07 October 2022

Emergency legislation is now in force to protect private and social tenants from the cost of living crisis. Whilst tenants, like home owners, will undoubtedly struggle to manage the increased costs of living with energy bills soaring and the costs of fuel and goods continuing to rise, this blog considers what impact the proposed legislation will have on landlords.

The Cost of Living (Tenant Protection) (Scotland) Act 2022 gives Ministers the temporary power to cap rents for private and social tenancies, with this cap set at 0%. The legislation also includes the power to maintain or vary the rent cap over two further six month periods.

This legislation will also ban evictions except in specific circumstances. For Housing Associations recovering from the restrictions of the Covid-19 pandemic, the impact on already strained finances may well be felt.

Despite these enforcement restrictions landlords can still apply to take steps to apply for and obtain an eviction order. 

For any Decrees granted, where the NOP was served after 6 September 2022, the order cannot be enforced for a further six months from when it was granted, or sooner, until the restrictions end. 

If a notice for eviction was served before 6 September 2022, then the restrictions will not apply to any order for eviction granted by the court or FTT. 

However, if the notice was served on or after 6 September 2022, the restrictions will apply.

The restrictions will not apply in the following circumstances:

For Scottish Secure Tenancy Agreements: The legislation provides that the restrictions do not apply where the order was granted on the basis of the application under ground 1 (rent arrears, but only where the arrears are greater than £2500); ground 2 (conviction); ground 5 (not occupying the property as their principal home); ground 7 (anti-social behaviour); ground 8 (harassment); 10 (demolition of, or substantial work on, the property). 

For Private Residential Tenancies: The enforcement restrictions do not apply if the order is or was granted on the basis of the application under paragraphs 1A; (landlord intends to sell the property to alleviate financial hardship) 2 (property to be sold by lender); 4A, (landlord intends to live in the property to alleviate financial hardship); 8 (not an employee); 10 (tenant is not occupying the let property) 12A, (substantial rent arrears) 13 (criminal behaviour) 14 (anti-social behaviour) or 15 (association with person who has relevant conviction or engaged in relevant anti-social behaviour) of schedule 3 of the 2016 Act. The Act newly inserts paragraphs 1A; 4A; 8 and 12A.

For Assured Tenancies: The enforcement restrictions do not apply if the order is or was granted on the basis of an application of Ground 1A (intent to live in the house to alleviate financial hardship); 2 (house to be sold by the lender) 8A (substantial rent arrears) or 15 (criminal or anti-social behaviour) of schedule 5 of the 1988 Act and ground 17 (employment with landlord ceases). The Act also newly inserts grounds 1A and 8A.

Unlawful evictions

The legislation newly brings in provisions for the determination of damages where a tenant has been unlawfully evicted. This applies to unlawful evictions which take place on or after the legislation is in force. The damages can be for anything between 3 and 36 months’ rent. Although, this can be reduced to an amount of less than 3 months’ rent if the court or First-tier Tribunal sees fit. 

In addition to this, the Sheriff Court is required to inform the Scottish Housing Regulator when an order is made. 

Therefore, whilst the new Act provides some safeguards for landlords, the restrictions on enforcing Decrees for eviction where the arrears are below £2500 will undoubtedly pose challenges and will be most keenly felt.

In order to help your tenants to maximise their income and in turn ensure that rent is being paid landlords should:

• Refer tenants for welfare benefit checks as early as possible
• Ensure tenants are in receipt of the fuel insecurity fund where eligible
• Assist tenants with applications for the Tenant Grant Fund to help to pay their rent arrears
• Submit applications on behalf of tenants for Discretionary Housing Payments for energy bills
• Apply for Housing Benefit to be paid directly to the landlord, where appropriate
• Refer tenants to their local Council for support with their energy costs
• Consider alternatives to eviction, such as seeking Decree for payment alone

If you require any further advice on this subject, please contact our Social Housing Team who would be happy to help.

Lynsey Wilson, Senior Solicitor: lwi@bto.co.uk / 0141 221 8012