From 28th October 2022 the Cost of Living (Tenant Protection)(Scotland) Act 2022 is now fully in force. What exactly does this mean for private and social sector landlords?
The two key areas which are affected by the 2022 Act are:-
- a rent freeze; and
- eviction bans (also known as an eviction moratorium).
The provisions apply to private residential tenancies, assured tenancies, short assured tenancies, Scottish secure tenancies, short Scottish secure tenancies, student residential tenancies, protected tenancies (including short tenancies) and regulated tenancies under the Rent (Scotland) Act 1984.
The provisions are in place until at least 31 March 2023 but there is scope for this to be extended to 30 September 2023 and then thereafter 31 March 2024.
The Scottish Ministers have temporary powers to set a cap on the level of rent increases which is currently set at 0% until 31st March 2023. This level may be maintained or changed at the discretion of Scottish Ministers.
Therefore landlords are temporarily restricted from increasing the amount that can be charged on any existing residential tenancies (this applies to all notices served on or after 6th September 2022). Any rent increase notices served prior to 6th September 2022 remain valid.
However, the rent freeze restriction does not apply to new tenancies granted – landlords are therefore encouraged to review the market conditions prior to agreeing a new lease agreement.
Our experienced Leasing Department
can assist landlords in this respect.
The big question is - can landlords ask their tenants to vacate a let property?
The restriction on eviction does not apply to eviction orders granted by the Housing and Property Chamber (First Tier Tribunal) (‘the Tribunal’) before 6th September 2022 or orders obtained in applications lodged with the Tribunal before 28th October 2022.
There are also certain exemptions to the eviction ban where possession may be taken by a landlord regardless of when the eviction order was granted or an application for eviction was lodged.
Potential examples where a tenant can still be evicted during the moratorium are as follows:-
- Where a landlord wishes to sell the property to alleviate poverty;
- Where a landlord wishes to live in the property yourself to alleviate poverty;
- Where a tenant has accumulated substantial rent arrears (which equates to, or exceeds, an amount that is the equivalent of 6 months’ rent under the tenancy when notice to leave is given to the tenant on this ground);
- Where the property has been abandoned by the tenant;
- Where the tenant is no longer deemed to be an employee;
- Where the tenant has engaged in criminal or anti-social behaviour; or
- Where the property is intended to be sold by the lender;
It is vitally important that landlords therefore seek advice surrounding the reasons for terminating a lease and if any of these exceptions may apply.
Landlords can still serve the appropriate notices to terminate a tenancy and thereafter lodge an application for eviction at the Tribunal. We would encourage landlords to continue to proceed with Tribunal applications so that the order is ready to be enforced as soon as the restrictions are lifted.
The evidential hurdle of “reasonableness” remains in place for the landlords to overcome (this was a permanent addition made by the Coronavirus (Recovery and Reform) Scotland Act 2022). The Tribunal must be satisfied that it is reasonable to grant an eviction in the circumstances (which are assessed on a case by case basis).
Importantly, unlawful evictions (namely tenancies ended on an untruthful or incorrect ground) now see an increased penalty under the 2022 Act. Former tenants can receive compensation of between 3 and 36 month’s rent.
Therefore, it is pivotal that landlords obtain legal advice prior to serving appropriate termination notices and commencing any Housing Tribunal action
Reviews by Scottish Ministers
The Scottish Ministers require to carry out reviews of the rent freeze and eviction ban to make sure that the temporary measures are proportionate to the cost of living crisis in Scotland. The first review is due by 31st December 2022 and thereafter every 3 months until the new extension dates expire.
We will continue to monitor the situation closely.
If you wish to explore your options to terminate a lease agreement or take action against your tenant(s) at the Tribunal, please contact our Dispute Resolution Department.