Wrongful-termination orders for former private sector tenants: do Scotland’s landmark residential tenancy laws fail those who are tricked out of their home by landlords?
By Malcolm Combe - Posted on 30 July 2021
Some people do not own the place where they live. This is true and non-controversial in many jurisdictions, and legal systems all over the world – including Scotland – take steps to regulate the realm of residential tenancies.
Depending on the status of the landlord that a tenant rents from, this tenancy might be thought of as a social tenancy (where the landlord is a local authority or housing association) or a private arrangement. Social housing is subject to its own rules with regulatory supervision by the Scottish Housing Regulator, and is not the concern of this blog post. This is a post about private renting in Scotland, which is subject to its own rules during the life of the tenancy and also – potentially – even after the tenancy comes to an end.
More specifically, this blog post is about a legal device that can be available to those who had rented a property under a private residential tenancy – the prevailing private sector letting vehicle in Scotland since 1 December 2017 – where their landlord has been a chancer and regained possession of the let property when they had no legal ground to do so. That legal device is called the “wrongful-termination order” (WTO).
This post will set out some of the background law in this area as a whole before going on to explain how WTOs are operating in practice. It also doubles as a signpost to a piece in the new issue of the Scots law journal the Juridical Review (by Peter Robson and me) and links to a related podcast episode, where I discuss the article and various other matters with Professor Bram Akkermans of Maastricht University.
The legal regime for private renting in Scotland
Scotland introduced a new private residential letting vehicle, known as the private residential tenancy (PRT), when the Private Housing (Tenancies) (Scotland) Act 2016 came into force. Unlike the short assured tenancy (the letting vehicle that dominated the Scottish private rented sector after its introduction by the Housing (Scotland) Act 1988), PRTs cannot be of a set length. PRTs are essentially open-ended, provided that the tenant lives in the let property as their main home, pays their rent, and doesn’t somehow breach the tenancy agreement.
Accordingly, tenants with a private residential tenancy of a dwelling in terms of the Private Housing (Tenancies) (Scotland) Act 2016 should be able to live there until they decide to move out, unless their landlord has a ground to evict them in terms of the 2016 Act. A finite list of grounds is provided in Schedule 3 of the 2016 Act. This eighteen-point list includes grounds that relate to the landlord’s circumstances (such as requiring the property to live in for themselves or a family member, or needing to sell the property with vacant possession).
This means that landlords who grant such tenancies need to rely on one of the eighteen statutory grounds to recover possession of a let property. The grounds reflect the fact that a landlord’s circumstances might genuinely change – for example, the landlord may have been renting property in another city for work and then takes a new job in the city where the let property is, or is living with a partner in a property owned by that partner and then the relationship breaks down. Such a landlord will need somewhere to live and – despite any upheaval for the tenant(s) who currently live there – the let property might well be a much more viable place for the landlord to stay than buying or renting another property. Alternatively, a landlord’s sibling might need accommodation in the area and have nowhere else to stay. In these and other circumstances, the landlord can approach a tribunal for an order to evict the tenant(s).
In non-Covid-19 times, some of these grounds are mandatory; that is to say, if established at the relevant tribunal, the tenant must leave. The other grounds are discretionary, and will only apply where the tribunal is satisfied that it is reasonable to grant the order. This post will proceed as if we are indeed in a non-Covid-19 world and not consider the emergency rules introduced during the pandemic. For information, those emergency rules rendered all mandatory grounds into discretionary grounds, this preventing compulsory upheaval from a home.
Assuming a ground for possession exists and has been notified to the tenant, the tenant might be obliged to vacate the premises through subsequent eviction proceedings at the First-tier Tribunal (Housing and Property Chamber), or the tenant may simply move out without awaiting a tribunal order. If a (now former) landlord did indeed have a valid ground for possession, that would be the end of the matter, but what happens if a landlord did not have a genuine reason for recovery of possession, but pretended that they did?
Where it transpires there was no ground for possession after all, the 2016 Act allows a (now former) tenant to apply to the First-tier Tribunal for something called a wrongful-termination order. Where a WTO is made, the former landlord can be ordered to pay the former tenant a penalty sum up to six times the monthly rent that was payable.
Analysis of existing WTO rulings
How do WTOs work in practice? Or rather, is the system working in practice? That is what the aforementioned article in the Juridical Review is about. The article looks at the emerging WTO tribunal jurisprudence, and argues that former tenants are facing significant hurdles in terms of unlocking this remedy.
To date, there have been 21 applications for a WTO. Only three have been successful (resulting in penalty awards against the former landlord of three times the monthly rent in two cases, and one times the monthly rent in the other).
Those cases are highlighted in the article, but of more interest are the WTOs that got away. The reasons for the eighteen unsuccessful applications are discussed in the article in some detail. A quick overview is provided here.
Some applications may have been procedurally unsound and as such there is not too much to say about those. If the application has not been properly made or the tribunal needs information and has not been provided with that, such applications cannot proceed. There is a separate access to justice point about whether legal aid thresholds are such that applicants are not able to access professional support to frame and present their applications properly. I will gloss over that here, save to note that the Scottish Legal Aid Board’s website states that anyone applying for legal aid in relation to a private sector tenancy action where a sum of less than £3,000 is at issue needs to detail “why it is considered reasonable for legal aid to be made available notwithstanding the comparatively low value of the claim.” This means anyone seeking a WTO in relation to a property that had a monthly rental of less than £500 will need to make a special argument to unlock legal aid.
Some applications have failed because the tribunal was happy enough with the landlord’s explanation of what happened (for example, a family member had been planning to move in but that did not happen after all), and again there is not so much that can be said about those cases. Were WTOs to apply automatically, that could be unfair on a landlord who had set a plan in motion when that plan was later foiled by external factors. This is even recognised in the explanatory notes for the legislation, giving the example of a landlord who planned to sell a formerly let property but failed to do so after a year on the open market and then re-letting the property for income to meet mortgage payments.
That leaves the cases where former tenants have not been able to obtain a WTO because the former landlord did not serve papers that amounted to a formal notice to leave in terms of the 2016 Act. The tribunal has been fastidious in requiring this, because this is, apparently, what the legislation says. The effect of this interpretation is to deny WTOs to tenants who have been sent emails, text messages or WhatsApp messages instead of proper notices to leave and acted on those representations rather than await more formal correspondence. For reasons explained in the paper, Peter Robson and I think this is unfortunate. There have also been some observations to the effect that tenants who moved out of a property without awaiting full completion of formal tribunal processes cannot access WTOs, and again this strikes us as unfortunate.
Lastly, the paper also notes the interaction of wrongful-termination orders and the older route to damages for unlawful eviction of a residential occupier under the Housing (Scotland) Act 1988. We think this requires consideration, to ensure those who have been faced with dubious conduct by a former landlord do not fall between the cracks. This has happened with at least one case.
If you are interested in hearing or reading a bit more about this, further analysis of this topic is available. One further resource is an episode of the PropertyCon Podcast, the other is the article itself.
Starting with the podcast episode, Professor Bram Akkermans of Maastricht University has recently started a podcast called PropertyCon. In Episode 6 of the PropertyCon Podcast he interviews the author of this post and the WTO issue forms the basis of the discussion.
The article itself can be found at page 88 of the 2021 Juridical Review. For those unable to access the piece on Westlaw or through Thomson Reuters’ Proview service, there is a short embargo period before we can make an open access version available (via the University of Strathclyde’s academic repository).