The Act came into force on 28 October 2022 and is expected to be in force until at least 30 September 2023 With the agreement of parliament the legislation can be extended beyond this date to 31 March
The Act introduces restrictions on rent increases and evictions during the time it is in force. The way these restrictions operate is set out below.
Restrictions on rent increases
For the period 6 September 2022 to 31 March 2023 a cap of 0%, termed the “permitted rate”, applies to most rent increases.
For rent increase notices issued from 1 April 2023 the permitted rate will be set at 3%. To increase rents by this amount landlords must wait until 1 April 2023 to issue the rent increase notice. For tenants on a PRT the notice period is 3 months so the increase can’t come into force until July 2023. Any rent increase notices issued prior to 1 April 2023 are capped at 0% and therefore voided by the current legislation, even if they come into force after 1 April 2023.
There are some limited circumstances in which rent increases above the permitted rate can still take place. These are set out below:
• Landlords are permitted to raise the rent by any amount between tenancies – it is only mid tenancy increases which are affected by the rent increase restrictions.
• Rent increase notices issued for any tenancy type prior to 6 September 2022 are permitted to come into force at the end of the notice period.
• For assured/short assured tenancies which have rent increase clauses within the contract, rent increases are permitted to take place to whatever amount is permitted in the lease (if the rent increase clause in the lease has no formula for calculating the increase then the rent can be increased to the open market rental value)
• Landlords can apply for an increase of up to 3% to cover increases in prescribed property costs.
This figure will rise to 6% for applications made on/after 1 April 2023. For details on this see below.
Increases in prescribed property costs
Landlords can apply to the rent officer to increase the rent by more than the permitted rate in order to recover up to 50% of the increase in any prescribed property costs incurred by the landlord in the 6 months prior to the application being made.
Prescribed property costs are:
• mortgage/standard security interest;
• insurance premiums (not general buildings/contents insurance premiums); and
• services charges paid by the landlord which the tenant is responsible for under the tenancy.
The maximum increase in rent permitted through this mechanism is currently 3%. This will be increased to 6% for applications made on/after 1 April 2023.
The rent increase comes into force 3 months and a day after the landlord issued notice to the tenants of
the proposed increase.
Restrictions on evictions
Landlords can serve notice as normal if they wish to end a tenancy. Most tenants leave during the notice period and in these cases the eviction restrictions will not have any effect.
If the tenant doesn’t leave during the notice period the landlord can apply to the tribunal for an eviction order as normal. However, the legislation delays a landlord from enforcing an eviction order issued by the tribunal in some circumstances for up to 6 months.
Tribunal eviction applications which commenced before 28 October 2022 are unaffected if notice was served on the tenant prior to 6 September 2022. Eviction orders issued can be enforced by sheriff officers as normal.
Where evictions are affected by the restrictions eviction orders issued by the tribunal cannot be enforced until the restrictions are lifted or the order has been in force for 6 months (whichever is sooner), unless the order is granted are on an exempt ground.
Private Residential Tenancy (PRT) evictions are exempt if the eviction is for criminal or anti-social behaviour, lender repossession, abandonment, employment with landlord ceasing or new grounds which the legislation adds to the PRT regime, namely 1A (intent to sell to alleviate financial hardship), 4A (intent to live in property to alleviate financial hardship) or 12A (substantial rent arrears – 6 months or more at point notice is served). The notice period for 12A is 28 days. The notice period for 1A and 4A
is 84 days if the tenant has been in the property for more than 6 months and 28 days if the tenant has been in the property for 6 months or less.
Assured/short assured tenancy evictions are exempt if the eviction is for criminal or anti-social behaviour, lender repossession, employment with landlord ceasing or new grounds which the legislation adds to the PRT regime, namely 1A (intent to live in property to alleviate financial hardship)
or 8A (substantial rent arrears – 6 months or more at point notice is served).Both these grounds require 2 months’ notice.