How can you sign up to new Scottish Secure tenancy agreements during the Covid-19 lockdown?

GRANTING NEW SCOTTISH SECURE TENANCIES

When lockdown initially came into effect most Registered Social Landlords (RSLs) – rightly – took the decision to suspend the allocation of new tenancies due to the practical hurdles in granting these and the need to prioritise the delivery of front line services for tenants. In addition, mutual exchanges, assignations and sub-lets were suspended. 

However, as lockdown has progressed it has become clear that there may be a need to grant new tenancies in order to meet an increasing demand for emergency accommodation for those in housing need. This has been reflected in the Scottish Government's updated non-statutory guidance on allocations for the housing sector which sets out practical guidance on how RSLs might make void properties available to new tenants in emergency situations.

The Scottish Government's overarching guidance is that new renters / buyers should, where possible, delay moving into a new property whilst stay-at-home measures remain in place to tackle covid-19. Accordingly, RSLs should put policies in place which clearly outline (i) in which circumstances it will be deemed necessary to grant new tenancies i.e. emergency accommodation; and (ii) what steps RSLs will be required to take to ensure new tenancy home moves are compliant with social-distancing measures.

This guidance does however raise the significant question of whether it is possible to have a tenancy agreement properly signed as part of the tenancy set up.

TENANCY SIGNING – LEGAL REQUIREMENTS 

The vast majority of tenancy agreements granted by RSLs will be either full Scottish Secure Tenancy Agreements (SST) or Short Scottish Secure Tenancy Agreements (SSST) so this note relates specifically to these tenancy agreements. Separate advice should be sought if you are considering granting an occupancy agreement or if a subsidiary is considering granting a Private Rented Tenancy for a new mid-market rental.

For SST/SSST the legal requirements are:

• tenants have the right to a written tenancy agreement so they need to be given an actual document at the start of their tenancy agreement which sets out the terms and conditions of the tenancy
• the tenancy must be properly signed or authenticated by both the landlord and tenant2 and must satisfy the Requirements of Writing (Scotland) Act 1995

Requirement of Writing (Scotland) Act 

So, what are the requirements for tenancy signing under this legislation?

• the tenancy must be a traditional written document or an electronic document (see more on this below) 
• the tenancy must be signed by each party to the agreement – this means both the tenant and landlord must sign the agreement and in the case of a joint tenancy each of the joint tenants must sign

An SST or SSST which complies with these requirements will be legally binding and can be relied upon for any future court action.

What is interesting is that in order to be a valid contract between the tenant and the RSL the SST/SSST only requires to be signed by the parties – it is not essential that it is witnessed for it to be a legally binding agreement.

SELF PROVING TENANCY AGREEMENT

Whilst the model SST and SSST do provide for the signatures of both the landlord and tenant to be witnessed as stated above this isn't actually an essential requirement to create a legally binding contract. Having the signatures witnessed means the agreement is self-proving.

If the signatures are witnessed then the tenancy agreement will be deemed to have been appropriately signed and there is very limited scope for the tenant to argue that they didn't sign the agreement so didn't accept the obligations set out in the agreement. A self-proving tenancy agreement puts the RSL in the best position for any future disputes or potential court action based on the tenancy agreement but it is not essential to create a legally binding contract between the RSL and the tenant.

So, what are the practical options in this lockdown situation for having tenancy agreements signed if the situationmeets the Scottish Government guidance on allocation of emergency accommodation?

SIGNING BY RSL AND TENANT

As stated above all that is legally required to create a binding tenancy agreement is for the written tenancy agreement to be signed by the RSL and the tenant. The Scottish Government guidance includes an interesting 'contactless protocol' from a Welsh Housing Association which involves the tenancy agreement being left in the property, the tenant viewing the property and if they want to accept the offer of the tenancy they telephone the housing officer who can talk through the terms of the tenancy. If acceptable the tenant signs the agreement, leaves this in the property and the housing officer then attends the property to collect the signed tenancy agreement. The agreement can then be signed by the landlord to create the legally binding agreement.

This allows for social distancing and both the tenant and housing officer can wear appropriate PPE if appropriate. It allows the tenant to view the property and there is time for the terms of the tenancy to be explained and the tenant can ask for clarifications and the end result would be a signed tenancy that complies with the legal requirements however there are practical challenges as the RSL has to ensure that the property can be made available for viewing and that social distancing requirements are met by both the tenant and housing officer in attending the property. Both the tenant and housing officer also have to be comfortable with a 'real life' viewing.

This would however allow for both parties to sign the document to create a legally binding tenancy agreement but it would not be self-proving so there would be scope for a tenant to argue in the future that they did not actually sign as no-one is able to act as a witness to confirm they saw them sign the agreement. This would not necessarily be fatal to an RSL establishing that there is a legally binding tenancy in a future dispute but should be borne in mind.

WITNESSING

Having the signatures witnessed is definitely more challenging during lockdown given social-distancing requirements but could be achieved in the above scenario if there is a member of the proposed tenant's current household who is not going to be a party to the new tenancy. They could attend the viewing with the tenant and act as a witness to their signing of the tenancy agreement.

Likewise for the RSL the housing officer could sign the agreement when they return to the office with a fellow employee witnessing this from a safe distance. It is not necessary for the tenant and the RSL to sign at the same time or place, but whoever acts as witness should sign as soon as possible after seeing the party sign the document. If this can be achieved whilst complying with social distancing this would result in a tenancy agreement which is both legally binding and self-proving but careful consideration should be given to this approach given the current guidelines and the desire of RSLs to safeguard the health and safety of both tenants and staff.

One potential solution to the challenge of having another person present to view the signing and to act as a witness put forward in the Scottish Government guidance is the potential to witness via video call. 

This is possible with the witness viewing the signature by the tenant or housing officer by video link (most likely via mobile phone) and then receiving the document by delivery/post/leaving in a safe place and signing it as a witness, adding their name and address as required. Given the novelty of having documents signed / witnessed this way, RSLs should record a file note at the time of signing / witnessing and follow this up with an email to the tenant which records the process.

The Law Society of Scotland are clear that, so long as the witness has seen all necessary signature via video link, when the document is returned to them, they can legitimately sign and complete the signing details and this would create a fully signed tenancy agreement which complies with legal requirements.

Electronic signature

Another possibility which has been raised is whether the entire SST/SSST could be signed electronically?

Since lockdown began more people are looking at ways to 'sign' documents electronically. Electronic signing can be as straightforward as adding a pdf or jpeg of a signature (useful for only the most straightforward of signings such as a standard letter) or the use of online signing platforms such as Docusign or Adobe Sign which make use of meta data to confirm the signature.

Unfortunately, because of the legal requirements set out above these most basic forms of electronic signing cannot be used for an SST/SSST. In order to have a valid electronic signature of an SST/SSST you would need to make use of an advanced electronic signature or a qualified electronic signature. Both of these require a far more advanced platform most commonly linked to digital encryption and often using a smart card and as such it is unlikely that any RSL has this already in place.

Whether this is something that RSLs will look to set up in the future based on experiences during this lockdown remains to be seen.

Practical Solutions

So, the question remains, can a valid tenancy be signed during this lockdown period? 

The answer would appear to be yes if you are able to make the practical arrangements similar to those set out in the Scottish Government guidance to allow the tenant and a housing officer to sign an actual tenancy agreement.

If there are challenges around having witnesses actually present to sign at the same time you can forego the requirement to have the signatures witnessed and would still have a legally binding agreement – it just wouldn't be self-proving. Alternatively you can make use of video witnessing with the witness signing at a later date.

However, what if neither of these are possible but the RSL still wishes to make accommodation available to those in emergency housing need and what are the risks of not having a tenancy agreement signed in advance?

In this situation there would be a strict breach of the legislation in not having a validly signed, written tenancy agreement in place but the risk of legal challenge on this would seem remote. More likely is the possibility of the tenant breaching the tenancy at some point in the future. Having a fully signed tenancy puts the RSL in the best position to show that there is a valid tenancy in place and what the terms and conditions of that tenancy are in order to establish the breach. There are risks in not having this but there are practical steps an RSL can take to put themselves in the best possible position in the current situation:

• even without a written tenancy agreement if the tenant moves into the property and pays rent then there is an implied tenancy agreement
• as an RSL can only grant an SST/SSST (unless one of the statutory exemptions apply) then any implied tenancy would have to be an SST/SSST which would mean that all of the statutory terms for this would apply. However, the contractual provisions normally included in the tenancy agreement would not.
• prior to the tenancy beginning the RSL should send (by post or more likely by e-mail) the tenant a copy of the tenancy agreement and the usual summary and clearly states that the tenancy is being offered on these terms and conditions, they can allow the proposed tenant an opportunity to ask questions/clarify the terms before responding to confirm that they are accepting the tenancy on this basis. The covering letter / email should explain that the usual process for signing up to a new tenancy has been dispensed with as a result of covid-19. Where possible, RSLs should try to have prospective tenants confirm in writing (by letter or email) their express agreement to dispensing with physical signing/ witnessing in the circumstances.
• Clear wording would be needed in the above mentioned scenario. We would advise considering this as a practical solution on a case by case basis. RSLs should contact us to review any wording contained in covering emails / letters prior to them being sent to the prospective tenant. This sort of practical solution has not yet been tested by the courts and there is a risk of the tenant pleading ignorance to the tenancy's terms later down the line if no signed agreement is in place. Therefore, in order to minimise this risk, it will be important to obtain as much written evidence as possible (letter or email) from the tenant which confirms their consent to the copy agreement.
• as soon as possible after lockdown the RSL should seek to have a written tenancy put in place signed by both the tenant and landlord, with a view to the written tenancy having retrospective effect.

SUMMARY

So, in summary, it is still possible for RSLs to grant new tenancies but not in the usual way so we would recommend:

• any new tenancies being considered should comply with the most recent Scottish Government Guidance on Allocations for the Housing Sector
• you should consider how you are able to have a tenancy agreement signed whilst complying with social distancing requirements
• you should consider whether you will require signatures to be witnessed at the current time
• you should ensure that tenants still receive an explanation of the main requirements and obligations under the tenancy agreement and provide them with the usual summary/tenants' handbook and any other supporting document that would normally be issued to a new tenant and ensure they have an opportunity to ask any questions
• if it is not possible to have the tenancy agreement signed in advance ensure records are kept of the communication with the tenant and in particular ask for clear confirmation that they accept the terms and conditions of the tenancy. Try to have the written tenancy agreement signed as soon as possible once restrictions are lifted
• you may want to put in place a new emergency policy/protocol on the signing of new tenancies during lockdown particularly if you are likely to have a number of properties available for emergency accommodation.
• above all ensure you prioritise the health and safety of your staff and tenants

Please contact us if you would like more specific advice on any proposed arrangements you are entering into at this time.