Coronavirus Private Rented Housing Update

Measures which deal with the protection of tenants in privately rented housing arising from consequences of Covid-19 have been introduced by the UK and Scottish governments.

The Scottish Government has brought a temporary change to the part of the law relating to evictions from privately let residential property. This follows on from the announcement of the UK Government’s measures to protect tenants from being evicted due to rent arrears. In this insight note, we summarise the most recent measures introduced in the area of private residential letting.

Aid for Residential Landlords – the Covid 19 loan scheme

The Scottish Government has announced funds will be available to provide interest free loans to private sector residential landlords whose tenants are unable to pay their rent due to the Coronavirus pandemic. More information is available in this link: https://news.gov.scot/news/aid-for-private-rental-landlords.

The loans will cover up to 100% of the lost income but for only one property per landlord. The eligibility criteria are quite strict and if landlords are eligible for support from any other schemes, such as business support or mortgage holiday, they are expected to apply for those, rather than this loan, as this is intended to provide help only where no other support is available. The most likely beneficiaries of this scheme will be individuals who rely on rental income as part of their personal income rather than income which is part of a business stream.

Protection for Tenants in the Private Housing Sector

The Coronavirus (Scotland) Act 2020 which came into force on 7 April 2020 includes changes to the following Acts and a summary of the changes is detailed below:

• The Private Housing (Tenancies) (Scotland) Act 2016
• The Housing (Scotland) Act 1988
• The Rent (Scotland) Act 1984 relating to the grounds for and time limits in notices of eviction.

Removal of Mandatory Termination Grounds

All mandatory grounds become discretionary grounds; this includes the ‘no fault’ ground to terminate a Short Assured Tenancy on the basis it has reached its expiry date.

Extension of notice periods

The notice periods for Notices to Leave have been extended. The periods are:

• 28 days if the ground is the tenant is not occupying a let property as the tenant’s home
• 3 months for certain grounds, including anti-social behaviour, criminal behaviour or the house is required by the landlord or their family for their own use
• 6 months for grounds including rent arrears, the landlord or lender wants to sell, change of use or major refurbishment or the tenant is no longer an employee

Rent Arrears

Rent arrears must have existed for 3 or more consecutive months and a full 3 months’ rent is unpaid. The Tribunal must be satisfied it is reasonable to issue an eviction order. In considering whether to do so the Tribunal must consider the extent to which any delay or failure is a consequence of delay or failure in the payment of housing benefit or universal credit.

The emergency provisions which extended the notice periods to terminate all private residential tenancies will remain in place until 31 March 2021. For most grounds the notice periods will be 3 or 6 months.

Anti-social Behaviour-Reduced Notice Period

With effect from 3 October, the notice period required for all tenancies where the ground used to terminate a tenancy relates to anti-social or criminal behaviour on the part of the tenant, someone living with the tenant or a visitor to the property, will be 28 days. It should be noted that the reduction to 28 days will apply only where anti-social or criminal behaviour is the only ground on which a notice to leave has been served. If the notice to leave is combined with other grounds, for example rent arrears or the landlord requires to sell the property or the landlord requires the property for their own use, then the extended periods of 6 months or 3 months will apply notwithstanding any anti-social or criminal behaviour.

Rent Arrears Pre-Action Requirements

The Coronavirus (Scotland) No. 2 Act was enacted on 26th May. Schedule 2 Part 2 deals with private residential tenancies. If a landlord establishes that rent arrears exist which would justify the First Tier Tribunal to issue an order, the First Tier Tribunal is obliged to consider the extent to which the landlord has complied with pre-action requirements before raising the proceedings for possession.

Pre-action requirements means such requirements as the Scottish Minister may specify in regulations. Minister have now specified the regulations in a Statutory Instrument – Rent Arrears Pre-Action Requirements (Coronavirus) (Scotland) Regulations 2020 which came into force on 1 October. This applies only to Short Assured and Assured Tenancies made under the Housing (Scotland) Act 1988 and Private Residential Tenancies made under the Housing (Tenancies) (Scotland) Act 2016. The SI introduces regulations which a landlord must comply with before taking action in relation to termination of a tenancy for rent arrears.

The regulations require a landlord to:

1. Provide the tenant with clear information relating to:

• The terms of the tenancy agreement
• The amount of rent for which the tenant is in arrears
• The tenant’s rights in relation to proceedings for possession of a house (including the pre-action requirements set out in this regulation), and
• How the tenant may access information and advice on financial support and debt management.

2. Make reasonable efforts to agree with the tenant a reasonable plan to make payment to the landlord of:

• Future payments of rent, and
• Rent arrears.

3. Make reasonable consideration of:

• Any steps being taken by the tenant which may affect the ability of the tenant to make payment to the landlord of rent arrears within a reasonable time,
• The extent to which the tenant has complied with the terms of any plan agreed for payment of arrears, and
• Any changes to the tenant’s circumstances which are likely to impact on the extent to which the tenant complies with the terms of an agreed plan.

These regulations apply to tenancies made under the Housing (Scotland) Act 1988 and the Private Tenancies (Scotland) Act 2016 and do not apply to Regulated, Protected or Statutory tenancies regulated by The Rent (Scotland) 1984. Landlords will require to show they have complied with these regulations when making an application to the First Tier Tribunal for an eviction order based on rent arrears.

We’re here to help

We want to help during these unprecedented times. Our business teams are keeping in touch with clients and we’re taking initial calls on a pro-bono basis, to talk to you about your concerns and business needs.

• For further information on private residential letting, please contact Adele Nicol or Shirley Evans

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