|Draft Legislation- Rent Freeze and Eviction Ban in the Private Rented Sector|
The Scottish Government have now published the Bill designed to introduce the rent freeze and eviction moratorium announced in the Scottish Parliament by the First Minister in early September.
The Cost of Living (Tenant Protection) (Scotland) Bill was debated in Parliament yesterday and is expected to become law as the Cost of Living (Tenant Protection) (Scotland) Act 2022 very shortly.
The Bill extends to some 40 pages and it will make amendments to a number of different existing Acts which apply throughout the residential tenancy sector, both in the public and private sectors.
What does this bill propose for the private rented sector?
The Bill proposes numerous changes to the Housing (Scotland) Act 1988 and the Private Residential (Tenancies) (Scotland) Act 2016 which sets out most of the current laws on rent increases and evictions.
The Bill proposes to introduce a rent cap for all private sector tenancies and to introduce new protections against evictions for tenants.
The purpose of this is to give a brief explanation of the proposals as they affect the private rented sector.
The Rent Cap Private Residential Tenancies The proposed rent cap will apply in respect of a rent increase notice served on or after 6 September 2022 until the rent cap provisions are terminated. At present the plan is that these provisions will remain in force until 31 March 2023 but they could be extended beyond that date.
The impact of the rent cap is that any rent increase notice served while the rent cap is in force will have no effect subject to the following exception.
Landlord who are experiencing increased costs such as an increase on the interest payable on a mortgage or service charges, can apply to the rent officer to increase the rent in order to recover a maximum of 50% of these increased costs subject to a maximum of 3% increase of the existing rent.
(b) Assured and Short Assured Tenancies
The provisions proposed under the assured and short assured tenancy regime are the same as under the Private Residential Tenancy in terms of the capping of rent where the tenancy is a statutory assured/short assured tenancy. However, contractual rent increases remain permissible.
The Eviction Moratorium
The Bill also sets out the Government’s proposals in connection with the proposed eviction moratorium. The impact of the Bill will apply to: Any eviction order granted in respect of Tribunal proceedings raised after the Bill comes into force and Any eviction order granted in Tribunal proceedings raised prior to the Bill coming into force based on eviction notices served on or after 6 September 2022. The impact of the Bill on any such order will prevent the enforcement of the order for a period of six months starting on the day in which the eviction order is granted. If the provisions of the Bill are removed prior to the end of that six-month period the orders will become enforceable immediately.
What about existing actions and Notices already served?
The Bill does not appear to have any impact on Tribunal proceedings which have been raised prior to 6 September 2022. Eviction orders granted in such actions will be enforceable in the usual manner.
It also appears that the restrictions on eviction will not apply to any action raised before the Bill comes into force if the eviction notice was served prior to 6 September 2022.
Eviction on Certain Grounds
The Bill also contains provisions which will continue to allow evictions on certain grounds even during the eviction moratorium.
In terms of the PRT, evictions will still be permitted on the antisocial grounds, namely Ground 13 (criminal conviction) and Grounds 14 and 15 (antisocial behaviour). Eviction will also be permitted where Ground 10 is used (tenant not occupying the property).
In terms of the assured tenancy regime, evictions will still be permitted under Ground 15 which relates to convictions for certain offences and antisocial behaviour.
New Grounds for Eviction
The following new grounds are proposed which will be exempt from the moratorium:
Private Residential Tenancies:
Paragraph 1A (intent to sell property to alleviate financial hardship)
Paragraph 4A (intent to live in property to alleviate financial hardship)
Paragraph 12A (substantial rent arrears),
Assured/Short Assured Tenancies:
Ground 1A (intent to live in house to alleviate financial hardship)
Ground 8A (substantial rent arrears)
What amounts to substantial rent arrears?
The tenant requires to have accrued rent arrears of an amount totalling six months’ rent when notice is served.
We appreciate that these proposed changes are complex and difficult and that there will be many questions arising from this Bill.
Please note that the provisions set out above may be altered as the Bill proceeds through the Parliamentary processes. We will provide further updates.
We hope that this explains briefly the proposed changes but TC Young are happy to answer any queries and invite you to contact their PRS Team.