The Cost of Living (Tenant Protection) (Scotland) Act was passed on 6th October 2022. It is the first Act of the Scottish Parliament to receive Royal Assent from King Charles III and became law on 28th October 2022. But what does it mean for landlords?
The Act was introduced to the Scottish Parliament as emergency legislation in order to protect tenants during the cost of living crisis. It introduces a rent freeze and eviction moratorium until at least March 2023, with potential for further extension until 2024.
Read more: Cost of Living (Tenant Protection)(Scotland) Act 2022 receives Royal Assent
For the most part, the legislation applies to all private tenancies in Scotland. The ‘protections’ therefore apply to all tenants, regardless of their means, or whether they are suffering financial hardship. Of course, landlords are also living through the economic crisis and may well be suffering financial hardship, as increasing energy prices and food costs affect homeowners and renters alike.
What Action Can Landlords Take Now?
It is important to note that the Act does not prohibit landlords from serving notices of intention to raise eviction proceedings. Notices can still be served seeking possession after the relevant notice period. If tenants do not vacate and the landlord seeks an eviction order from the Tribunal the eviction moratorium will apply to most grounds, delaying enforcement for up to six months.
Any rent increase notices served after 6th September 2022 will be invalid. The Act does however make provision for increases of up to 3% of the current rent, if the landlord is experiencing increased property costs.
The New Rent Arrears Ground
The Act provides some exemptions to the eviction moratorium for new and existing grounds under both the assured and private residential tenancy regimes; for example the anti-social behaviour grounds. It also creates a new ‘substantial rent arrears’ ground under the Private Residential Tenancy (PRT); Ground 12A. A similar ground will also be introduced for Assured Tenancies; Ground 8A.
What amounts to substantial rent arrears?
In order to satisfy the ground the tenant must have arrears of an amount equal to or exceeding 6 months’ rent under the tenancy. This is not a mandatory ground for eviction. Therefore, even if the tenant accrues this level of arrears, the Tribunal is still required to assess the reasonableness of eviction which will include an assessment of the landlord’s compliance with the pre-action protocol.
What if a landlord has previously served notice under the existing rent arrears ground and the arrears now exceed 6 months’ rent? Will the eviction ban apply?
As above, the Act does not prevent landlord relying on the existing rent arrears eviction ground or raising Tribunal proceedings. However, any proceedings raised after 28th October 2022 on the basis of existing grounds will be impacted by the eviction moratorium. This means a landlord will not be able to enforce the eviction for a period of 6 months from the date the Order is granted or the date the moratorium ends, whichever is later.
In order to avoid the eviction moratorium, landlords will require to serve fresh notices under the new substantial rent arrears grounds.. The same periods of notice will have to be given again before a Tribunal application could be raised based on the new notice. If an order was subsequently granted based on substantial rent arrears, the landlord would not be delayed in enforcing this once the order is issued by the Tribunal.
In all cases, the Tribunal will require to be satisfied it is reasonable to grant an eviction order, taking in to consideration both the landlord and tenant’s wider, personal circumstances.
For more information or advice, contact our PRS Team.
