meant by the phrase “for a reason relating to coronavirus” is not defined, although the phrase crops up regularly in both Coronavirus Acts. Later in the No.2 Act there is an example given in a different context: “for a reason relating to coronavirus (such as, but not limited to, inability to work in multiple or linked workplaces)”. It is difficult to imagine this coronavirus reason being construed narrowly if a student’s university/college is not physically operating, so basically a student tenant now has clear exit from such a tenancy.
The exit door is opened by a student simply serving a notice on her landlord in writing. That notice needs to state when she plans to leave, with that date being at least seven or twenty-eight days in the future depending on the student’s circumstances. The shorter seven-day notice to leave period applies for students who have already entered into a student residential tenancy agreement and have occupied the property at any time. The longer 28-day notice to leave period is for students who a) have already entered into a student residential tenancy but have not yet occupied the property, and b) have taken a new student residential tenancy since the law changed.
What should we make of these changes? In the short-term, it would seem quite a hardship on individual students, who may have lost income they would normally get through part-time work in places like bars, restaurants, sports stadia or cinemas, to continue to pay rent for a place in a city when (for some) they might be able to move back to the family home or maybe even move in with a partner during the ongoing coronavirus restrictions; in fact, it’s entirely possible such tenants flitted when it was safe to do (assuming it was safe) before the UK’s formal lockdown began a few months ago, given most Scottish universities stopped physical delivery of classes before actual restrictions began. Longer-term? Don’t get me wrong, it is difficult to think long-term about anything at the moment, but as time progresses the focus – rightly – will move to the owners of such properties who will understandably be quite keen to get some kind of income or use from them, perhaps by re-purposing some or all of what was student accommodation into another function. In non-coronavirus times I might have ventured an opinion on planning law here and whether it would be possible to do that in the face of a planning regime that says (it will be recalled) that the properties in question have to be used as student accommodation. I’ll stop myself in case I miss something, and indeed I’ll stop this blog post as it is already longer than I hoped it would be. Do tune in for the next edition of Scottish landlord and tenant law in a time of coronavirus at some uncertain point in the future.
The background in this blog post about student lets being outwith private rental sector regulation is modelled on Peter Robson’s annotations to the 2016 Act in W. Green’s Scottish Landlord and Tenant Legislation, a collection of annotated statutes that I am the general editor of.