How can Purpose Built Student Accommodation providers adapt to Scotland’s Coronavirus legislation?

End of term looms at universities and there is hope on the horizon with the roll-out of vaccines, increased testing capacity and “Christmas bubbles” to look forward to.

However, for all that it is clear that the consequences of the coronavirus pandemic will continue to be a dominant issue for some time.

One group frequently in the news and the subject of Scottish Government guidance is students and their accommodation, with student life not generally being conducive to social distancing whether in lectures or in student properties.

Amongst extensive guidance published to date the Scottish Government has granted statutory protections to students who have entered into certain tenancy agreements, and as a provider of purpose built student accommodation (“PBSA”), you may well be wondering what this means for you.

The Legal Position on student tenancies

The Coronavirus (Scotland) (No.2) Act 2020 (the “Act”) came into force on 27 May 2020 and creates certain “protections of the individual”.

Under the Act, students in PBSA benefit from a temporary right to terminate their tenancy agreement for a reason relating to coronavirus.

Where a student tenancy agreement was granted and the student took occupation before 27 May 2020 they can end the tenancy agreement by giving not less than 7 days’ notice.

In any other case, the student can terminate the tenancy on giving not less than 28 days’ notice.

How do I know if this applies to me as a landlord?

The Act applies to any tenancy:

1. which grants a right of occupancy to a student;
2. where the building in question has planning permission for use predominantly for housing students; and
3. if the landlord is an institutional provider of student accommodation (which includes where the property in question includes at least 30 bedrooms for let to students).

What are the conditions for tenancy termination?

The tenant is allowed to terminate the agreement for “a reason relating to coronavirus”. The Act does not specify what this actually means.

According to the website Student Information Scotland, a Scottish Government website for students, reasons relating to coronavirus “could include financial hardship caused by the epidemic, the cancellation of in person teaching, or because students have returned to their family home in accordance with government guidance on physical distancing.”

As this is a website managed by the Scottish Government, it provides a reliable impression of what was intended to be included in the scope of the provision.

The language used suggests that the examples given are not an exhaustive list.

Consequently, the threshold as to whether a student can terminate their PBSA tenancy agreement for “a reason relating to coronavirus” appears to have been set low.

How should landlords accommodate new Coronavirus measures?

Even though the measures aim to benefit students you must adapt your processes to account for the rights and understand what you need to do if you receive a notice.

The Act creates a strict test for a notice to be validly served. It must be in writing and it must provide sufficient notice, the period of which depends on the facts and circumstance of each student.

It is also not clear whether a notice must confirm “a reason relating to coronavirus”, and whether suitable evidence of that reason is to be provided.

Notices received may be open to challenge on technical reasons and each one is worthy of scrutiny to ensure compliance. Next steps will be determined from acceptance or otherwise of the notice.

Finally, it is worth bearing in mind that reputation is important and students are particularly effective communicators on social media.

The Act may impact on income in the short term, but cooperating with students during this human crisis may be beneficial in the long run.

Further legislation and guidance in this area is likely in 2021 either by extension of existing measures or novel ones as the pandemic and its effects continue, so being up to date and adaptable will be key.