Pre-Action Requirements (PARs)
Introduced by The Coronavirus (Scotland) (No.2) Act 2020 and The Rent Arrears Pre-action Requirements (Coronavirus)(s) Regs 2020, the PARs apply to rent arrears notices served after 7 April 2020 where the rent arrears occurred wholly or partly after 27 May 2020 (the date The Coronavirus (Scotland) Act 2020 came into effect). It will therefore apply to applications for an eviction order or possession order based on rent arrears submitted to the First-tier Tribunal on or after 6 October 2020.
We will have the PARs until at least 31 March 2021, but it may be the case that they will be in place until 30 September 2021 as the Scottish Government can extend the current emergency legislation for another 6 months after March.
The PARs only apply in situations of rent arrears and in relation to applications submitted to the Tribunal based on such arrears (even if in combination with other grounds). That means Ground 12 for Private Residential Tenancies and Ground 8 for Assured Tenancies (including Short-assured). Oddly, for Assured and Short-assured tenancies, they do not appear to apply to Grounds 11 & 12 which are also rent arrears grounds.
The Requirements are that tenant is to be provided with information on:
- The terms of tenancy agreement;
- The level of rent arrears;
- A tenant’s rights in relation to possession proceedings; and
- How a tenant can access information and advice on financial support as well as debt management.
Further, a Landlord is to:
- Make reasonable efforts to agree a reasonable payment plan with the tenant (both in relation to the arrears and future rental payments);
- Take reasonable consideration of any steps being taken by the tenant which may affect the tenant’s ability to make payment to the landlord within a reasonable period of time;
- Take account of extent to which the tenant has complied with any agreed payment plan; and
- Take account of any changes to a tenant’s circumstances which may affect their ability to comply with any agreed payment plan.
To go with the legislation the Scottish Government has published their guidance, which sets out the steps a landlord can take to comply with the PARs
The guidance can be found using this link:
The guidance sets out useful information on the process to follow and provides template letters. It is also likely that Tribunal will use the guidance as the benchmark to assess whether a landlord has complied with the PARs.
The importance being that the extent of compliance with the PARs is one of the factors the Tribunal have to consider when deciding whether it is reasonable to grant an eviction or possession order based on rent arrears.
The emphasis is on early intervention and as soon as a tenant goes into arrears. The suggestion is that the PARs should be initiated well before and notices are served. Landlords are expected to be “flexible” in their approach to help the tenant manage their arrears and move back to payment of rent.
Ways it is suggested this can be done is:
- Pointing to and providing tenants with the “Private Rented Sector Tenant Resource” document.
- Temporary arrangements to not seek possession whilst a tenant gets help
- Possibly writing off arrears
- Deferment of rent
- Landlord mortgage holidays
- If on universal credit, Managed Payment Plans to get arrears and ongoing rent paid direct to landlords.
- Adjusting payments, for example smaller more frequent amounts
In terms of taking reasonable efforts to agree a payment plan, the guidance suggests landlords should:
- Make early contact with tenant to discuss arrears and point them to possible sources of help (advice and financial)
- Encourage tenants to provide details of their financial circumstances (although they cannot be compelled to provide that information).
- Consider affordability of any plan including with reference to outgoings and future rent as well as what a reasonable timeframe will be.
- If a plan is agreed make sure the tenant gets a copy of the plan so they know the details.
Where a plan cannot be agreed, landlords need to be satisfied that they have made reasonable efforts to agree and importantly be able to demonstrate the actions taken.
There is also the SafeDeposits Scotland resolution service for rent arrears which is free to use and referred to in the guidance, which may assist parties reach an agreed payment plan.
If proposed payment plan is rejected a landlord may need to justify why it was rejected and that this was reasonable.
The guidance sets out how the process may work in practice and provides templates for use at various stages. The process set out does envisage that tenants will engage constructively and little is provided by way of guidance where that is not the case other than to say landlords should continue to make attempts to contact tenants by various means and keep records of such attempts.
Some may think that in many cases the PARs may end up being little more than a “box ticking exercise”, but it may be the case that the PARs will be looked at more closely in circumstances where there has been some engagement by a tenant and a where a landlord rejects any proposed payment plan. Where the tenant defends an application on the basis that it is “not reasonable to evict”, offers made and financial circumstances may be looked at more closely by a Tribunal. That said, with large arrears and an unrealistic offer to pay back over several years the granting of an order may still be deemed “reasonable”.
If you require any further information or advice, please contact Rory Cowan