In this significant judgement, the Upper Tribunal (UT) considered the interpretation and scope of the discretion introduced to the ground for eviction where the landlord intends to sell the property.

This decision has wider application for the correct approach to assessing reasonableness by the First Tier Tribunal (FtT) given that discretion now applies to all grounds for eviction from Private Residential Tenancies (PRTs) as a consequence of the Coronavirus (Recovery and Reform) (Scotland) Act 2022, which made permanent the temporary measures put in place during the pandemic.

Caroline Manson and David Downie were tenants of a property owned by Mr and Mrs Turner. Mr and Mrs Turner applied to the FtT for an order for eviction under Ground 1 of the Private Housing (Tenancies) (Scotland) Act 2016, which states:

“(1) It is an eviction ground that the landlord intends to sell the let property.

(2) The First-tier Tribunal may find that the ground named by sub-paragraph (1) applies if the landlord—

(a) is entitled to sell the let property,

(b) intends to sell it for market value, or at least put it up for sale, within 3 months of the tenant ceasing to occupy it [F3, and

(c) the Tribunal is satisfied that it is reasonable to issue an eviction order on account of those facts.”

Before the FtT, it was not in dispute that Mr and Mrs Turner intended to sell the property. Ms Manson and Mr Downie defended the proceedings on the basis that it was not reasonable to issue an eviction order. The FtT found in favour of Mr and Mrs Turner and granted the order for eviction, but postponed enforcement of the order for four months to allow Ms Manson and Mr Downie some time to find alternative accommodation.

The tenants appealed the decision to the UT on various grounds (the outcome of which was reported in SHN’s sister publication Scottish Legal News on 5 December 2023). This article will focus on the significance of the UT’s decision in relation to the correct approach to assessing reasonableness specifically in relation to ground 1 and the wider application of the decision.

Meaning of “On account of those facts” in test of reasonableness

A preliminary matter raised by the landlord respondents in the course of the appeal related to the construction of the phrase “on account of those facts” within sub-paragraph 3 of Ground 1.

The respondents submitted that these words were unique to the 2016 Act and that was in contrast to the formulation of reasonableness set out in previous legislation, which merely stated that the decision to be made was whether it was reasonable to make the order.

The respondents’ position was that the introduction of the phrase “on account of those facts” narrowed the extent of the inquiry available to the Tribunal and that the tenants’ personal circumstances were irrelevant to the question of whether Ground 1 could be made out. The only question to be asked was whether the landlords’ intention to sell was reasonable.

This interpretation, if accepted by the UT, would have resulted in a significant departure in PRT cases from the historic approach to assessing reasonableness in eviction actions whereby all relevant facts and circumstances are taken into account and weighed in the balance by the decision maker. The argument if accepted would have therefore substantially weakened PRT tenants’ security of tenure.

The sheriff rejected the respondents’ submission and held that all relevant factors, including the tenants’ circumstances, should be taken into account:

“[It] is implicit in assessing whether taking a particular decision is reasonable that all available facts relevant to that decision are considered and weighed in the balance, for and against…formulating the question in this way [“on account of those facts”] does not of itself preclude the decision maker from having regard to other relevant facts. The respondents’ construction involves reading sub paragraph 2(c) as if words such as “and no others”, or “only”, had been added at the end. I am not prepared to imply such words in the absence of express provision.”

The sheriff additionally noted: “just because the landlord’s wish for possession is reasonable this does not mean that it will be reasonable to grant it”.

No presumption of primacy of property rights

The respondents provided an alternative submission that the words “on account of those facts” meant that particular weight should be given to the facts in sub paragraphs 2(a) and (b) in assessing reasonableness, i.e. the landlord’s intention to sell. They argued that it would be rare to find circumstances where it would not be reasonable to grant an eviction order to landlords who intended to sell their property, and that it would only be in exceptional circumstances that a Tribunal could refuse an eviction order in such circumstances.

Again, the sheriff rejected the respondents’ submissions. He commented: “[T]here is no presumption, as a matter of law, in favour of giving primacy to the property rights of the landlord over the occupancy rights of the tenant, or vice versa”.

It was noted that the ‘reasonableness’ test in Ground 1 was inserted by the Coronavirus (Scotland) Act 2020. Prior to this, Ground 1 had been mandatory, requiring the Tribunal to make an order if it found that the landlord was entitled to sell the property and intended to do so, regardless of the tenant’s circumstances. The amendment to Ground 1 to include the reasonableness changed this, and the tenants’ circumstances as put to the First-tier Tribunal should now be taken into consideration. The sheriff noted: “The introduction of the reasonableness requirement into ground 1 gives a measure of security for tenants. The grant of an application for an eviction order is no longer automatic, in fact or law.”

The sheriff further held that “there is no presumption in favour of granting an eviction order in a ground 1 case but postponing its having effect, rather than refusing it and leaving it open to the landlord to make a renewed application in future.”

The decision whether or not to postpone or refuse an order is a matter of discretion for the First-tier Tribunal, and is an important clarification by the UT.

The Upper Tribunal allowed the appeal and remitted the case to a freshly constituted panel of the First-tier Tribunal to consider the application of new.

A welcome decision for tenants

The Upper Tribunal’s decision gives tenants of PRTs reassurance that the FtT should take into account their own circumstances when considering if it is reasonable to make an order for eviction. This is a welcome decision for PRT tenants, clarifying that the exercise of discretion by the FtT is broad and must take into account all relevant and available facts both for the landlord and the tenant, and is not limited to the facts specified in the ground for eviction.

The clarification that there is no presumption in favour of the property rights of the landlord will be similarly welcomed by tenants. The respondents’ interpretation – had it been accepted - would have limited the impact of the introduction of discretion to this ground.

The appellants were represented by David Anderson, advocate, instructed by Shelter Scotland. The respondents were represented by Neale Tosh, advocate, instructed by Bannatyne Kirkwood France & Co.