The long-awaited Housing (Scotland) Bill was introduced to the Scottish Parliament on 26 March 2024. While the Bill proposes changes that will impact the whole of the let residential sector this summary will only deal with those relating to the private rented sector (‘PRS’).
Sections 1-19 of the Bill provide for the re-introduction of rent controls albeit on a local rather than a national level. Local Authorities will be placed under a duty to carry out periodic assessments of rent conditions in their area and send a report of their findings to the Scottish Ministers. The report may recommend the creation of a rent control area in all or part of the local authority area if, to quote Section 2(2) of the Bill. :
“…the local authority is of the opinion that the introduction of measures to control the rate at which rent is payable…is necessary to protect the social and economic interest of tenants in the area” [authors emphasis]
If the Scottish Ministers decide to designate a rent control area it may remain in force for up to 5 years and would apply to Private Residential Tenancies (PRTs) but not ‘exempt tenancies’. However, the Bill does not define what exempt tenancies are. If designated, a rent control area may limit rent increases to a specific percentage, which may be 0%, an amount specified by some other method, all of which are to be set out in future regulations. This is repeated throughout the Bill. That is to say, much of the detail one would normally expect in a new Bill such is not yet available and will only appear in subsequent secondary legislation.
Sections 19-20 of the Bill amend the Private Housing (Tenancies) (Scotland) Act 2016 (“the 2016 Act”) in relation to the level of rent payable under a PRT. The Bill provides that when a PRT ends a landlord cannot set a wholly new rent when the property is re-let within 12 months of the previous PRT ending. Rather, the level of rent charged to the new tenant is capped relative to the rent paid by the previous PRT tenant. However, a property is not ‘previously let’ if it was purchased by the new landlord with vacant possession after the previous PRT ended.
Part 2 of the Bill (Sections 24-27) provides for new grounds whereby evictions may be delayed in certain circumstances. These provisions are intended to apply not only to PRT’s, but also older types of tenancies under the Rent (Scotland) Act 1984, the Housing (Scotland) Act 1988 (“the 1988 Act”) as well as public sector Scottish Secure Tenancies.
Under the proposed new rules the First Tier Tribunal (FTT) must consider some new factors before specifying the day when an eviction order would come into effect. Namely, the effect that eviction would have upon the tenant or another member of the tenant’s household. However, these considerations would not apply if the tenant was no longer occupying the property as his main home, has been convicted of an offence or has engaged in certain forms of anti-social behaviour.
Part 2 of the Bill also proposes increasing the potential financial penalties that may be imposed on Landlords who carry out an ‘unlawful eviction’.
Part 3 of the Bill (Sections 29-30) relate to the keeping of pets and making changes to the let property.
Section 29 would insert a new provision into the 2016 Act whereby the right to keep a pet in a property let as a PRT becomes a statutory right subject to securing landlords consent, which consent could not be unreasonably withheld. However, landlords would be able to impose certain conditions. Precisely what those conditions are or what would be considered reasonable are not defined in the Bill. Those details are to be set out in regulations at some future point.
Section 30 provides for a tenant’s right to make changes to a property let as a PRT. It provides that tenants have an absolute right to make a ‘Category 1 change’ without the consent of a landlord and a ‘Category 2 change’ if the landlord consents and provided the request is made more than 6 months after the tenancy starts. The grounds for withholding consent must be reasonable and tenants have right of appeal if consent is withheld. However, what Category 1 and Category 2 changes actually are and what is reasonable are not defined in the Bill. Once again, future secondary legislation will define these.
Section 38 of the Bill proposes an amendment to the 2016 Act whereby a joint tenant under a PRT can bring the tenancy to an end by giving notice to leave. Currently, notice to end a joint tenancy is only effective if given by all of the co-tenants. In theory, this will permit one tenant to collapse the PRT unilaterally.
Section 40 of the Bill proposes creating a power whereby Scottish Ministers can enact regulations which would convert existing Tenancies under the 1988 Act into PRTs. By virtue of the fact that the rent control and making changes provisions in this Bill only apply to PRT’s and not to 1988 Act Tenancies, the implication is that conversion of 1988 Act tenancies to PRT’s is likely to happen.
It had been intended for the Bill to pass into law at the same time as the ‘temporary’ measures imposed during the pandemic came to an end. However, the Bill was only published days before the rent cap and eviction ban ended. It is possible some landlords may view this as a window to review rents and address any necessary evictions which are likely to become more difficult if the Bill passes into law in its original form.
