It was announced last week that - subject to Scottish Parliament approval - rent rises will be capped at 3% and evictions will remain banned. Landlords and tenants have been increasingly seeking advice about the fine detail of what various rule changes mean for how they manage their assets and look after people.
Royal Ascent was granted in October for the Cost of Living (Tenant Protection) Act, which imposed a pause on rent rises for private and social tenants, as well as student accommodation. Introduced in response to the cost of living crisis, the law also included a ban on evictions - except in a number of specified circumstances.
In last week’s announcement to update those rules, private landlords will be allowed to raise rents by a maximum of 3% but can appeal to Rent Service Scotland to increase this to 6% in certain circumstances. The rent cap on student accommodation will also be lifted as part of the next wave of measures, which could remain in place until September with the option of a further six-month extension beyond that.
Landlords across Scotland are being urged not to make any knee-jerk reactions in light of the latest changes. They have also been encouraged to navigate eviction processes carefully.
Katherine McAlpine, a Senior Solicitor in our Dispute Resolution and Litigation team, said: “Many landlords have wrongly presumed that these continued rules tie their hands completely if unfortunate issues arise. That’s not the case.
“What’s important in all of this is that no-one rushes into any actions, whether that be over the future of their assets or in dealing with tenants. There is a lot to consider.
“We are currently helping a number of private landlords to navigate what the changes mean for them and to ensure they act appropriately. There are still moves which can be made in the event that something goes wrong with a tenancy. But these are complex with steps that should be carefully followed.”.
On evictions, the ban prohibits private landlords from being able to use an order to carry out physical removal of tenants. It is, however, still possible for them to start the eviction process. In many cases, the tenants could leave voluntarily. The ban only becomes an issue if the tenant does not leave voluntarily and the landlord needs to enforce an eviction order.
Katherine added: “An important feature of the ban is that it only bans eviction for six months from the date any given eviction order is granted. After the six months pass from the date it was granted, the eviction order will be enforceable. This essentially creates a delay to eviction rather than an outright ban.
“The complexity means that obtaining sound advice is really important. Trying to progress without it could prove costly.”
Damages for unlawful eviction sit at a maximum of 36 months' worth of rent.
Before taking any action, landlords must be able to demonstrate they have given reasonable consideration to any steps taken by the tenant that may affect their ability to make payment within a reasonable time, the extent to which a tenant has complied with an agreed payment plan and any changes which are likely to impact upon that.
A coalition of landlords and letting agents has submitted a petition to the Court of Session seeking a judicial review of the Bill.
SUMMARY
If the proposals receive Scottish Parliamentary approval, from 1 April:
- If landlords choose to increase private rents they will be capped at 3%
- The safeguard for private landlords will be amended, allowing them to apply for increases of up to 6% to help cover certain increases in costs in defined and limited circumstances
- Enforcement of evictions will continue to be prevented for all tenants except in a number of specified circumstances
- Increased damages for unlawful evictions of up to 36 months’ worth of rent will continue to be applicable
- The rent cap for student accommodation will be suspended, recognising its limited impact on annual rents set on the basis of an academic year.
The original article featured in the Courier on 31 January 2023.
