Malcolm Combe: Are landmark laws failing those tricked out of their homes by landlords?
Scotland introduced a new private sector residential letting vehicle, known as the private residential tenancy (PRT), when the Private Housing (Tenancies) (Scotland) Act 2016 came into force in December 2017.
As part of that regime, a legal device was made available to those who had rented a property under a PRT where an opportunistic landlord 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). A new paper by Malcolm Combe and Peter Robson for the Juridical Review has highlighted some teething problems with WTOs since their introduction. This article by Mr Combe serves to highlight some of the issues.
The legal regime
Unlike the short assured tenancy, 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. This 18-point list includes grounds that relate to the landlord’s circumstances.
This means that landlords who grant PRTs need to rely on one of the 18 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.
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.
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 new paper 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.
At the time of publication, there had been 21 applications for a WTO. Of those, only three were 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). Three further applications for a WTO have since appeared on the FtT’s website. One of those was successful, resulting in the maximum penalty award (in that case, £3,900).
The first three successful cases are highlighted in the article, but of more interest are the WTOs that got away. The reasons for 18 unsuccessful applications are discussed in the article in some detail. An 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 rigorous 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 regrettable.
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.
The fact that some WTOs have been granted does at least demonstrate that they can apply when an eviction order has been obtained through subterfuge, and the law may even be quietly working to address a mischief through its operation in the background in relation to disputes that do not make it to tribunal (by way of landlords offering settlements to former tenants to stop them applying). It would however be a shame if the emerging treatment of the law surrounding WTOs causes confusion and consternation among those who actually apply for wrongful-termination orders, rather than give a new and additional remedy in situations where landlords are using the eviction grounds provided by the 2016 Act in an underhand way.
Malcolm Combe is a senior lecturer in law at Strathclyde University