Housing (Scotland) Bill: Rental Control and Enhanced Duties in Focus

Introduction 

In an attempt to “establish a well-regulated rented sector that balances the needs of tenants and landlords”, the Scottish Government has introduced a new Housing (Scotland) Bill. The Bill proposes several key reforms to Scotland’s private rental sector, particularly concerning rent controls, tenants’ rights to keep pets and decorate their homes, and delayed evictions.

In this Law-Now we consider some of the proposed reforms and the potential impact of these on investment into the private rental sector.  

Rent Control

If passed, the Bill will require local authorities to conduct assessments on the level of rents in their respective areas and advise the Scottish Ministers on whether rent controls should be implemented to safeguard the “social and economic” interest of tenants. The ultimate decision as to the implementation of rent control areas will rest with the Scottish Ministers who must be satisfied that it is ‘necessary and proportionate’ to do so. The initial assessment is required to be submitted by local authorities before 30 November 2026, with subsequent assessments due every five years, and there is the ability for the Ministers to amend these time periods as well as opportunities for local authorities to carry out, or be required to carry out, interim assessments. 

The designation of rent control areas would limit a landlord’s ability to increase rent for up to five years, both during and between tenancies, through the application of either a rent cap or a formula.

The Bill prohibits more than one rent increase within a year and any rent increases during the first year of a tenancy. These measures would apply to properties outside the control areas as well.

The Bill states that the Scottish Ministers may designate certain properties to be exempt from rent controls, and these may be outlined in further regulations.

Interestingly, although assured tenancies fall outside the scope of the Bill, the Government will retain discretionary power to convert them into private residential tenancies. This aligns with the Government’s wider plan to gradually phase out assured tenancies.

‘Ask and Act Duty’

The Bill proposes to impose an “ask and act” duty on social landlords and various public bodies. This will include a duty to enquire about an individual’s housing situation and a duty to act to avoid them becoming homeless wherever possible. As part of this, social landlords will be required to “give reasonable preference” to homeless individuals or those at risk of becoming homeless.

Eviction safeguards

Social and private residential tenants would also benefit from greater protection against eviction under the provisions of the Bill. At present, when considering whether to order an eviction, the First-tier Tribunal (Housing and Property Chamber) must ensure that sufficient grounds for eviction have been established and determine whether pre-action requirements have been met.

In addition to those considerations, the Bill will require the Tribunal to consider whether it is reasonable to delay the enforcement under certain circumstances, such as when eviction would result in detriment to the tenant's (or a member of the tenant’s household’s) health or financial hardship. At the same time the Tribunal may consider whether a period of delaying the end of the tenancy would cause the landlord financial hardship or have a detrimental effect on their health.

Separately, the Bill also allow Tribunals to order a landlord to pay damages worth up to 36 months’ rent for unlawfully evicting their tenants.

Pets

Under the Bill, private residential tenants will have the right to request permission to keep a pet within the leased premises, and the landlord's consent must not be “unreasonably” refused. It is worth noting that this right does not extend to dangerous wild animals, as defined in section 7(4) of the Dangerous Wild Animals Act 1976. Such requests will need to be made in writing, and the landlord will have 42 days to respond. Although the Bill itself does not specify what qualifies as 'unreasonable,' it is anticipated that this will be addressed in subsequent regulations.

Alterations to premises

Private residential tenants may also find themselves with increased flexibility in making minor alterations to the leased premises, such as hanging pictures or posters on walls, without needing landlord’s consent. However, tenants will still be required to seek permission from the landlord for more significant alterations, such as painting a wall, the landlord’s consent must not be unreasonably denied. The categories of alterations which may or may not required consent will be defined in further regulations. The grant of a consent may, however, be contingent upon various factors, including the potential requirement to pay a higher deposit. As the Bill progresses, there may be resistance from landlords who see these enhanced tenant rights as conflicting with the landlord’s fundamental rights as a property owner.

Joint tenancies

Currently, to end a joint tenancy all the tenants must agree to end the tenancy and sign a notice to leave, meaning that if one person does not agree the remaining are trapped in the lease. Under the Bill, relief will be provided to tenants who no longer wish to be a part of a joint tenancy, as it will allow one tenant to terminate the tenancy for all. The remaining tenants interested in keeping the leased premises will have the option to negotiate terms for a new tenancy with the landlord.

Next steps

The Bill now rests with the parliamentary committee which will examine its contents and seek views from various stakeholders.  Based on this input, the committee will produce a report with recommendations regarding whether support for the Bill should be given.

Co-authored by Klaudia Dybas, Trainee Solicitor and Amy Norton, Partner at CMS.