Can a company enter into a PRT as a tenant? Rangers FC sportingly put this to the test

By Malcolm Combe - Posted on 24 January 2025

The First-tier Tribunal (Housing and Property Chamber) is a specialist forum that deals with private rented sector tenancy disputes in Scotland. It is the place where, for example, a private tenant goes to hold their landlord to account when they are living in unsuitable accommodation, and it is the port of call for a private landlord who seeks a monetary award or perhaps even an eviction order when a tenant is in rent arrears.

Some other types of tenancy have a different specialist forum that caters for them – litigation about rural tenancies normally begins in the Scottish Land Court. Where there is no specialist forum provided for a tenancy regime, the local sheriff court is the default starting point for any litigation. This is the situation for social residential tenancy cases (where the landlord is a council or a housing association). Similarly, commercial tenancy lawsuits will normally begin at sheriff court level, although high value disputes might feasibly make it straight to the Court of Session.

A sizable tranche of the work of the Housing and Property Chamber relates to private sector tenancy deposits. From a tenant’s perspective, such disputes often relate to a situation where a tenancy deposit has not been lodged with an approved deposit protection scheme. In such circumstances, the tribunal can make an award of up to three times the amount of the unprotected tenancy deposit (as has been digested in an earlier post on the Strathclyde Law Blog).

Last month, a surprising party name cropped up as an applicant on the website of the Housing and Property Chamber in the context of a tenancy deposit dispute. That party is one known to football fans all over the world, not to mention non-football fans in the country who cannot help but know of its cultural significance. The Rangers Football Club Ltd was the applicant who sought an order in relation to a rental property.

Exactly how this situation came to pass is not immediately obvious from the publicly available paperwork – perhaps Rangers FC rented a property with a view to making the let accommodation available to youth or overseas players (whether by way of a sublet or another occupancy arrangement), and then this dispute arose in relation to the [head] lease in which Rangers FC was the tenant. Such an arrangement is certainly not unheard of, and I am award of other large employers who organise accommodation for junior or trainee staff who are moving to a new city in such a manner. Either way, this was not something the tribunal needed to interrogate before making a ruling.

The resulting judgment is a short one (and is available on the Housing and Property Chamber’s website). It is less than two pages of A4, and much of that is filled with details of the forum and a case reference (FTS/HPC/CV/24/5068), an explanation of the parties and the let property involved in the dispute, plus boilerplate wording that is seen in many routine rulings.

This case related to a flat in the west end of Glasgow (“the Property”). Rangers FC’s named opponent was an established Scottish letting agent acting on behalf of an unnamed landlord.

Presumably, a deposit sum was provided by Rangers FC in relation to the Property, and this was not returned in full at the end of a let (for undisclosed reasons). Rangers FC accordingly made an application under the relevant procedural rule (Rule 111 of the 2017 Procedure Rules) and a related section of the legislation (namely section 71 of the Private Housing Tenancies (Scotland) Act 2016).

The Private Housing Tenancies (Scotland) Act 2016 is the parent statute for the prevailing private letting vehicle in Scotland. All non-social residential tenancies (i.e. tenancies where the landlord is neither a council nor a housing association) entered into since December 2017 have been governed by the 2016 Act, subject to certain narrow exceptions found in schedule 1 to the 2016 Act that are not relevant here.

What is relevant here is who can be a tenant when a private residential tenancy (PRT) is established. Section 1(1) of the 2016 Act provides the following:

A tenancy is a private residential tenancy where—

(a) the tenancy is one under which a property is let to an individual (“the tenant”) as a separate dwelling,

(b) the tenant occupies the property (or any part of it) as the tenant’s only or principal home, and

(c) the tenancy is not one which schedule 1 states cannot be a private residential tenancy.

In the event of the tenant’s non-compliance with (a) or (b) (or indeed (c)) above, this will prevent the formation of a PRT, but that is not necessarily the end of the matter. This because another (common law) tenancy may be created, assuming all the Scots law requirements for a lease are present.

Any such tenancy will not be regulated by the 2016 Act. Also, and importantly for this case, the relevant forum for any disputes about a common law tenancy is not the First-tier Tribunal (Housing and Property Chamber). As already noted, this is a forum that deals with private rented sector tenancy disputes under the 2016 Act (and also any older regimes), plus property factor and letting agent disputes. The local sheriff court has jurisdiction for other tenancy disputes.

Returning to the text of this tribunal ruling, at paragraph 1 the legal member of the tribunal (the legally qualified individual who acted as the judge here) narrates that Rangers FC was issued with a request for further information, owing to it being a limited company and not a natural person. This being the case, the tribunal flagged that the tenancy could not be a PRT. Apparently Rangers FC failed to respond to that request or to a reminder.

Given the above, paragraph 2 is somewhat unsurprising. Paragraph 2 sets out the Decision, and explains that the Legal Member considered that the application should be rejected in terms of the relevant procedural rule (Rule 8(1)(c)). This rule provides that an application must be rejected if the tribunal has “good reason to believe that it would not be appropriate to accept the application.”

Paragraph 3 then begins to set out the Reasons for Decision, suitably succinctly. The tenancy agreement which was lodged with the application for the repayment of part of a tenancy deposit stated that that the tenancy was not a private residential tenancy because the tenant was not an individual.

Turning to paragraph 4, this explains what a PRT is with reference to the 2016 Act. As highlighted above, to create a PRT there must be: a let to an individual (or individuals); as a separate dwelling; which will be used as their only or principal home; and the arrangement is not otherwise excluded from the statute.

Rangers FC might have legal personality, but it is not a human being that can enter into a PRT, and as an incorporated company it cannot occupy a residential property as its principal home. This meant the lease of the Property was a commercial one, and (in terms of section 71 of the 2016 Act) the tribunal had no jurisdiction to hear the case.

The tribunal’s coverage concludes in paragraph 5, which somewhat pointedly states that the application should have been made against the owner of the let property, rather than their agent. A failure by Rangers FC to respond to the tribunal’s proper requests for further information was also noted there; this might be characterised as another goal being awarded against an already beaten opponent, or alternatively it might be seen as a helpful pointer as to what Rangers FC needs to do to have a chance of unlocking the remedy it seeks. With that in mind, it can be noted that Rangers FC could indeed kick-off a fresh action in Glasgow Sheriff Court, although pursuing the letting agent directly again would not be advisable given the comments here.

Returning to the key point of the case, and indeed the key point of this blog post, the tribunal is correct that Rangers FC was not able to enter into a PRT as a tenant. Much in the same way as an earlier tribunal case noted that a limited company cannot evict a residential tenant from a property it owns on the basis of the eviction ground of moving a member of the landlord’s family into the let property (because a company has no family in this sense), a limited company – even one as culturally significant as Rangers FC – is not an individual and cannot live in a west end flat as its only or principal home.

In the past fifteen or so years, Rangers FC has been a party to or has indirectly featured in a wealth of case law for legal academics to use in their teaching. Somewhat unexpectedly, there is now a new Rangers case, which serves as a handy and easily understood authority that I can drop into the syllabus for my Housing Law module, an elective on the Strathclyde LLB. What with Rangers FC being a somewhat unique protagonist in this housing matter, I imagine details of the case will readily stick in the mind of a Scots law student, especially if they like football and/or study in the city of Glasgow.