Another blow for private landlords?

On 6 September, the First Minister announced plans for a rent freeze for public and private rented properties as part of efforts to help people struggling with rising bills.

The Changes

Whilst the actual content of a Housing Bill has yet to be published indications are that a rent freeze will take place from 6 September and, using the same type of emergency legislation as was utilised during the coronavirus pandemic, a moratorium on evictions will begin imminently lasting until at least 31 March 2023.

This may well be seen as another blow for landlords who have faced unprecedented strain in the last 24 months with extended notice periods for service of notices to bring tenancies to an end, the introduction of pre-action protocols, and the amendment of all mandatory eviction grounds to discretionary.

So what should I do?

Landlords who have defaulting tenants who they wish to remove, should not rest on their laurels. The First-tier Tribunal for Scotland (FTT) which is the venue for seeking orders for eviction will not be closed whilst the moratorium is in effect.

Notices to Leave should still be served, and they should be allowed to run their normal course. Applications to the FTT should still be made, so as to ensure you are as near to the front of the queue as possible when the moratorium inevitably ends.

Eviction applications that are currently in the hands of the FTT should be allowed to conclude and for orders of eviction to be granted even if they cannot be enforced immediately due to the moratorium.

Mitigating Financial Loss

Meanwhile, Landlords should consider other means of mitigating financial losses, especially in cases of significant rent arrears, making use of the FTT to obtain payment orders that can be used to arrest wages, freeze bank accounts and in significant cases, and where it is justified, to sequestrate (bankrupt) an individual.

The threshold for sequestration which is currently £10,000 due to emergency coronavirus legislation, is set to be reduced to £5,000 from 1 October 2022. Our Senior Paralegal David Gray outlined the changes of the Coronavirus (Recovery and Reform) (Scotland) Bill in a series of blogs you can find here.

If you would like to discuss the impact of the First Minister’s announcement on you; if you are having issues with a tenant who has stopped paying rent; or you have orders for payment you would like to enforce; please do not hesitate to contact David Alexander or David Gray either by email: dalexander@gilsongray.co.uk and dgray@gilsongray.co.uk or by phone: 0131 516 5354.