Tenancies that cannot be regulated

There are some tenancies that are excluded from being regulated tenancies.

This content applies to Scotland

Tenancies granted on or after 2 January 1989

This date marks the beginning of the assured tenancy regime. It has not been possible to create new regulated tenancies under the Rent Act (Scotland) Act 1984 ('the 1984 Act') since this date. However, there are exceptions and in certain transitional cases the new tenancy may still be regulated. [1]

Tenancies with high rateable value

Certain valuable properties have been removed from the regulated regime. The rules about this are quite technical.

There are two stages to working out whether a tenancy is exempt under this heading;

  • Firstly by establishing the correct financial sum;

  • then the appropriate date.

The basic rule is - If the rateable value of the accommodation exceeds the financial sum on the appropriate date, the tenancy cannot be regulated.

First, in order to establish which financial figure to work with, it must be established whether the property had its rateable value first registered on the valuation roll before 1 April 1978 or on/after 1 April 1978. If it was before, the figure to work with is £200. If it was on/after 1 April 1978, the figure is £600. [2]

The second stage is to establish which 'appropriate day' to work with. Where the property had a rateable value on 23 March 1965, the appropriate day is 23 March 1965. Where a Crown tenancy, granted before 1 December 1980, subsequently became a regulated tenancy because it was passed into the management of the Crown Estate Commissioners, the appropriate day is 1 December 1980. In all other cases, the appropriate day is the day on which a rateable value was first shown on the valuation roll. [3]

Tenancies at low rent

Where no rent is payable, a regulated tenancy does not exist. [4] Also, where the rent paid is less than two-thirds of the rateable value on the appropriate day [5]

Resident landlords

This exemption only applies to tenancies granted on or after 1 December 1980. [6] Where the tenant and landlord have occupied dwellings within the same building at the grant of the tenancy and for the entire duration of the tenancy, the tenancy will not be regulated. This exception does not apply where the landlord and tenant occupy separate flats in a purpose built block of flats. [7] However, McAllister states, "it does inadvertently apply where they occupy separate flats within a dwelling house that has been converted into flats. This loophole has been plugged in relation to assured tenancies". [8]

Unlike the similar exemption under the assured regime, there is no requirement for the landlord to have occupied the accommodation 'as her/his only or principal home'.

There are technical rules about situations where another person buys the landlord's interest and where the resident 'landlord' is actually a person with a liferent over (or right of fee in) the accommodation, [9] rather than being the owner of the property.

Advisers are unlikely to come across rights in liferent and fee very often. They are particular forms of property right under Scots law. An example of such rights being created is where someone dies and leaves a will that gives the spouse the right to use certain property for the duration of the spouse's life (a liferent). At the same time, the will can give a right to another (for example, a child) to become the full owner of the property on the death of the liferenter. This is called a right in fee. [10]

Rent includes board and/or attendance

The tenancy is not regulated if the rent includes payments for board or attendance. [11] If any board is provided, the tenancy is exempt. The provision of a single meal can amount to board. [12] Providing cafe vouchers or boxes of groceries is not, however, sufficient. [13]

"Attendance" means "personal services such as cleaning or laundry services" [14]. In the case of attendance, the amount of rent attributable to it must form a "substantial part of the whole rent". [15] Where attendance is not a substantial part of the rent, then there will be a regulated tenancy.

Tenancies granted before 2 January 1989 that are exempted under this heading nevertheless enjoy a limited security of tenure under Part VII of the Rent (Scotland) Act 1984.

Dwelling house let with land

Where a dwelling house is let with land exceeding two acres it is exempt from the regulated regime. [16]

Student lettings

This only exempts tenancies where the student is renting accommodation from their educational establishment. [17] It does not apply to students who rent from other parties such as private landlords. Most educational establishments come under this exemption. They have been detailed in statutory instrument [18] and cover universities, further education colleges, and so on. This exemption will apply even if the educational establishment is itself the tenant of a private landlord and is subletting to one of its students.

Holiday lettings

If the purpose of the let is for a holiday, [19] there can be no regulated tenancy. Given the fact that, since 1989, regulated tenancies have been in the process of being phased out, this exemption is now effectively obsolete.

Tenancy of a shop

Where the Tenancy of Shops (Scotland) Act 1949 applies to a tenancy, [20] the tenancy cannot be regulated.

Licensed premises

This applies to anywhere that sells alcohol for consumption on the premises, [21] so therefore includes restaurants, hotels, wine bars, and so on, but excludes off-licences. This provision would not, for example, prevent a publican letting a flat above a pub on a regulated tenancy.

Crown tenancies

If the property belongs to the Crown or a government department, [22] the tenancy cannot be a regulated tenancy. However, this exemption does not apply where the Crown Estate Commissioners are managing the property.

Public sector, housing association and housing cooperative tenancies

Where the landlord is one of a number of public sector bodies, [23] the tenancy cannot be regulated. They are as follows:

  • local authority

  • development corporation

  • Housing Corporation

  • Scottish Homes

  • housing trust

  • urban development corporation

  • housing association

  • housing cooperative.

Last updated: 29 December 2014

Footnotes

  • [1]

    s.41 Housing (Scotland) Act 1988; see also Milnbank Housing Association Ltd v Murdoch and Howie [1994] SCLR 684

  • [2]

    s.1(1)(a) Rent (Scotland) Act 1984

  • [3]

    s.7(3) Rent (Scotland) Act 1984

  • [4]

    s.2(1)(a) Rent (Scotland) Act 1984

  • [5]

    s.7(3) Rent (Scotland) Act 1984

  • [6]

    s.6(1) Rent (Scotland) Act 1984

  • [7]

    s.6(1)(a) Rent (Scotland) Act 1984

  • [8]

    para. 15.74, McAllister A, 'Scottish Law of Leases', 3rd Edition, 2002; sch.4 para 9(1)(c) Housing (Scotland) Act 1988

  • [9]

    For a discussion of liferents, rights in fee and succession, see MacDonald, 'Succession', 2nd edition, W. Greens & Sons

  • [10]

    For a discussion of liferents, rights in fee and succession, see MacDonald, 'Succession', 2nd edition, W. Greens & Sons .

  • [11]

    s.2(1)(b) Rent (Scotland) Act 1984

  • [12]

    Holiday Flat Co. v Kuczera, [1978] SLT (Sh Ct) 47; Otter v Norman [1988] 2 All ER 897

  • [13]

    Gavin v Lindsay [1987] SLT (Sh Ct) 12

  • [14]

    para. 15.73 McAllister A, 'Scottish Law of Leases', 3rd Edition, 2002

  • [15]

    s.2(4) Rent (Scotland) Act 1984

  • [16]

    s.2(1)(e) Rent (Scotland) Act 1984

  • [17]

    s.2(1)(c) Rent (Scotland) Act 1984

  • [18]

    Protected Tenancies (Exceptions) (Scotland) Regulations 1974 SI 1974/1374 and the Protected Tenancies (Further Exceptions) (Scotland) Regulations 1982 SI 1982/702

  • [19]

    s.2(1)(d) Rent (Scotland) Act 1984

  • [20]

    s.10(2) Rent (Scotland) Act 1984

  • [21]

    s.10(1) Rent (Scotland) Act 1984

  • [22]

    s.4(1) Rent (Scotland) Act 1984

  • [23]

    s.5(1)-(2) Rent (Scotland) Act 1984, as amended by sch.13 Local Government etc (Scotland) Act 1994