The Housing (Scotland) Bill: Long-term private rented sector controls inbound

After lengthy discussions with invested parties in the Scottish private rented sector, the Scottish Parliament introduced the Housing (Scotland) Bill on 26 March 2024 (the “Bill”). Whilst the Bill is still in its infancy, its purpose is to bring about long-term rent controls and tenant protections to the Scottish Private rented sector in the wake of the expiration of the Cost of Living (Tenant Protection) (Scotland) Act 2022.

The following are some of the main highlights of the Bill that the Scottish government is looking to enshrine into private sector landlord/tenant legislation:

Rent control and conditions – assessments and reports

The Bill provides that local authorities will be required to carry out assessments of the level of rent payable as well as the rate of increase in rent payable in their area due under private residential tenancies and assured tenancies. As part of that assessment, landlords will be obligated to provide authorities details of the current rent at the property and the details of the most recent rent increase, failing which penalties can be levied against the landlord for failure to comply. The authorities will then report findings to MSPs on whether in their view rent controls ought to be introduced in that area. MSPs would then decide on whether to introduce rent controls into the area.

Where an area is designated for rent control this would prohibit a landlord of a property within that area from increasing rent for up to five years during and between tenancies. That prohibition will come by either a rent cap based on a fixed percentage or a formula to calculate the increase.

Landlords will be prohibited from increasing rent more than once in any 12-month period and no rent increase will be permitted in the first year of a tenancy.

Some properties may be designated as exempt from rent controls in certain circumstances and it is envisaged that further regulations will govern those exemptions.

Eviction orders – duty to consider delay

Where the First Tier Tribunal or Sheriff grants an eviction order in both the private and social rented sectors they will have to consider and decide whether in the circumstances of the particular case it would be reasonable to delay the eviction being carried out by fixing a date in which the eviction cannot be executed before.

The Bill sets out certain criteria to be considered when coming to their decision including whether without the delay the tenant or a member of the tenant’s household would experience financial hardship, a detrimental effect on their health, any other detrimental effect, and/or if a seasonal factor would contribute to any financial hardship. The Tribunal or Sheriff can also take into consideration the above criteria when assessing the landlord’s position.

Unlawful eviction – determination of damages

Where the First Tier Tribunal makes an order for payment of damages against a landlord in favour of a tenant who has been unlawfully evicted under the Housing (Scotland) Act 1988 the Bill provides that the Tribunal may set the level of damages ordered for payment to be between 3 and 36 months’ worth of rent. In coming to their decision the Tribunal is directed to consider the manner of the unlawful eviction and the impact that it has had on the former tenant.

Joint tenancies – ability to end tenancy

Under current tenancy rules for private residential tenancies entered into on or after 1 December 2017 it is not possible for one joint tenant to end their tenancy without the agreement of all other joint tenants to do so. This has resulted in some tenants being trapped into their tenancies where others withhold such agreement.

The provisions of the Bill intend to amend that position and allow one joint tenant to unilaterally end their private tenancy by giving their fellow joint tenants prior notice of that intention. Further to the expiry of the pre-notice if the joint tenants do not agree to end the tenancy, then the terminating tenant can provide the landlord with a final notice to leave and on its expiry bring the joint tenancy to an end for all tenants.

Landlord’s consent – keeping pets and let property alterations

The Bill provides tenants with private residential tenancy agreements more rights and freedoms when it comes to asking the landlord to allow a pet to live in the property and/or making personalised changes to the let property such as decorations. Landlords will be prevented from unreasonably withholding permission for such requests from the tenant but discretion will remain for the landlord to add conditions for the introduction of a pet and/or refuse more substantial modification requests to the let property. The tenant would then have a right to appeal to the First Tier Tribunal against a refusal or condition imposed by the landlord if in their view such refusal or condition was unreasonable.

Conclusion

Much can happen between now and when the Bill comes into force. It remains to be seen what impact the new policy changes will have on the Scottish private rental market. The legislative proposals presented are sure to have landlords feeling troubled. This is especially so where landlords have already faced an ever-changing raft of tenant protections introduced since the Covid-19 pandemic and whilst the cost of living crisis continues to bear upon affordability. There are of course concerns that the further provisions may see more landlords driven from the private rented sector causing further pressure on Scotland’s rental market. It is hoped that the provisions can achieve a balance between reaching a fairer, well-regulated rented sector for the benefit of tenants and the financial interests of their landlords.

If you would like to discuss the provisions introduced by the Bill with one of our landlord and tenant experts please do not hesitate to contact a member of our Gilson Gray Debt Recovery team.