Coronavirus (Scotland) Bill and Private Rentals

COVID-19 Outbreak and the Private Rented Sector

There has been a lot of focus in the national news about the approach of the UK Government in relation to the Private Rented Sector and the moratorium on landlords in England being able to take steps to evict tenants. In relation to Scotland, the Scottish Government has gone its own way (albeit a week or so later), and perhaps even further in an attempt to prevent evictions. That combined with the effective shut down of the First-tier Tribunal means that the removal of tenants from any property – regardless of the reasons and even if completely unrelated to anything arising from coronavirus – will be substantially more difficult. The only solace may be that the intention is that this legislation will only initially be in place until September 2020, but there are provisions to roll it forward on 6 monthly blocks if it is felt appropriate to do so.

The Coronavirus (Scotland) Bill has been laid before the Scottish Parliament today (1 April 2020) as an emergency Bill and it is expected it will be passed without substantive changes.

What does the Coronavirus (Scotland) Bill do in relation to the PRS?

It will have significant impact on any attempts to recover possession of a property let under various tenures including Private Residential Tenancies (PRTs) and any remaining Short-assured (SATs) and Assured tenancies. It also affects older types of tenancies, but this note does not deal specifically with those. This is implemented by 2 main changes in the underlying legislation.

Mandatory Grounds or basis for Eviction/Possession

Whether it be Private Residential Tenancies, Assured Tenancies or Short Assured Tenancies all grounds for possession during the period the legislation is in force will be discretionary and as such, not only will landlords have to establish the ground exists, but they will also have to establish that the granting of an eviction or possession order is reasonable in the particular circumstances. The Grounds are still established and constituted in the same way, so for example with PRTs and rent arrears, Ground 12 is still established by 3 months of consecutive arrears, but what has been done is that, irrespective of the level of the arrears, Ground 12 will be discretionary.

This also applies to short-assured tenancies where the basis for possession is under section 33, which is/was the landlords automatic right to recover possession at the end of a short-assured tenancy – often misdescribed as the “no fault” ground. This will be discretionary.

Notice Periods

PRTs

Instead of the current 2 notice periods of 28 and 84 days, we will have 3 different periods. These are as follows:

• 28 days

Ground 10 (where the tenant is no longer occupying the property).

• 3 months

Ground 4 (landlord wants to live in the property), Ground 5 (family member of landlord wants to live in the property), ground 13 (criminal behaviour of tenant), Ground 14 (antisocial behaviour by tenant), Ground 15 (association with someone guilty of criminal behaviour or anti-social behaviour), Ground 16 (landlord ceased to be registered) and Ground 17 (HMO licence revoked).

• 6 months

Grounds 1 (landlord wants to sell), Grounds 2 (lender wants to sell), Ground 3 (refurbishment), Ground 6 (change of use), Ground 7 (required for religious purposes), Ground 8 (no longer employee of landlord), Ground 9 (supported accommodation), Ground 11 (breach of tenancy), Ground 12 (rent arrears) and Ground 18 (overcrowding notice).

Assured Tenancies and SATs

Again, we will lose, for the time being, 2 notice periods and get 3 in their place as follows:

• 2 Months

Ground 9 (alternative accommodation)

• 3 months

Ground 1 (landlord wants to live in the property) and Ground 15 (anti-social behaviour)

• 6 months

Grounds 2 to 8 with ground 8 being the former mandatory rent arrears ground of 3months or more rent arrears. Grounds 10 to 14 which includes the 2 other rent arrears grounds and where a tenant gives notice to quit and then doesn’t remove. As well as grounds 16 (condition of the furniture deteriorated) and 17 (no longer employee of landlord).

A 6 month notice period will also apply to any notices issued to terminate a SAT under section 33 rather than the current 2 months.

Whilst there are no new statutory forms prepared such as the Notice to Leave or the AT6 there are ancillary provisions to the effect that they are to be read as if they had been changed in certain respects. There are also further provisions to explain how to calculate these new notice periods.

As detailed above, these new provisions only apply to notices served after the legislation comes into force. It should not affect older notices served prior to the COVID-19 outbreak.

Despite what some tenants may think, rent remains payable under any lease and there appear to be no restrictions on landlords seeking payment orders against defaulting tenants and seeking to enforce those in the usual way during the currency of the new legislation.

The changes apply regardless of the reasons for seeking possession (whether or not that in any way relates to coronavirus). Were the changes necessary as, from a practical perspective, landlords can’t evict tenants anyway due to the shut down of the First-tier Tribunal: Housing and Property Chamber until June at the earliest? The knock-on delays caused by the postponement of the current business of the tribunal and the inevitable backlog in applications mean that it will be many months after the tribunal eventually reopens before cases will be dealt with anyway.

Whilst this is set as temporary legislation made in an emergency situation, it remains to be seen how quickly after the COVID-19 outbreak has ended that the Scottish Government will reverse these changes and whether we will be left with them well after the chaos of coronavirus has disappeared.