New Rent Freeze and Eviction Regs – what do they mean for Landlords?

There has been much discussion around the new Cost of Living (Tenant Protection) (Scotland) Act 2022 which is expected to come into force at the end of October 2022 and would be in force until at least 31 March 2023. With the agreement of parliament the legislation can be extended beyond this date to 30 September 2023 and again to 31 March 2024.

 Many of our landlords have been asking what effect this will have in practice.

The Scottish Association of Landlords has a comprehensive review but here is a summary of the main points:

Rent Increases:

Whilst a restriction has been put in place for rent increases for existing tenants, there are still instances where the rent can be increased.

1. Between tenancies.  It is only mid-tenancy increases which are affected by the rent increase restrictions.
2. Rent increase notices issued for any tenancy type prior to 6 September 2022 are permitted to come into force at the end of the notice period.
3. For assured and short assured tenancies which have rent increase clauses within the contract, rent increases are permitted to take place regardless of whether notice of the rent increase is issued before or after 6 September 2022.
4. Landlords can apply to the rent officer for an increase of up to 3% to cover increases in prescribed property costs. These would include up to 50% of an increase in prescribed costs (listed) which occurred over the previous 6 months:
   • mortgage/standard security interest
   • insurance premiums (not general buildings/contents insurance premiums
   • services charges paid by the landlord which the tenant is responsible for under the tenancy

Evictions:

Landlords can serve notice as normal if they wish to end a tenancy. Most tenants leave during the notice period and in these cases the eviction restrictions will not have any effect.

The issues occur if the tenant doesn’t move out during the notice period and an application has to be made to the tribunal for an eviction order.

However, the legislation delays a landlord from enforcing an eviction order issued by the tribunal in some circumstances for up to 6 months.

Exemptions:

1. Notice was served on the tenant prior to 6 September 2022 and tribunal proceedings commence before the Act comes into force (the Act is expected to come into force towards the end of October);
2. The eviction was granted on an exempt grounds:-
   • criminal or anti-social behaviour
   • lender repossession
   • abandonment
   • employment with landlord ceasing
   • new grounds which the legislation adds to the PRT regime, namely
     • intent to sell to alleviate financial hardship
     • intent to live in property to alleviate financial hardship
     • substantial rent arrears – 6 months or more at point notice is served