Residential property
25 Mar 2020 News

Coronavirus and the Private Rented Sector

Update as of 25 March 2020

During Parliament on 24 March 2020, the First Minister reiterated that nobody should be evicted as a result of the coronavirus crises and indicated that that the intended legislative change would increase the three month arrear period, required for mandatory eviction, to six months.  Communities Minister Aileen Campbell reiterated that there should ‘be no evictions as a result of Covid’. She advised that the emergency legislation being prepared by the Government was intended to ensure that there can be no evictions from the private or social rented sectors for six months. Ms Campbell indicated that this would achieved by extending the notice period required for the majority of eviction grounds. Those notice grounds are either two weeks or two months for assured tenancies, two months for short assured tenancies and either 28 or 84 days for Private Residential Tenancies. This is being reported as a six month ban on evictions in both private and social rented sectors.

It is not quite accurate to describe the proposed changes as a ‘ban’ on evictions, rather it appears this will introduce additional pre-requisites for landlords to comply with before being able to initiate the eviction process. Landlords can still serve notice on their tenants, however they won’t be able to do much more than that for some time. Landlords who have already served notice can still apply for an eviction order, but again they won’t have a decision on that for months yet.

In the meantime, social landlords and local authorities have cancelled scheduled evictions. Local authority offices are closed which means that those who have been evicted may not have anywhere to go for homelessness support including temporary housing. Further, Sheriff Officers, who carry out evictions, are only to carry the most urgent work and must practice social distancing.

Private landlords should accordingly consider whether any scheduled eviction is of the utmost necessity. A situation where an eviction may be deemed urgent and necessary is if the tenant is known to have left and the property is urgently required to house someone else.

Landlord should also be aware that the 30 day appeal period will continue to run for any decision issued by the First Tier Tribunal in eviction, payment and tenancy sanctions cases prior to the shutdown. Orders cannot be issued before the end of the appeal period but will be issued by the Tribunal if no appeal is received. Accordingly any landlord who is considering appealing a decision should take urgent advice on doing so.

On 17 March 2020

The Scottish Housing Minister, Kevin Morrice stated that the Scottish Government was considering measures to prevent landlords from evicting tenants. On 18 March 2020 he issued an open letter to landlords seeking their support in ensuring tenants are not evicted due to financial difficulties arising from coronavirus.

The same day the Communities Minister, Aileen Campbell announced that a temporary change to the law would be introduced to allow tenants to be in rent arrears for up to six months without being evicted on the basis of those arrears. Under normal circumstances if the tenant is in arrears of at least three months, unless the arrears arise due to benefit issues, it is mandatory grounds of eviction in assured and private residential tenancies (“PRTs”)..

Where does this  leave private landlords and indeed tenants?  Evictions as a result of rent arrears already take an average of ten months from the first missed payment to the date of  eviction.  With the temporary law change, that is likely to rise to 13 months. In other words, if a tenant stopped paying their rent on 1 April 2020, the landlord would be unable to take action until 1 October 2020 and it is likely that they would not recover their property until May 2021.

Another key development in the housing market is the announcement from lenders that they will allow mortgage holidays of up to three months and a willingness to support customers experiencing issues with their finances. Landlords who may benefit from a mortgage holiday or other support should apply to their lender as soon as possible.  It is also important that landlords contact their tenants to gauge their financial situation in light of the implications of Coronavirus and what they can perhaps do to assist. Some tenants may still be working, but find themselves on reduced hours, while some may have lost their employment entirely.  Where possible, the benefit of a mortgage holidays should be passed on to the tenant through a rent reduction or rent holiday.

Another way in which landlords can support their tenants during this time is to encourage them to apply for Universal Credit and Statutory Sick Pay. Tenants who are already on benefits may be entitled to Discretionary Housing Payment.  Some tenants may also be eligible for support from the Scottish Welfare Fund.  

At the moment there are no proposed changes to other eviction grounds under the assured or PRT regimes.  However, as of 19 March 2020 all hearings before the First Tier Tribunal (Housing & Property Chamber) (“FTT”) have been postponed until at least 28 May 2020. Most of those hearings will not take place on 28 May as this is a date set in order to comply with legislation which means that any ongoing cases will be on hold for at least 10 weeks. Tribunal inspections or supervised access of tenancy properties is also postponed until further notice.

At the time of writing it is unclear when any hearings will proceed before the FTT. In practical terms cases may be delayed for much longer than 10 weeks as the FTT will have a backlog of hundreds, if not thousands of cases to reassign in addition to new applications.

The FTT does have the power to determine cases without a hearing if there is sufficient agreement as to the facts of the case and it is not contrary to the interests of the parties. It would therefore be sensible for all parties involved in FTT cases to consider whether a hearing is necessary or whether facts can be agreed and written submissions lodged to allow the FTT to make a decision.

While impending evictions are the foremost issue for landlords and tenants alike, there is more to a tenancy than simply ending it. Landlords still have obligations to maintain their properties in compliance with the repairing standard, which includes ensuring properties are wind and watertight, have appropriate water access and sanitation, have gas and electric safety certificates and have working smoke and carbon monoxide alarms. With the increased focus on social distancing and working from home, it is more important than ever that landlords ensure their properties are habitable. If landlords are aware of any outstanding issues in their property, they should take all reasonable steps to have these addressed. Landlords should also consider whether they require to apply for extensions or variations of any Repairing Standards Enforcement Orders (“RSEO”). An RSEO is an order made by the FTT which requires a landlord to undertake, within a specified time period, specific works to bring their property into compliance with the repairing standard. For example, a landlord may have been ordered to undertake work to eradicate dampness in a property, to repair a leaking roof or to install heating facilities. It is an offence to fail to comply with a RSEO without a reasonable excuse. Whilst coronavirus may be considered a ‘reasonable excuse’ in some circumstances, until such time as the repairing obligations are relaxed or other guidance is given by the Government, landlords should strive to ensure that all essential repairs are dealt with in early course.

Coronavirus has resulted in considerable uncertainty and concern and people are panicking, as evidenced by the empty shelves in supermarkets across the country. Landlords should try to ‘keep calm and carry on’ whilst also, bearing in mind their obligations and the unsettling environment we are currently operating in. Maintaining a good landlord/tenant relationship will be of benefit to all parties during this challenging time.

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