Rents frozen and most evictions prevented
Emergency legislation giving tenants increased protection from rent increases and evictions during the cost of living crisis has become law after receiving Royal Assent.
The Cost of Living (Tenant Protection) Act gives Ministers temporary power to cap rent increases for private and social tenants, as well as for student accommodation.
This applies to in-tenancy rent increases, with the cap set at 0% from 6 September 2022 until at least 31 March 2023, effectively freezing rents for most tenants during this period.
Enforcement of eviction actions resulting from the cost crisis are prevented over the same period except in a number of specified circumstances, and damages for unlawful evictions have been increased to a maximum of 36 months’ worth of rent.
Tenants’ Rights Minister Patrick Harvie said: “Many people who rent their homes are facing real difficulties as a result of the cost of living crisis. While bills are rising for all of us, many tenants are more exposed as they are more likely to be on low incomes or living in poverty than other people.
“These measures aim to give tenants greater confidence about their housing costs and the security of a stable home.
“Some landlords may be feeling the effects of this crisis too. So while the primary purpose is to protect tenants, the emergency measures also include safeguards for those landlords who may be impacted.
“For anyone struggling with their rent, I would urge you to contact your landlord, an advice organisation or a tenants’ union to get help as early as possible.”
Edinburgh Lettings Agent Clan Gordon has been looking at what this means for the landlords and tenants that they represent.
Clan Gordon Managing Director, Jonathan Gordon, was part of the Scottish Government’s working Group which consulted on and helped them develop the Private Residential Tenancy (PRT) regime in 2017 which transformed the sector, introducing far greater protection for tenants and simpler procedures for landlords.
He said: “It is reassuring to hear Ministers say the new Cost of Living (Tenant Protection) Bill balances the protections that tenants need, with safeguards for those landlords who may also be impacted by the financial crisis.
“Under the new law, rents for existing private and social housing tenants cannot be increased until at least the end of March 2023 and can be extended for up to a further 12 months in two six-month blocks.”
So, what does this mean for landlords? Although the rent cap can continue at the current 0% rate or can be varied at ministers’ discretion, there is no cap or limit on increasing the rent when advertising for new tenants.
Jonathan continued, “Despite the media attention when this was announced this is not a ban on landlords ending tenancies. Landlords can still serve notice as normal if they wish to end a tenancy.
“Most tenants leave during the notice period when they find alternative accommodation so this restriction will have little effect here. If the tenant doesn’t leave during the notice period, the landlord can apply to the tribunal for an eviction order as normal.
“However, the legislation delays a landlord from enforcing an eviction order issued by the tribunal in some circumstances for up to six months.
“Tenants can still be evicted for anti-social behaviour, lender reposition, abandonment, substantial rent arrears or if the landlords intend to sell or move back in to the property to alleviate financial hardship.
“We are also very pleased to see that as well as considering the tenants in this legislation, there are new safeguards for private landlords who find themselves impacted by the cost-of-living crisis.
“In certain circumstances, Landlords will be able to apply to Rent Service Scotland to increase the rent on a property to cover up to 50% of a limited number of specific costs, including increased mortgage interest payments and increases in landlords insurance or service charges.
“Interestingly the rent cap also applies to university halls of residence and other student accommodation where energy costs may be included in rent payments.
“There has been widespread concerns about increases to fuel prices, but the legislation prevents landlords passing on gas and electricity cost rises, in increased rents within the next six months unless the landlord can prove excessively high use of any utilities.
“Students are also covered by the same eviction laws and can only be evicted in cases of anti-social or criminal behaviour.
“Our approach has always been to encourage landlords to help us support any tenant who faces any difficulties including financial ones and in conjunction with our landlords we worked to support a lot of tenants financially and otherwise during the Covid pandemic and lockdowns.
“This is going to be a difficult road ahead and we are pleased that the government has put some measures in place to support and protect landlords and tenants.
The government advice website www.costofliving.campaign.gov.scot offers helpful tips, advice and guidance and our team will be very happy to offer advice about the new legislation to those affected by the current cost of living crisis.”
To schedule a call with a Clan Gordon advisor, visit www.clangordon.co.uk
The Cost of Living (Tenant Protection) (Scotland) Act was approved by the Scottish Parliament on 6 October. It delivers a Programme for Government commitment.
Further information about the Act is available on the Scottish Government website.
Ministers have the power to vary the rent cap while it is in force, and the measures could be extended over two further six-month periods.
