The Cost of Living (Tenant Protection) (Scotland) Act 2022 (‘the Act’) came into force on 28 October 2022, having been fast tracked through the Scottish Parliament via emergency legislation on 6 October 2022. In broad terms, its purpose is to protect tenants in the current cost-of-living crisis whilst balancing safeguards for landlords. The Act introduces a temporary rent freeze and a ban on evictions applicable to the Scottish private rented, social housing and student accommodation sectors until at least 31 March 2023. It also introduces increased damages for unlawful evictions. The Scottish Government also has the option to extend the measures for two further periods of 6 months (subject to parliamentary approval).
There are three main points to be aware of:
- Evictions ban
- Rent Freeze for up to 18 months
- Eviction rule changes
Eviction Ban – implications for residential tenancies
The Act creates a temporary eviction ban for Private Residential Tenancies and Assured/Short-Assured Tenancies, although there are exceptions to the ban. All eviction grounds are discretionary but there are still grounds which are more likely to be allowed.
- substantial rent arrears (accrued arrears equating to or exceeding 6 months’ rent)
- where a landlord intends to sell the property to alleviate financial hardship;
- where a landlord intends to live in the property to alleviate financial hardship;
- where a lender intends to sell the property;
- tenant abandonment; and
- antisocial behaviour and criminality.
If the landlord seeks repossession to alleviate their financial hardship the Tribunal will consider all relevant information about the landlord’s financial position and decide whether it is reasonable to evict in each case.
It is important to note that the Act only prevents enforcement of evictions. It does not interfere with a landlord’s ability to raise proceedings. Landlords can continue to serve notices to end a tenancy as normal. If a tenant does not leave during the notice period, proceedings can be raised with the Tribunal. An eviction order will be granted if the Tribunal considers it reasonable to do so, but a landlord cannot (unless the exceptions apply) take steps to enforce the order until at least 31 March 2023.
The Act has introduced increased penalties for unlawful evictions. Landlords could be liable to pay damages up to a maximum of 36 months’ worth of rent if found liable and criminal proceedings are possible.
Rent increases have now been capped at 0% [yes ‘zero’ per cent] until at least 31 March 2023 and apply to existing leases (PRTs and SATs) . This means that whatever the lease may say, any rent-increase notice served on a tenant on or after 6 September 2022 will have no effect and will not be enforceable, and the current rent will be payable. Any rent-increase notice served prior to this date will remain valid.
The Act does allow for a limited exception, where a landlord can apply to a rent officer to increase rent to cover up to 50% of an increase in any “prescribed property costs” which arise over a period of 6 months. This exception is very limited and will not be easy to use.
Implications for the private rented sector
The COVID-19 pandemic saw emergency legislation brought into force at short notice, and this will likely continue throughout the cost-of-living crisis.
Landlords have faced numerous changes over the last two years such as extended notice periods and pre-action protocols. Now, all eviction grounds are discretionary, and landlords should be aware that the Tribunal will only grant an eviction order if, in all the circumstances of the case, they consider it is reasonable to do so.
If you would like to discuss these changes further, please get in touch with our expert team.