Coronavirus and the Private Rented Sector
Update as of 3 April 2020
On 1 April 2020 the Scottish Parliament passed the Coronavirus (Scotland) Bill which contains important changes to the eviction of tenants in Scotland. These changes apply to any notice to quit or notice to leave served on a tenant whilst the provisions of the Bill are in force and are summarised below. At present, these changes have effect until 30 September 2020 but the Government has the power to extend these for a further twelve months.
Notice Periods – Private Residential Tenancies
Landlords may still serve notice to leave on their tenants. The usual notice periods are 28 or 84 days depending on the grounds for eviction. The new periods are 28 days, three months and six months respectively.
The 28 day period now only applies where the sole grounds for eviction are that the tenant is not occupying the property as their only or principal home.
If the landlord or a member of their family intend to live in the property or if the tenant has a relevant conviction or has behaved antisocially or if the landlord is not registered or doesn’t have an HMO licence, there is now a three month notice period.
All other eviction grounds now require a six month notice period.
Eviction Grounds – Private Residential Tenancies (PRT)
Normally, eviction grounds for both assured and private residential tenancies are split into mandatory and discretionary grounds. An eviction order must be granted where a mandatory ground is established.
The Bill temporarily changes the mandatory PRT grounds to discretionary grounds, meaning that a landlord seeking to rely on these grounds must now also establish that it is reasonable to grant an eviction order.
The only mandatory ground remaining is that the tenant is not occupying the property as their only or principal home.
Notice Periods – Assured & Short Assured Tenancies
To initiate eviction proceedings the landlord must serve an AT6 setting out the eviction grounds relied on or a Section 33 notice along with a notice to quit.
Six months’ notice must be given in the Section 33 notice required to initiate the recovery process for a short assured tenancy.
For assured tenancies, the normal notice period for the AT6 is two weeks or two months. That has been increased to two months, three months or six months dependent on the eviction grounds.
The two month period only applies where the relevant eviction ground is that the landlord has alternative accommodation available for the tenant.
The three month notice period applies where the landlord wants to live in the property or where the tenant or a member of their household have behaved antisocially or been convicted of a relevant offence.
All other eviction grounds, including rent arrears, now require a six month notice period.
Eviction Grounds – Assured & Short Assured Tenancies
For assured tenancies, all previously mandatory eviction grounds are now discretionary. That includes evictions on the basis of more than three months’ rent arrears. Mandatory repossession of a Short Assured Tenancy under the Section 33 process is now discretionary. That means that the landlord must now also establish that it is reasonable to grant an eviction order and the Tribunal have discretion whether or not to grant same.
There is no provision in the Bill for rent free periods. During Parliament on 1 April 2020, Housing Minister Kevin Stewart reiterated that anyone who could afford to pay their rent should continue to do so during the pandemic. There is no legal obligation on landlords to waive or defer rent during this period. However, the landlord’s actions may be taken into consideration when seeking an eviction order. Landlords should ensure they maintain good communication with their tenants and direct them to sources of support which are linked in my update of 25 March 2020 (see below).
On 1 April 2020 the Housing Minister advised that the Scottish Government will establish a fund offering interest free loans to private landlords experiencing difficulty securing rent due to the coronavirus crisis. That fund is expected to be in place by the end of April 2020.
Finally, the Bill is silent on enforcement of existing eviction orders. As the First Tier Tribunal has now closed its administrative base, any orders granted prior to the lockdown are unlikely to be received (and therefore enforced) for some time. In theory therefore any landlord holding an eviction order could enforce this. We recommend that landlords act reasonably at this time.
Update as of 31 March 2020
The Health Protection (Coronavirus) (Restrictions) (Scotland) Regulations 2020 are now in force. They relate to the emergency period which commenced at 7.15pm on 26 March for an indefinite period. The Regulations make it a criminal offence to leave your home during the emergency period without a reasonable excuse. Moving house if reasonably necessary constitutes a reasonable excuse and the regulations are therefore relevant to landlords and to tenants who may be moving into properties.
In Edinburgh a large number of properties have been removed from Airbnb and other short-term letting platforms and placed on the residential letting market. Understandably Those landlords, who would otherwise face considerable losses through cancelled bookings, are keen to have their properties tenanted as soon as possible.
Since the Regulations have just been released, there is little to no guidance from the Courts as to when moving house is considered ‘reasonably necessary’. The Scottish Government has provided guidance which should be considered and applied on a case by case basis. The guidance goes further than the Regulations and provides that tenants should only be allowed to move into properties where it is absolutely necessary. Absolute necessity is considered to arise when the tenant would otherwise be at risk of homelessness. Logically therefore, if the tenant has alternative accommodation available to them, then moving to a new property is unlikely to be considered an absolute necessary.
It is likely that most tenants will find themselves somewhere in the middle where it is not absolutely necessary to move but may still be reasonable to do so. For example, a tenant may have existing accommodation in a block of flats but has a requirement to move into adapted accommodation due to an accident leaving them with reduced mobility. As another example, a tenant may require to be moved to sheltered accommodation to allow a care package to be implemented. On the face of it these hypothetical situations amount to reasonable necessity but don’t necessarily fall under the ‘absolute necessity’ set out in the guidance. In those circumstances we recommend that tenants, landlords and letting agents take specialist criminal law advice alongside advice from their civil solicitor.
The Scottish Government has also issued guidance for landlords regarding the repairing standard and safety checks on tenanted properties. Private landlords and letting agents are asked to ‘carry over’ gas, fire and electrical routine certification checks until the coronavirus crisis is over. The Gas Safe Register has suspended all routine inspections and will only undertake inspections in high risk situations.
These safety checks are part of the landlord’s obligations to maintain the property in compliance with the repairing standard. The repairing standard still applies, however the legislation does provide that where work cannot be carried out because it would endanger any person, that doesn’t amount to a breach of the repairing standard obligations. A landlord will also not be in breach where they are unable to obtain rights of access to the property after attempting to do so. Given the lockdown, social distancing requirements and the shut down of the First Tier Tribunal business, a tenant may refuse access and the landlord will have no recourse to the Tribunal to secure access at this time. We recommend that landlords and letting agents document all contact with tenants, electricians and gas engineers in which they attempt to schedule and arrange access for these checks and carry these over until it is deemed safe for these checks to take place.
Landlord’s repairing obligations still apply generally but these must be taken in context alongside the Government guidance and the Regulations.
The Scottish Government guidance indicates that access to properties for repair issues should be limited to serious and urgent issues which affect the tenant’s ability to live safely in the property. Examples of such issues include:
- Damage to the fabric of the building (e.g. leaking roof);
- Repairs affecting the security of the property (e.g. broken windows);
- Problems leaving tenants without heating, a working fridge, hot water, washing or toilet facilities;
- Any other issue making the property unfit for human habitation.
The Scottish Association of Landlords (SAL) has advised its members that emergency maintenance work should be carried out, namely heating/hot water repairs and water leaks. SAL also advises that end of tenancy checks should be carried out to ensure the property is secure and should be done in the absence of the tenant. This corresponds with the Government guidance. Where landlords are unsure if repairs are serious and urgent they should take expert legal advice.
Additionally, the Scottish Government has delayed the introduction of the Energy Efficiency (Domestic Private Rented Property) (Scotland) Regulations 2020. Those regulations were due to come into effect on 1 April 2020 and would have required private landlords to ensure their properties meet minimum energy efficiency standards or, from 1 October 2020, face a ban on granting new tenancies of those properties.
Finally, the Coronavirus (Scotland) Bill will be debated in parliament on 1 April 2020. The Bill is expected to contain the proposed ‘eviction ban’. A further update will be issued once the text of the Bill is available.
Update as of 25 March 2020
During Parliament on 24 March 2020, the First Minister reiterated that nobody should be evicted as a result of the coronavirus crises and indicated that that the intended legislative change would increase the three month arrear period, required for mandatory eviction, to six months. Communities Minister Aileen Campbell reiterated that there should ‘be no evictions as a result of Covid’. She advised that the emergency legislation being prepared by the Government was intended to ensure that there can be no evictions from the private or social rented sectors for six months. Ms Campbell indicated that this would achieved by extending the notice period required for the majority of eviction grounds. Those notice grounds are either two weeks or two months for assured tenancies, two months for short assured tenancies and either 28 or 84 days for Private Residential Tenancies. This is being reported as a six month ban on evictions in both private and social rented sectors.
It is not quite accurate to describe the proposed changes as a ‘ban’ on evictions, rather it appears this will introduce additional pre-requisites for landlords to comply with before being able to initiate the eviction process. Landlords can still serve notice on their tenants, however they won’t be able to do much more than that for some time. Landlords who have already served notice can still apply for an eviction order, but again they won’t have a decision on that for months yet.
In the meantime, social landlords and local authorities have cancelled scheduled evictions. Local authority offices are closed which means that those who have been evicted may not have anywhere to go for homelessness support including temporary housing. Further, Sheriff Officers, who carry out evictions, are only to carry the most urgent work and must practice social distancing.
Private landlords should accordingly consider whether any scheduled eviction is of the utmost necessity. A situation where an eviction may be deemed urgent and necessary is if the tenant is known to have left and the property is urgently required to house someone else.
Landlord should also be aware that the 30 day appeal period will continue to run for any decision issued by the First Tier Tribunal in eviction, payment and tenancy sanctions cases prior to the shutdown. Orders cannot be issued before the end of the appeal period but will be issued by the Tribunal if no appeal is received. Accordingly any landlord who is considering appealing a decision should take urgent advice on doing so.
On 17 March 2020
The Scottish Housing Minister, Kevin Morrice stated that the Scottish Government was considering measures to prevent landlords from evicting tenants. On 18 March 2020 he issued an open letter to landlords seeking their support in ensuring tenants are not evicted due to financial difficulties arising from coronavirus.
The same day the Communities Minister, Aileen Campbell announced that a temporary change to the law would be introduced to allow tenants to be in rent arrears for up to six months without being evicted on the basis of those arrears. Under normal circumstances if the tenant is in arrears of at least three months, unless the arrears arise due to benefit issues, it is mandatory grounds of eviction in assured and private residential tenancies (“PRTs”)..
Where does this leave private landlords and indeed tenants? Evictions as a result of rent arrears already take an average of ten months from the first missed payment to the date of eviction. With the temporary law change, that is likely to rise to 13 months. In other words, if a tenant stopped paying their rent on 1 April 2020, the landlord would be unable to take action until 1 October 2020 and it is likely that they would not recover their property until May 2021.
Another key development in the housing market is the announcement from lenders that they will allow mortgage holidays of up to three months and a willingness to support customers experiencing issues with their finances. Landlords who may benefit from a mortgage holiday or other support should apply to their lender as soon as possible. It is also important that landlords contact their tenants to gauge their financial situation in light of the implications of Coronavirus and what they can perhaps do to assist. Some tenants may still be working, but find themselves on reduced hours, while some may have lost their employment entirely. Where possible, the benefit of a mortgage holidays should be passed on to the tenant through a rent reduction or rent holiday.
Another way in which landlords can support their tenants during this time is to encourage them to apply for Universal Credit and Statutory Sick Pay. Tenants who are already on benefits may be entitled to Discretionary Housing Payment. Some tenants may also be eligible for support from the Scottish Welfare Fund.
At the moment there are no proposed changes to other eviction grounds under the assured or PRT regimes. However, as of 19 March 2020 all hearings before the First Tier Tribunal (Housing & Property Chamber) (“FTT”) have been postponed until at least 28 May 2020. Most of those hearings will not take place on 28 May as this is a date set in order to comply with legislation which means that any ongoing cases will be on hold for at least 10 weeks. Tribunal inspections or supervised access of tenancy properties is also postponed until further notice.
At the time of writing it is unclear when any hearings will proceed before the FTT. In practical terms cases may be delayed for much longer than 10 weeks as the FTT will have a backlog of hundreds, if not thousands of cases to reassign in addition to new applications.
The FTT does have the power to determine cases without a hearing if there is sufficient agreement as to the facts of the case and it is not contrary to the interests of the parties. It would therefore be sensible for all parties involved in FTT cases to consider whether a hearing is necessary or whether facts can be agreed and written submissions lodged to allow the FTT to make a decision.
While impending evictions are the foremost issue for landlords and tenants alike, there is more to a tenancy than simply ending it. Landlords still have obligations to maintain their properties in compliance with the repairing standard, which includes ensuring properties are wind and watertight, have appropriate water access and sanitation, have gas and electric safety certificates and have working smoke and carbon monoxide alarms. With the increased focus on social distancing and working from home, it is more important than ever that landlords ensure their properties are habitable. If landlords are aware of any outstanding issues in their property, they should take all reasonable steps to have these addressed. Landlords should also consider whether they require to apply for extensions or variations of any Repairing Standards Enforcement Orders (“RSEO”). An RSEO is an order made by the FTT which requires a landlord to undertake, within a specified time period, specific works to bring their property into compliance with the repairing standard. For example, a landlord may have been ordered to undertake work to eradicate dampness in a property, to repair a leaking roof or to install heating facilities. It is an offence to fail to comply with a RSEO without a reasonable excuse. Whilst coronavirus may be considered a ‘reasonable excuse’ in some circumstances, until such time as the repairing obligations are relaxed or other guidance is given by the Government, landlords should strive to ensure that all essential repairs are dealt with in early course.
Coronavirus has resulted in considerable uncertainty and concern and people are panicking, as evidenced by the empty shelves in supermarkets across the country. Landlords should try to ‘keep calm and carry on’ whilst also, bearing in mind their obligations and the unsettling environment we are currently operating in. Maintaining a good landlord/tenant relationship will be of benefit to all parties during this challenging time.
If you would like further information, please get in touch.
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