After Sale Shared Equity Procedures

10. Grant of tenancy

Shared equity owners are no longer permitted to let their property under any circumstances, including as a holiday let, for Bed & Breakfast accommodation or letting a room to a lodger. Previously permission to let was given for limited periods in exceptional circumstances. However, following short assured tenancies being replaced by the private residential tenancy ("PRT") in terms of the Private Housing (Tenancies) (Scotland) Act 2016, landlords are no longer able to provide for the tenancy to run for a limited period of time, since a key aspect of PRTs is that, once created, they continue without limit of time and landlords can only recover vacant possession if either (a) the tenant gives notice of their intention to leave or (b) certain grounds exist which justify an eviction order. This means that letting for short periods is not compatible with the new legislation, and so Scottish Ministers have decided that they will no longer grant any further permission to let.

Where previous permission to let was granted, and has now come to an end, no further permission to let will be granted. Copy correspondence to be sent to owners and their agents in relation to this is set out in Annex 5(A).

If it is found that a shared equity owner is letting their property, the owner should be contacted by the RSL and informed that they are in breach of their Shared Equity Agreement and the RSL should contact Scottish Government to recommend that Scottish Ministers' solicitors are instructed to take enforcement action. At the same time, the RSL should confirm to the owner other options which are open to them such as selling the property or increasing the equity stake to discharge the Scottish Ministers security.

Serving armed forces personnel

The only exception to the above rule on permission to let is for serving armed forces personnel. Permission to let can be granted for serving armed forces personnel. The property will be permitted to be let only when necessary, for example, when posted away from home for an extended period of time. Permission to let will only be valid whilst the owner continues to serve in the armed forces. When an armed forces personnel wishes to let their property out the RSL should send a copy of the letter/email set out in Annex 5(B) together with the form in Annex 5(C).

Armed forces applicants for permission to let should be made aware that all new tenancies created on or after 1 December 2017 must be a PRT, the terms and conditions of which are as described in the Private Housing (Tenancies) (Scotland) Act 2016. This includes that tenancies are open-ended, with no fixed-term period and no end date. A landlord can use one of the 18 new modernised grounds for repossession which are detailed here. One of these grounds is 'The Landlord intends to live in the let property'.

Should the tenant refuse to leave the property at the end of the relevant notice period, the landlord would need to apply to the First-tier Tribunal for Scotland (Housing and Property Chamber) for an eviction order and be required to provide evidence to the Tribunal that they intend to move back to their let property. Guidance for landlords on ending a tenancy is available on the mygov.scot website at: https://www.mygov.scot/ending-a-tenancy-as-a-landlord/private-residential-tenancies/