The new Housing (Scotland) Bill: some thoughts on its homelessness provisions

This is the fourth and final post in my series of posts on the new Housing (Scotland) Bill. My first post looked at the overall context and the rent provisions. My second post considered evictions. The third post covered the other miscellaneous residential tenancy reforms. This fourth post considers the homelessness provisions.

In my first blog post, I explained that homelessness law – being the body of law that operates when someone lacks a place where they can legally stay (or those threatened with the prospect of that scenario in the near future) and allows them to present to a local authority (aka a council) so as to be afforded temporary and then permanent accommodation – is largely governed by the Housing (Scotland) Act 1987 (and also some regulations). That legislation will continue to apply after the passage of the new Bill, as modified by the new Bill.

Part 5 of the new Bill is headed “Homelessness prevention”. It is not technically divided into chapters, although it has three headings for the topics it covers: Duties of relevant bodies; Assessment of housing support services; and Tenants affected by domestic abuse.

The new Bill follows on from various bits of groundwork, as digested on the website of the preceding consultation: Prevention of Homelessness Duties – A Joint Scottish Government and COSLA Consultation.

Before turning to the Bill’s homelessness provisions, I’ll highlight some specific reactions to them.

Reaction to the proposed homelessness law reforms

Back in my first blog post, I shared a link to Homeless Network Scotland’s news item. This item from a registered Scottish charity stated the Bill’s publication was a “landmark moment for homelessness prevention”, and noted the measures in the Bill would be welcome at any time (before adding they were an “urgent necessity” in the midst of a housing and cost-of-living crisis). To this, it is worth adding the reaction of Crisis Scotland (the Scottish arm of the British charity Crisis UK). In a post by Maeve McGoldrick (Head of Policy and Communications for Crisis Scotland), she noted that it was “amazing to finally see the Bill introduced” (given they have been calling for new homelessness prevention-type legal duties for years).

What is it that these bodies are so receptive of? Homeless Network Scotland explain that the new “Ask and Act” duties make preventing homelessness a shared responsibility across the public sector. This is to allow a shift from what they call crisis intervention – i.e. only intervening when someone pitches up to their local authority as homeless (or imminently to be so) – towards prevention. As we shall see, the Bill does this by obliging appropriate bodies in the public sector or exercising a social function (such as health boards, Police Scotland, and registered social landlords) to inquire after the people they interact with as to their housing situation at opportune moments and then take action to prevent homelessness should that need arise.

Duties of relevant bodies

Section 41 of the new Bill is headed “Duties of relevant bodies in relation to homelessness”. All of its substantive effect comes about through amending the Housing (Scotland) Act 1987. The headline news about this section is indeed the “Ask and Act” duties, although I’ll work through its provisions roughly in the order they appear.

Being threatened with homelessness (and related local authority duties), applications in respect of a person, and references to another local authority

Subsection (2) of section 41 makes two changes. One of these changes is an important widening of the time period in which someone is categorised as being threatened with homelessness. When this provision of the new Bill is implemented, a prospect of not having a place where you can legally reside (along with the rest of your household) within six months will be enough to be technically in peril of homelessness. This is an increase from the current two months, and even that was an increase of the initial one month. For comparison, the period is eight weeks in England.

The second change in subsection (2) (and a further related amendment in subsection (3)) relates to the new possibility of someone other than the affected person making a homelessness application to a local authority. It will still be possible for someone to apply directly, but now the relevant bodies charged with asking and acting will also be able to make a referral in respect of a person.

Next comes a change to section 32 of the 1987 Act, which is an active provision obliging local authorities to act with regard to the soon to be widened category of persons threatened with homelessness. First, where a local authority is not satisfied that someone has intentionally brought their predicament upon themselves (intentionality being something a local authority might investigate as they see fit), the local authority duty is to take reasonable steps to: (a) remove or, where this is not possible, minimise the threat of homelessness to the applicant; and (b) secure that accommodation is available for occupation by the applicant. This is a change from the current duty to take reasonable steps to secure that accommodation does not cease to be available for occupation.

The duty for securing that accommodation is available for occupation is augmented by a further provision that provides the local authority must take reasonable steps: (a) to secure that the accommodation occupied by the applicant when the application is made continues to be available to them; and (b) only if that accommodation will not continue to be available for occupation by the applicant, to secure that other accommodation is available for occupation by the applicant. There is also a further duty on the local authority to give applicants unintentionally threatened with homelessness advice and assistance where the local authority considers it appropriate to: (a) remove or minimise that threat; or (b) secure that accommodation is available for occupation by the applicant (on a continuing basis or otherwise).

A final “threatened with homelessness” tweak in the new Bill changes what is currently section 32(3), which relates to the duties owed to those who are threatened with homelessness owing to their own wilful creation of that situation. I won’t go into intentionality in great detail here as it is quite a big deal in homelessness law jurisprudence. Suffice it to say in this situation the duty is changed from simply providing advice and assistance to secure that accommodation does not cease to be available for occupation by such a person, to a duty targeting that accommodation continues to be, or is otherwise, available for occupation by the applicant.

Next, there is a change relating to referrals between local authorities. Where it applies, section 33 of the 1987 allows a local authority to pass a homelessness applicant to another local authority that the applicant has a local connection to.

This ability to refer was recently suspended (but not permanently repealed) within Scotland by the Homeless Persons (Suspension of Referrals between Local Authorities) (Scotland) Order 2022 (SSI 2022/356). It is still competent for a Scottish local authority to refer an applicant to a local authority in England and Wales, but not to another Scottish local authority (so the team at Dumfries and Galloway Council could refer an applicant to an equivalent team in Cumbria, but not to an equivalent team in South Ayrshire).

These new reforms allow for applications to be made on behalf of someone by relevant bodies (full details about them below). It might have been a nice question of law as to whether an English or Welsh authority could have shrugged their shoulders in bemusement had a Scottish authority tried to pass such an indirect case to them under the new regime. The matter is put beyond doubt by a new subsection (7) in section 33 of the 1987 Act, clarifying that a Scottish local authority cannot boot such an application south of the border where the application is made in respect of a person by a relevant body. As explained in the Explanatory Notes (at paragraph 121) this will avoid extending the existing duty on English and Welsh local authorities (found in section 34(2) of the 1987 Act).

Duties of relevant bodies in relation to homelessness (aka “Ask and Act”)

As noted, there is to be a new a duty on certain public sector bodies to ask people about their housing situation at an opportune moment and then take action to prevent homelessness should that need arise.

All of this is catered for in terms of new sections 36A to 36D plus some new definitions in section 43 of the 1987 Act. New section 36A provides as follows:

If a relevant body, when assessing the needs of a person in the exercise of its functions, has reason to believe that the person may be homeless or threatened with homelessness, the body must ask the person:

(a) whether the person is homeless or threatened with homelessness,

(b) whether the person is aware of any application under section 28(1) having been made by or in respect of the person and, if so, to give the name of the local authority to whom the application was made, and

(c) whether the person consents to the relevant body making such an application if the relevant body were to be satisfied that it is appropriate.

The relevant bodies are:

• Health Boards and Special Health Boards;
• Integration joint boards (in terms of the Public Bodies (Joint Working) (Scotland) Act 2014);
• Local authorities;
• Police Scotland
• Registered social landlords (aka housing associations); and
• Scottish Ministers (in their capacity relating to prisons and young offenders institutions and those persons detained in such places).

Yes, I had to look up what integration joint boards are too.

This list can be amended by regulations.

Of those bodies, perhaps two will require special consideration, namely local authorities and registered social landlords. This is owing to the fact that councils and RSLs can be the landlord of someone who may face homelessness and might even face that prospect as a result of their actions whilst wearing a different metaphorical hat. This has been an issue for many years: oversimplified, consider the council department that seeks to evict someone from a council house at the sheriff court for a valid reason, and the other council department who has to pick up the pieces. One imagines this is something that will need to be catered for in the Code of Guidance on Homelessness (last updated in 2019: this is perhaps due for a refresh anyway, given recent reforms in relation to local connection referrals).

That point about those relevant bodies aside, if any relevant body is informed someone they have asked is homeless or if they have any other reason to believe that the person may be homeless, the relevant body must make an application under section 28(1) to the appropriate local authority in respect of the person where the relevant body is satisfied certain parameters are met and that there is nothing to disapply that duty. Such an application need only be made if the relevant authority is satisfied: (a) it is appropriate to make the application taking account of the person’s circumstances; and (b) it has the consent of the person to make the application. From the other perspective, the duty does not apply if the relevant body is satisfied that an earlier application is already in play and under consideration for that person.

A slightly different duty arises where a relevant body is is informed someone they have asked is threatened with homelessness or if they have any other reason to believe that may be the case. The first step in such a circumstance is for the relevant body to take any action it considers appropriate in the exercise of its functions and in cooperation with any other relevant body to remove the threat of homelessness to the person where that is possible or, where that is not possible, to minimise the threat. The second step is to make a homelessness application for that person, but this step is only needed where a relevant body is unable to remove or minimise the threat (and also the same parameters are in play for someone who is actually homeless, namely that it is appropriate and they have consent from the person, plus no existing application is in play).

The final relevant body duty stems from new section 36D, which is headed “Duty to have regard to matters relating to homelessness”. This provides that a relevant body must functions, have regard to the need to prevent homelessness and also (more specifically) any guidance issued by the Scottish Ministers in connection with homelessness that is relevant to the exercise of its functions.

Assessment of housing support services

The shortest topic in Part 5 of the new Bill is the “Assessment of housing support services” which is covered in section 42 of the new Bill. Short as this section alone may be, this does not mean it is easy to explain its effects. To do so necessitates some jumping around various statutes and regulations, which may add to the argument in favour of consolidation of homelessness provisions that I alluded to in the first of these posts. What follows here is me making sense of it all, rather than any comment as to the merits of what is happening.

Section 42 amends section 89 of the Housing (Scotland) Act 2001, and that section is headed “local housing strategies”. Section 89 of the 2001 Act does indeed relate to local housing strategies, being something a local authority has to produce when this is requested by Ministers. It also relates to something else that Scottish Ministers can ask of them, being an assessment of housing provision and related services in the relevant area, and it is the wording around that which is amended.

As things stand, such an assessment is, sure enough, to consider housing provision and the provision of related services in that local authority area. Section 89 does however clarify that this is to include in particular the following five considerations:

• the nature and condition of housing stock;
• the needs of persons there for housing accommodation;
• the demand for, and availability of, housing accommodation;
• the needs of persons in the area for, and the availability of, housing accommodation designed or adapted for persons with special needs; and
• any other matter specified by Ministers.

To this, a further particular consider is to be added: “the needs of persons in the area for, and the availability of — (i) services that must be provided in accordance with section 32B(4) of the 1987 Act, and (ii) other housing support services (as defined by section 91(8))”.

The Explanatory Notes helpfully signpost that the section 32B(4) services that must be provided are specified in the Housing Support Services (Homelessness) (Scotland) Regulations 2012 (SSI 2012/331). This means the following services (where they are relevant to enabling a person to occupy, or to continue to occupy, residential accommodation as their sole or main residence)—

• advising or assisting a person with personal budgeting, debt counselling or in dealing with welfare benefit claims,
• assisting a person to engage with individuals, professionals or other bodies with an interest in that person’s welfare,
• advising or assisting a person in understanding and managing their tenancy rights and responsibilities, including assisting a person in disputes about those rights and responsibilities,
• advising or assisting a person in settling into a new tenancy.

The other “housing support services” referred to take us to has a definition of sorts in section 91(8) of the 2001 Act, in that it “includes any service which provides support, assistance, advice or counselling to an individual with particular needs with a view to enabling that individual to occupy, or to continue to occupy, as the person’s sole or main residence, residential accommodation other than excepted accommodation”. Excepted accommodation is defined in regulations from 2002.

In short, the reform in section 42 means that various support services – that might stop someone from becoming homeless in the first place – now need to be considered when a local authority is assessing housing provision and related services.

Tenants affected by domestic abuse

Sections 43-45 of the new Bill address various domestic abuse-related issues for social tenants (or would-be tenants). Section 43 does this by amending the 1987 Act, whereas sections 44 and 45 amend the 2001 Act.

As covered in the Explanatory Notes (at paragraph 128), section 20 of the 1987 Act provides that a social landlord must secure that when selecting tenants for its housing a reasonable preference is given to certain persons, including homeless persons and persons threatened with homelessness. In section 20 there are also certain things that a social landlord must not take account of when someone applies to them, and this can include the ownership/value of any immoveable property owned by the applicant (or any of their household). This is the case where it is probable that occupation of such immoveable property will lead to abuse of the applicant from someone residing there (or from someone who previously resided with the applicant). Section 43(2) of the Bill amends this so that it only has to be probable that occupation of the property will lead to abuse (i.e. it doesn’t matter who the author of the abuse may be).

Also changed by section 43 are two provisions of the homelessness regime in the 1987 Act. Section 24(3) currently provides that a person is homeless if the person has accommodation but it is probable that occupation of it will lead to abuse including from someone who previously resided with the person. Section 33(3) sets out the circumstances when someone runs the risk of domestic abuse such that a local authority cannot refer them to another local authority owing to that (namely the risk of abuse from a particular person). These sections are also amended to simply refer to abuse and remove reference to the author of that.

A further change relates to the meaning of “abuse” in these contexts. This term is extended to include domestic abuse by a partner or ex-partner within the meaning of section 2 of the Domestic Abuse (Protection) (Scotland) Act 2021.

Section 44 of the new Bill is headed “Social landlords: pre-action requirement where domestic abuse is a factor in rent arrears”. This section amends the regime around recovery of possession in the social sector, a regime that begins at section 14 of the 2001 Act. Social landlords must serve a notice on the tenant specifying the ground on which recovery of possession proceedings are raised and, where such proceedings relate to rent arrears, no notice can be served unless the landlord has complied with pre-action requirements in section 14A of the 2001 Act.

Section 44 introduces a new pre-action requirement into section 14A, which applies where a social landlord considers that a tenant has experienced or is experiencing domestic abuse and that this explains or partly explains the arrears. In these circumstances the landlord must (a) take such action to support the needs of the tenant arising in connection with the rent arrears as the landlord considers reasonable having regard to its domestic abuse policy under section 56A [see below], and (b) provide the tenant with details of such other support that may be available to the tenant in relation to domestic abuse as the landlord considers appropriate in the circumstances.

Finally, section 45 of the new Bill (headed “Social landlords: policies about supporting tenants affected by domestic abuse”) inserts a new section 56A to the 2001 Act. This section provides that each social landlord must prepare a “domestic abuse policy” explaining how it will exercise its functions in relation to the needs of tenants who the landlord has reason to believe are affected by domestic abuse with a view to preventing homelessness. This policy must, in particular, include a description of the action that the landlord must take in relation to the needs of a tenant in the circumstances mentioned in the previous paragraph. A social landlord must have regard to its policy under section 56A when exercising its functions and any related guidance issued by the Scottish Ministers.

Conclusion

From my academic lawyer perspective, I don’t really have too much to say about the homelessness provisions of the Bill. They seem laudable and could help to address homelessness at source, whilst also making a difference to tenants with particular problems relating to domestic abuse. Whether they do, that’s more for people with different specialisms from me to comment on, either as the Bill progresses through Parliament or in the years to come.

Assuming they do pass as currently framed, they don’t really change what is justiciable, and (assuming the Bill passes without many amendments) the two key updates for my Housing Law notes for next year in this context are essentially limited to when someone is threatened with homelessness, and what a social landlord needs to do before they can raise eviction proceedings for rent arrears.

As an aside, anyone who has a grumble about what a local authority or indeed a relevant body has done is presumably stuck with the unattractive prospect of a judicial review if they really want to hold someone to account. This strikes me as a missed opportunity.

Okay, that really does conclude my coverage of the Housing (Scotland) Bill. I hope this has been a useful series of blog posts. I would be very keen to hear from anyone else with their thoughts on the Bill, and particularly about my thoughts on the Bill.

The new Housing (Scotland) Bill: some thoughts on tenant personalisation of the let property (by way of pets and alterations), plus other eclectic matters

This is the third in my series of posts on the new Housing (Scotland) Bill. My first post looked at the overall context and the rent provisions. My second post considered the reforms around evictions. This third post considers Part 3 and 4 of the new Bill, which might fall under a broad heading of “other stuff to do with residential tenancies”.

Part 3 – tenant personalisation of the let property

Part 3 of the new Bill is headed “Pets and changes to let property”. It comprises two sections. Both of those sections include a new right for a tenant to bring a pet into the let property, with the first section relating to the private sector and the second the social sector. The first of those sections also addresses a different matter for tenants with a PRT, namely making certain changes to their home. As I’ll discuss below, there are already relevant rules in place for tenant alterations in socially rented homes. For this commentary on the Bill, I’ll deal with the provisions about pets as a whole before returning to private sector alterations.

The other topics covered in this post relate to Part 4 of the new Bill. As noted in the first post of this series, this deals with the otherwise unrelated topics of: unclaimed tenancy deposits; registration of letting agents; tenant termination of a joint private residential tenancy; modernisation of the rules for notice/document service or delivery in the social sector; and the possibility of converting ALL assured tenancies to the more modern PRT. I’ll offer some thoughts on all those matters bar the notice provisions below.

A pet topic

As with my other coverage of this Bill, I am generally trying to avoid getting into the merits of the any of its big-ticket provisions. I’ll touch on some background here though for context. The merits of facilitating the keeping of pets by tenants, or making it trickier for landlords to refuse pets, is something that can be debated: clearly, pets can contribute towards repair, maintenance or replacement costs that might not otherwise exist at the end of a let (and particularly a furnished let), but conversely pets can make a tenant feel more comfortable in their home and that might lead to a longer-term let and/or better care of the let property being taken by the non-animal occupiers. A paper by Rolfe, McKee, Feather, Simcock and Hoolachan entitled “The role of private landlords in making a rented house a home” for the International Journal of Housing Policy touches on this (and there is a useful blog post by Citylets, which refers to that paper). Finally, where someone already has a pet and then needs to move with that pet (perhaps owing to changing family circumstances), a regime that is restrictive of pets can curtail options. This was accordingly something that featured in the Scottish Government’s “A New Deal for Tenants” consultation a few years ago. The results of the Scottish Government’s recent Engagement Questionnaire about pets in rented accommodation can be found online.

Turning to the underlying law, in general terms, at the beginning of any tenancy the position around pets can be agreed between the landlord and the tenant. Given the relative bargaining power of the parties, one can surmise the landlord’s view on this matter would hold more sway than the tenants. Where there is a term of the lease against pets, a tenant keeping one dog in the let property will be in breach of that term: Glasgow District Council v Murray, 1997 Hous. L.R. 105.

The current version of the model tenancy agreement for a PRT (which is available on the Scottish Government website) contains the following about pets:

The Tenant will not keep any animals or pets in the Let Property without the prior written consent of the Landlord. Any pet (where permitted) will be kept under supervision and control to ensure that it does not cause deterioration in the condition of the Let Property or common areas, nuisance either to neighbours or in the locality of the Let Property

Clause 35. Pets

Section 29 of the new Bill introduces a new Part 5A to the 2016 Act – like the rent control area provisions, these pet provisions are just about PRTs (a point I will return to below). New section 64A of the 2016 Act means that (unless the lease has already been drafted to pre-consent pets), there will be system whereby a tenant may keep a pet (or pets) at the let property with the landlord’s consent, and that consent may not be unreasonably refused. An amendment to the statutory terms for PRTs that are required in a such tenancy (by section 8 of the 2016 Act) is also made later in the Bill, to capture that a tenant may keep pets at the let property in accordance with Chapter 1 of a new Part 5A (and a separate amendment caters for the reform I discuss below, to make changes to the let property in accordance with Chapter 2 of Part 5A).

“Pet” is a defined term. It means an animal kept by a person mainly for: personal interest (including as regards its welfare, treatment or training); companionship; ornamental purposes; or any combination of those. The “mainly” might allow an animal to occasionally do something on a commercial basis: I recall a former colleague’s tale about her (male) dog being clocked by someone involved in the breeding of dogs whilst they were out walking. Her dog was deemed to be a suitable daddy dog. This was agreed to, and a fee was paid for this. That dog would, I would submit, still be a pet even after one deed was done, but might not be if an owner made a business of this.

Requests for the landlord’s consent to keep a pet are to be in writing and must fulfil any other requirements prescribed by regulations. In turn the landlord must respond (in writing, and in compliance with any requirements prescribed in regulations) within 42 days of receipt of the request, to notify the tenant whether they consent (with or without condition) or refuse to consent to this. Conditions must be “reasonable”.

The statute does not state what might be reasonable for the landlord to do or stipulate here, but (as can be the case with legislation these days) this is to follow in regulations as there is power conferred on Ministers to make provision about when it is reasonable to refuse consent to keep a pet and about when a consent condition for keeping a pet is reasonable.

(I would prefer if this was simply in the primary legislation. I understand that specific regulations on this topic will allow for a targeted consultation, but I would have thought/hoped they could have included the reasons here so they could just be done with it. So be it.)

When this matter was aired by the Scottish Government previously, some possible reasonable reasons for refusal and reasonable conditions attached to consent were mooted. Reasonable reasons for refusal could include the following:

• The property is unsuitable for the type and number of pets requested.
• The animal is listed in the Schedule to The Dangerous Wild Animals Act 1976.
• The animal(s) are being kept for commercial purposes.

Of those, the second has been catered for in the Bill, by saying its provision noting that “‘animal’ does not include a dangerous wild animal within the meaning given by section 7(4) of the Dangerous Wild Animals Act 1976.”

To this, one might add that title conditions affecting the let property would surely be relevant. Indeed, the Consultation on the New Deal for Tenants showed an awareness of this when comparing how different occupation arrangements would be restricted in terms of pet-keeping. A possible restriction on owner occupiers “in the property deeds” was acknowledged. An earlier blog post on this blog by Andrew Todd touched on this possibility. By chance I also chatted this matter through with my friend and former colleague Professor Andrew Simpson recently, and he told me he knew of a property with a burden against the keeping of bees and pigeons. It would be perverse if a tenant could force a landlord into consenting to the breach of a burden only to find that a neighbour could pursue then raise an action for a breach of that burden. It will also be recalled that section 9 of the Title Conditions (Scotland) Act 2003 states that, “A negative burden… is enforceable against… the owner, or tenant, of the burdened property”, so a landlord objecting to a pet where there was a relevant negative burden in such circumstances could be saving the tenant from enforcement action. This ought to be covered in any regulations (and arguably should have been covered in the new Bill).

Moving away from refusal, reasonable conditions for approval were said to include the following:

• The payment of an additional amount of deposit within certain limits where it is reasonable to do so…
• The tenant must take all reasonable steps to supervise and keep pets under control and ensure they do not cause a nuisance to neighbours.

One other point to note about the private landlord here is that their inaction cannot be taken is consent, owing to section 64B(5): a non-reply is deemed a refusal of consent.

The other important feature of this scheme is a tenant’s right to appeal to the First-tier Tribunal. The tenant must do this within a maximum of 84 days. That overall deadline results from the operation of two separate time periods: they have 42 days to tell the landlord they plan to appeal in response to the landlord’s response or deemed refusal, and then they have a further 42 days from that point to go to the First-tier Tribunal. This seems important for a tenant to note: there are a couple of procedural trip hazards, and also the total period to prepare the appeal could be substantially less than 84 days where the initial intimation to the landlord was prompt.

My impression is that the First-tier Tribunal (Housing and Property Chamber) is not exactly casting around for more work. It seems they are nevertheless going to get this new role. Any appeal can be against a condition specified by the landlord or a refusal of consent where the tenant feels such condition(s)/refusal to be unreasonable, or against a deemed refusal occasioned by the landlord’s non-reply. The tribunal can then refuse the appeal or make a “consent order”. “Consent order” is defined as:

an order requiring the landlord to give the tenant notice that the landlord consents to the tenant keeping of the pet to which the appeal relates at the let property with or without such conditions as the First-tier Tribunal may specify.

Section 64D(7)

I can’t decide whether “the tenant keeping of the pet” is expressed correctly. Maybe this will be revisited for clarity.

Turning to the social rented sector, the Model Scottish Secure Tenancy Agreement is relatively quiet about pets (allowing content to be filled in at clause 2.6, with suggestions for that). As for the context of the social sector, in its preparatory work for this Bill, the Consultation on the New Deal for Tenants noted the following of the social sector:

Pets are also allowed only by agreement of the landlord but permission is usually granted unless there are reasonable reasons for not doing so. As properties in the social sector are generally unfurnished, the costs of any damage to furniture or decoration is borne by the tenant. Landlords may designate particular types of property as being unsuitable for a particular type of pet and this will be reflected in the tenancy agreement at the time a tenancy is offered.

Section 30 of the Bill inserts a new section 31A to the Housing (Scotland) Act 2001. It begins by stating, “It is a term of every Scottish secure tenancy that the tenant may keep a pet (or pets) at the house with the consent in writing of the landlord, which must not be unreasonably withheld”. The definition of “pet” tracks the private sector scheme, and similarly Ministers to make regulations about what conditions attached to keeping a pet might be reasonable and when it is reasonable to refuse consent to keep a pet. There are, however, two key differences between the private and social regimes as I see it.

The first difference is that where a social landlord does nothing in response to a tenant’s request within a month (or otherwise fails to comply with new paragraph 8F of Part 1A of Schedule 5 to the 2001 Act), that landlord is to be taken as having consented to the application. This is the opposite consequence for silence as compared to the private sector scheme.

Secondly, and unsurprisingly given tenants in the social sector have no route to the First-tier Tribunal for any other disputes, there is no specific appeal process provided. Disgruntled social tenants presumably face a trip to the sheriff court if they think their social landlord is being unreasonable. This is unlikely to be an attractive prospect, but at least it seems to be offset by the apparently more generous tradition of allowing pets in social lets in the past (in part because the tenant tends to bring their own furniture to such a property) and the default application of the new regime falling on the side of consent rather than deemed refusal.

Changes to Privately Let Property

The Bill has little to say about a social tenant making changes to the let property. When contrasted with the private sector provisions in the new Bill, this might make at first blush you think social tenants have been overlooked. This is not the case, as section 28 of the Housing (Scotland) Act 2001 already allows for them to do interior decoration and ask for permission for other works: a resource on the Shelter Scotland website explains the process for that.

There are some slight differences between the new private provisions and the existing social provisions. One of those differences also indirectly highlights a similarity: both regimes say landlords need to consent to bigger works, but that consent cannot be “unreasonably withheld” (in the social context) or “unreasonably refused” (in the private context of new section 64H of the 2016 Act). The slight change in language is, I think, insignificant.

The social regime carves out “interior decoration” from that which needs landlord consent. A social tenant can accordingly plough on with that, but will generally need consent for: alteration, improvement or enlargement of the house or of any fittings or fixtures; addition of new fittings or fixtures; and the erection of a garage, shed or other structure. (It may be that equality law considerations also mean some changes need to be allowed to happen – more on that below.) What about the private sector regime?

The model tenancy for PRT currently contains the following:

The Tenant agrees not to make any alteration to the Let Property, is fixtures or fittings, nor to carry out any internal or external decoration without the prior written consent of the Landlord.

Any request for adaptations, auxiliary aids or services under section 37 of the Equality Act 2010 or section 52 of the Housing (Scotland) Act 2006 must be made in writing to the Landlord and any other owners of the common parts, where appropriate. Consent for alterations requested under this legislation should not be unreasonably withheld. If no consent is given for the adaptations you may appeal to the Tribunal in relation to section 52 (or sheriff court in relation to section 37) within 6 months of being notified of the decision. Before doing this, you may find it helpful to discuss your circumstance with your local Citizens Advice Bureau, Shelter Scotland or the local authority for the area where the Let Property is situated.

Clause 28. Alterations

That is accordingly the baseline. This adverts to the equality law and an existing specific right to adapt a privately rented property from the 2006 Act. The new system envisages additional levels of alterations, namely “category 1 changes” and “category 2 changes”. A category 1 change needs the consent of the landlord. A “category 2 change” might need the consent of the landlord, but it can be pre-consented to in the terms of the lease. Category 2 changes have another criterion, namely that they happen six months after the commencement of the lease (and only then can consent be sought, or pre-consent be applied).

What is the difference between a category 1 change and a category 2 change? We await regulations for that. Regulations that specify one or more changes (or kinds of change) that may be made to privately let property can be made under new section 64L, and such regulations are to specify which change falls into which category. The Explanatory Notes are silent as to examples of each category, but the Engagement Questionnaire suggests “putting pictures and posters on walls” would be a category 1 change. Elsewhere in that document, one of the questions asked suggests “painting walls and installing wall shelves” could be a category 2 change.

Meanwhile, as with pets, there is power conferred on Ministers to make provision about when it is reasonable to refuse consent and about when a consent condition for an alteration is reasonable. Also as with pets, a landlord’s non-response is to be taken as a refusal, and a similar appeal regime (with identical timescales) applies for any appeal.

I’m not sure there is much more that can be said about this all at this stage, as the categorising regulations are so crucial to how this regime is operated. At least we know how the scheme will function when that comes to be clarified.

That concludes the coverage of Part 3 of the new Bill.

Part 4 – Other matters

Part 4 of the new Bill is headed “Other matters relating to tenants”. The matters covered will not affect all or perhaps even a majority of tenants, but they may be of particular importance in circumstances where they do crop up.

Tenancy deposits claimed by neither tenant nor landlord

The first of the miscellaneous matters included in Part 4 of the new Bill relates to unclaimed tenancy deposits. It has been standard practice for many years for an incoming tenant to pay a deposit that can be applied in the event of them causing damage to the let property or leaving without settling all rent payments lawfully due to the landlord. The Housing (Scotland) Act 2006 introduced the framework for regulated tenancy deposits (held by an approved tenancy deposit scheme provider (for example, SafeDeposits Scotland), rather than landlords simply holding a tenancy deposit in their own bank account), and later regulations (in force since 2012) implemented the scheme that we are now used to.

Generally speaking, at the end of a tenancy deposit funds will be returned to the tenant or (if there have been issues with the let property beyond “fair wear and tear”) applied to the landlord’s legitimate expenses. For several years now, unclaimed deposits have proved to be a bit of an issue for scheme providers (per this Law Society of Scotland news item from 2015 and this Shelter Scotland blog post from 2017). Scheme providers try to and do track down tenants when they can, but where they are unsuccessful any money would in theory go to the Crown.

The new Bill gives a framework to introduce a clear five-year period for any relevant application to be made for the repayment of a tenancy deposit. Where no such claim is made, Scottish Ministers can direct the scheme administrator of an approved scheme to transfer unclaimed deposits to them or to a fund administrator. Transferred money may then be used for the purposes of: providing or securing the provision of advice, information or assistance to private tenants in relation to their rights as tenants (or otherwise promoting or supporting their interests; preventing private tenants from becoming homeless; and paying or recovering administrative costs that are reasonably incurred when reporting on the use of that transferred money. “Private tenants” is broadly defined, so as to also include any student tenancy arrangements. Scottish Ministers will be able to change these purposes by regulations; presumably if they did modify these purposes, they would be mindful of their recent Engagement Questionnaire results about what these funds might be used for.

One other thing the Bill does is cater for former occupant with unpaid deposits who have come out of the woodwork after five years. This allows Scottish Ministers, on application, to pay an equivalent sum to that former occupant if they have a reasonable excuse for not applying in the initial five-year (provided, of course, that they would have been repaid had they made a timeous application).

Letting agent reform

The Housing (Scotland) Act 2014 introduced a scheme for the registration of letting agents (and there is now an associated Code of Practice that can be brought to bear against such letting agents, enforceable before the First-tier Tribunal). The new Bill makes some changes to: (a) the application stage (including disclosure requirements where a partnership, company or other body is the applicant); (b) ongoing reporting requirements for registered agents, allowing for regulations to be made as to what “relevant information” needs to be provided; (c) the process for cleaning up the register (including around situations when an agent no longer exists); and (d) the time period that a refusal or removal of an agent needs to be noted on the register (which is increased from one year to three years). There is also a tweak around the Scottish Ministers’ powers (or any authorised person’s powers) to obtain information and carry out inspections around monitoring compliance with the 2014 Act provisions around letting agents, to clarify that any requirement for a person to furnish information in relation to sections 52 and 53 of the 2014 Act does not apply where someone would be entitled to refuse to provide the information in, or for the purposes of, proceedings in a court in Scotland.

I have absolutely nothing to say about any of the letting agent reforms, other than to opine they all seem sensible enough.

Ending joint tenancies

House-share arrangements, such that there are co-tenants (or joint tenants) sharing in a PRT have caused a few issues. I covered this relatively recently in my “Joint tenancy trap” blog post. The new Bill seeks to address this by way of section 38, headed “Private residential tenancies: ending a joint tenancy”.

Section 38 amends sections 48 and 49 of the 2016 Act and inserts a new section 48A between those sections. Section 38 of the Bill does this sequentially in terms of what will be the 2016 Act, adopting an order which amends section 48, introduces new section 48A, then finally amends section 49. I will do likewise.

The amended section 48 caters for a joint tenancy situation in that it allows one of the joint tenants to end a PRT (which that tenant will do by giving the landlord a notice that meets the statutory requirements). It does this by changing what reference to “a tenant” means in section 48, such that all joint tenants will no longer need to act as a polity in order to trigger its effects. Section 48 is also modified so that the tenancy that is under threat does not come to an end if the interest of the terminator joint tenant is assigned to someone else before the tenancy was due to come to an end (normally 28 days after the relevant notice, or such other period as might have been agreed by all parties).

New section 48A introduces a notification system for the other joint tenants, such that they can’t simply have the rug pulled from under them. This requires the joint tenant who wants out to give a written pre-notice to every other joint tenant and the landlord at least two months before the ultimate notice to end the tenancy. Further requirements of that pre-notice are to be catered for by regulations, but that’s not all that must happen before one joint tenant can bring the whole arrangement crashing down.

First, the ultimate notice to terminate the tenancy that follows on from the pre-notice must be given within 28 days of the two-month pre-notice period coming to an end. Second, that ultimate notice must be accompanied by a statement that a pre-notice has been given to every other joint tenant, and yet another a regulation-making power is given to the Scottish Ministers to enable them to provide that the notice must be fortified with the supporting evidence that they specify.

Finally, section 49 is modified so that it works in situations where there is joint tenancy and one of them wants out, such that in one circumstance the word “tenant” can mean a single “joint tenant” (i.e. the one serving the notice), but in all other circumstances of that section the “tenant” means all of the joint tenants as polity (such that, for example, any departure date prior to the expiry of the usual 28 day period would need to be agreed by all parties).

These provisions took me a little bit of time to get my head around. Comprehension difficulties aside, I do think they work, and I also think they go some way to allowing a joint tenant not to be trapped in a situation (as Douglas Bain and Mitchell Skilling blogged about some years ago) whilst also ensuring a tenant cannot torpedo a PRT for their (likely former) friends without giving them a chance to make different plans, or at the very least brace themselves for a few months. I’ll look forward to hearing what the various interested parties think about this as the Bill progresses through Holyrood.

Converting older tenancies

Another miscellaneous provision, and the last one that I will consider here, allows for the conversion of all existing assured tenancies to PRTs. This would apply to private lets entered into between 2 January 1989 and 1 December 2017 that are still subsisting as assured tenancies to this day and are still governed by Housing (Scotland) Act 1988. Section 40 of the new Bill will allow regulations to be made (after suitable consultation) so as to trigger this mass conversion event (but those regulations must afford a period of at least a year before this conversion happens).

The powers that would be conferred here need to be differentiated from individual conversion opportunities that already exist. The party-instigated conversion in section 46A of the Housing (Scotland) Act 1988 allows assured tenancies to be converted to PRTs by agreement between the landlord and the tenant. Separately, in terms of section 31A of the 1988 Act assured tenancies can also become a PRT when a sole tenant dies and their resident spouse or civil partner (or someone living with the deceased as if that domestic relationship was in place) wishes to continue to live there as their principal home and the conditions in section 31 are met.

Scottish Ministers will need to be careful before making a new blanket conversion diktat. There are also human rights issues, particularly in terms of the protection of the peaceful enjoyment of possessions, that must be considered. Sure, blanket conversion will have the benefit of simplifying things (not least for solicitors and tribunal members, who will then be able to gravitate to the 2016 Act with impunity), but there are quite a few differences between the regimes. One example is that an assured tenancy does not afford an eviction ground related to the landlord wishing to sell with vacant possession. Other examples come from this new Bill, such that only PRTs are affected by any rent control and the rights to personalise the let property by the introduction of a pet or the making of alterations (given the provisions are (deliberately?) not drafted widely enough to catch assured tenancies). The policy memorandum for the Bill (at para 328) seems to solely view the human rights compliance of the “powers to convert 1988 Act tenancies into 2016 Act tenancies” through the prism of “the terms of a landlord’s tenancy agreement changing”, but it must be remembered it is also altering the terms of the tenant’s tenancy agreement, as my (deliberately chosen) first example shows.

Blanket conversion also does not have the same protection from critique that individual conversion does – for example, if landlord and tenant choose to amend their agreement, that’s on them, and in a succession situation the incoming tenant benefits from a PRT when they would otherwise have had nothing and thus is in less of a position to argue for an assured tenancy. Furthermore, blanket conversion may have an apparent simplicity at a macro level, but the possible complications at a micro level need to be understood and considered.

I remain to be convinced blanket conversion is appropriate. In an ideal world, my own preference would be to allow the new rent and personalisation provisions of the Bill to apply to assured tenancies as well as PRTs, and then do all that is possible to not jump the gun in terms of converting every assured tenancy to a PRT until we really are sure that the remaining numbers of assured tenants are truly trivial. And yes, this would really be “in an ideal world”: I appreciate and acknowledge that bringing rent control areas and pets/alterations into the 1988 Act would be quite a monumental effort in drafting terms. A secondary option might be to change the proposed scheme to allow assured tenancy tenants to opt out of automatic conversion, should they wish to (for example) preserve their eviction grounds as they are. I’ll be keeping an eye on this aspect of the new Bill as it moves through Holyrood.

Conclusion

That draws to a close this third blog post on the miscellaneous provisions of the new Housing Bill. Coupled with the earlier posts on rent and evictions, that also concludes my coverage of residential tenancy matters. The next post will consider Part 5 of the Bill, and the homelessness provisions therein.

The new Housing (Scotland) Bill: some thoughts on its eviction provisions

This is the second in my series of blog posts on the new Housing (Scotland) Bill. My first post set out some of the overall context before looking specifically at the rent provisions. This post looks at the second broad aspect of the Bill’s residential tenancy coverage, namely the law around a landlord recovering possession of the let property where the tenant is not amenable to that: that is to say, eviction from a home.

Part 2 (of the Bill, and of my blog post series) – Evictions

Removing someone from possession of land is always quite a big deal in Scots property law and will require some kind of court or tribunal process for that to happen legally. There are extra considerations when the land you are removing someone from doubles as their home. This is all reflected in the various statutes that deal with eviction in the private sector and social sector, and also in relation to the statutory damages that can be payable when a residential occupier is unlawfully evicted from their home.

The new Housing Bill reforms eviction in two ways. Sections 24 to 27 introduce a new duty for sheriffs or tribunal members to consider whether it would be reasonable to somehow delay the effect of any order that would bring a tenancy to an end. Section 28 reforms the existing law around unlawful eviction. I’ll consider these in turn.

The duty to consider delay

The First-tier Tribunal (Housing and Property Chamber) (as the forum for eviction proceedings concerning private lets) and the sheriff court (the forum for social lets) already have much to consider when deciding whether an eviction is to be ordered. In addition to establishing whether an eviction ground has been sufficiently evidenced (on the balance of probabilities), they may also need to establish whether pre-action requirements have been met (if rent arrears are the reason for the eviction) and in many cases they will need to weigh up the circumstances of the landlord and the tenant to determine whether it is reasonable to grant the order.

The new provision introduces another step for the majority of evictions. The tribunal or sheriff will have to consider whether it would be reasonable to select a date that delays the effect of giving the landlord the right to recover possession of the let property given the circumstances, but only in relation to eviction grounds that are such that the tenant might be deemed worthy of protection; for example, there would be no delay where a tenant has gone AWOL, or when the tenant has engaged in particular criminal or antisocial conduct.

Whenever this exercise is to be undertaken, the tribunal/court must consider whether an non-delayed order for possession would cause the tenant or a member of the tenant’s household to experience: financial hardship; some kind of detrimental health effect; or another detrimental effect due to the affected person having a disability (in terms of the Equality Act 2010). For private lets, this is to be counterbalanced with a consideration of similar factors from the other perspective, namely whether a delay would cause the landlord to experience: financial hardship; a detrimental health effect; or have another detrimental effect due to the landlord having a disability. There is then a new consideration of whether a “seasonal factor” would contribute to any financial hardship or detrimental effect on the tenant and, if relevant, a member of the tenant’s household or the landlord. “Seasonal factor” is not defined, but this would relate to, for example, casting someone to the winds during the winter.

The Explanatory Notes offer the following, in the context of the First-tier Tribunal weighing up what to do when a landlord is seeking to evict a tenant with a PRT.

The Tribunal may consider, for example, whether disruption caused by the ending of a tenancy during exam periods for school-aged children or University students would have a detrimental effect on the health of the tenant or a member of the tenant’s household and, accordingly, whether it would be reasonable to delay the ending of the tenancy. Periods of religious observance and some traditional festive periods could also result in a tenant or a member of the tenant’s household experiencing heightened physical, emotional or financial stresses. The Tribunal may also therefore consider, for example, whether the ending of a tenancy during or around any such period might cause the tenant or a member of the tenant’s household to experience financial hardship or have a detrimental effect the individual’s health and, accordingly, whether it would be reasonable to delay the ending of the tenancy. The Tribunal may also decide that it is reasonable in the circumstances to delay the ending of the tenancy for other reasons.

Paragraph 88

It is unfortunate that the examples in the Explanatory Notes are framed only from the perspective of the tenant. To be clear, that’s not me aligning with any landlord lobby, it’s just me bemoaning that the examples here don’t take into account something that the statute expressly suggests the tribunal “may consider in particular”. It would be better for all parties to have a steer about what is relevant from the landlord’s side.

Other than that heckle of the Explanatory Notes, I don’t have too much to say about these provisions really. They seem workable, although it might be debated that a fixed date range in relation to seasonal factors (as can be seen with the trêve hivernale that operates in France) could have brought some (blunt) clarity. Mind you, not having a date range allows for some flexibility. Another comparison point about flexibility is that the temporary cost of living eviction moratorium applied on a relatively general basis to delay evictions for six months, whereas this proposal is not so regimented. In the private sector, consideration of the landlord’s circumstances when setting any delay period might allow for a shorter period than that which prevailed when the Cost of Living (Tenant Protection) (Scotland) Act 2022 was in force.

As to whether these provisions are desirable is largely a policy call, albeit one that is informed by the practical reality of any interaction of those who are evicted with the homelessness regime. Leaving that interaction with homelessness law and services to one side, and turning now to the most common private letting vehicle of the PRT, it should be acknowledged that this reform follows on from the removal of the “no fault” eviction ground (as compared to the short assured tenancies that dominated the private rented sector before 2017) and the introduction of a “reasonableness” assessment for all evictions in the aftermath of the Covid-19 pandemic. How this all plays out in terms of landlord behaviour (and particularly the potential for existing landlords to leave the market) and the housing stock that might be released in consequence is something that is beyond the scope of this blog post.

Moving to the social sector, section 16 of the Housing (Scotland) Act 2001 sets out what a sheriff can do in possession proceedings. It allows the court to adjourn proceedings relating to the tenant’s behaviour (i.e. conduct grounds as found in certain paragraphs of schedule 2). The sheriff also has the power to impose conditions as to the payment of rent or otherwise when making such an adjournment (which it might do if there is a matter that is somehow outstanding which affects the level of arrears). Guidance was issued by the Sheriffs Principal in 2022 to the effect that this power is normally limited to one adjournment, for a maximum 12 weeks. The interaction with any new delay and this existing adjournment power (and any new guidance) will accordingly be something to look out for.

One final pedantic point in relation to the social side of things. Section 25 of the new Bill introduces a new section 16A to the 2001 Act, and within that there is a list of eviction grounds where there is no duty to consider a delay. The narrated grounds are those which appear in paragraphs 2, 5, 7, 8 and 15A of schedule 2.

To simplify, the first four of those relate to a tenant’s immoral/illegal behaviour (paragraph 2), a tenant abandoning the property (paragraph 5), or the tenant behaving antisocially (grounds 7 and 8). The final ground, from paragraph 15A, relates to a situation of domestic abuse, allowing a social landlord to act against a tenant where that tenant is a sole tenant and has engaged in behaviour which is abusive of a partner or ex-partner.

By dint of that new paragraph 15A eviction ground, a social landlord can enter into a new tenancy with the partner or ex-partner who is the victim of the abusive behaviour. The only problem is, that ground for possession does not yet exist: section 22 of the Domestic Abuse (Protection) (Scotland) Act 2021 has never been brought into force. My drafting preference for this new Bill would be to not clutter it with a reference to a provision that does not have any legal force. Naturally, if section 22 of the 2021 Act is to brought into force in the intervening period, this objection evaporates.

Unlawful eviction

The one other thing to mention in Part 2 is the standalone section 28, headed “Unlawful eviction: notification and damages”. Its provisions around illegal eviction may look familiar, given they were shoehorned into the Cost of Living (Tenant Protection) (Scotland) Act 2022. That aspect of that statute expired on 31 March 2024, at which point the measure of damages that could be awarded against anyone recovering possession of a property by irregular means reverted to the original scheme in the Housing (Scotland) Act 1988 (based on the difference between the value of the property with and without vacant possession). The related notification provisions – ordaining that any court or tribunal making an order awarding damages must notify the Scottish Housing Regulator, Police Scotland and/or the relevant local authority (depending on the nature of the occupation that was brought to an end) – also fell away.

The Cost of Living (Tenant Protection) (Scotland) Act 2022 introduced these changes to the law by amending sections 36 and 37 of the Housing (Scotland) Act 1988, but those amendments were not particularly linked to the cost-of-living emergency. They found a home in the 2022 Act for the simple reason that it was an available legislative vehicle for a fairly sensible reform. It is accordingly no surprise that the next available legislative vehicle, namely this new Bill, contains an almost identical regime on an open-ended basis.

The penalty calculation reform is indeed identical – damages are now (once again) to be based on a multiplier of the outgoing occupier’s monthly rent, ranging from 3 to 36 depending on what the court or tribunal thinks appropriate (i.e. up to a maximum of three times the previous annual rent). The only slight change in the Bill’s as compared to the Cost of Living (Tenant Protection) (Scotland) Act 2022 is a tweak to the definition of “rent” in order to reflect the fact that damages can be payable to any residential occupier under the 1988 Act (including those without a formal tenancy), whereas the 2022 Act was (on reflection incorrectly) drafted so as to refer specifically to tenants.

Conclusion

That draws to a close this second blog post on the eviction provisions of the new Housing Bill. Coupled with the earlier post on rent, that should cover off the most important provisions as far as residential tenancies are concerned. The next post will consider the more eclectic content of Parts 3 and 4 of the new Bill, and a final post will consider its homelessness provisions.

The new Housing (Scotland) Bill: some initial thoughts, with particular reference to rent and rent control areas

The hotly anticipated Housing (Scotland) Bill was introduced to the Scottish Parliament on 27 March 2024. You can access the Bill and related materials on the Scottish Parliament’s website, and read the Scottish Government news release on its website.

Being a land reform hipster who also teaches a Housing Law module at the University of Strathclyde, it’s fair to say the one-two of the Land Reform (Scotland) Bill and the Housing (Scotland) Bill being introduced at Holyrood have kept me occupied of late. I can only imagine how busy the folks working on these Bills behind the scenes have been. Anyway, here’s me offering some initial thoughts on the latter of those. This post will not be as detailed as my earlier Land Reform (Scotland) Bill post, although I hope to signpost some resources (and hopefully deliver some insights) along the way. Also, unlike that data dump/holistic blog post, I’m going to divide my coverage into (relatively) bite-sized chunks. This post will offer a bit of an overall overview, and then turn to the substantive issue that accounts for just over one-third of the Housing (Scotland) Bill’s contents.

As with my Land Reform Bill post, I will start by giving a miscellaneous list of reactions to the Housing Bill. Some of these are captured in a thread I posted on X-formerly-known-as-Twitter. A useful resource is also available on the Scottish Association of Landlords’ website, in the form of a list of news stories where John Blackwood (its chief exec) was quoted. (He’s been busy.) Some other resources are also shared here, these particular resources being selected try to give a decent spread of views.

• A news item from Living Rent, entitled, “The Scottish government finally published the Housing Bill! Here are our thoughts”;
• A press release from Scottish Land and Estates (writing from a perspective of its members letting out homes in rural areas), headed, “New Housing Bill Repeats The Mistakes Of Previous Legislation”;
• In addition to the aforementioned list of stories, The Scottish Association of Landlords posted a release headed, New Housing Bill published, the final sentence of which notes, “SAL will lobby for changes to the Bill to lessen the impact on landlords and will keep members updated on the progress of the proposed legislation as it works its way through parliament”;
• Coverage in The Times, being an article by Greig Cameron (£) and a column by Alex Massie – irrespective of whether you agree with Massie’s take (and I do take some issue with the apparent scepticism towards rent controls in any context, not to mention that column’s focus on just the actions of this devolved government, on which more below), you have to acknowledge his final sentence is an absolute gem;
• A thread by Laurie Macfarlane (@L__Macfarlane) on rent controls on Twitter/X;
• A thread by Gordon [Palestine Flag]/rent controls fan account (@istreasatuatha) on Twitter/X giving his initial reaction to the Bill; and
• A post by Homeless Network Scotland, entitled, “Housing (Scotland) Bill published” (with an understandable focus on the homelessness prevention aspects of the Bill rather than the residential tenancy side of life).

No slight on anyone not included in the above list is intended.

Some of this post a bit technical at times. With a better publisher/editor it could have been a bit shorter, although it remains unashamedly a post that is about law reform in this specialised practice area. As such, anyone with some underlying knowledge of that area and/or proficiency around legislative reform may find this easier to plough through as compared to other readers. I’m also conscious some of my (hopefully) useful or personalised observations are buried towards the end and some readers (with no criticism intended) might not get there, or be a tad enervated when they do. More strategic readers may wish to skim this post until my “Observations on the Bill’s rent provisions” heading (where, in very brief summary, I say the new Bill’s rent provisions contain some neat aspects but may also have some wrinkles, and also that some of the rhetoric that is being aimed at the rent provisions could perhaps be dialled down a tad).

Structure and context

The Housing (Scotland) Bill comprises seven Parts, plus a Schedule (of minor and consequential amendments to other statutes). Together, these provisions will reform the law around homelessness and both social rented and private rented sectors.

Social tenancies – where the landlord is either a local authority (often called a council) or a registered social landlord (often termed a housing association) – are largely governed by the Housing (Scotland) Act 2001.

Private lets – where the land is not a local authority or RSL – are normally “private residential tenancies” (“PRTs”) in terms of the Private Housing (Tenancies) (Scotland) Act 2016, although some older statutes can govern tenancies entered into before December 2017.

Homelessness law – whereby those lacking a place where they can legally stay (or those threatened with the prospect of that scenario in the near future) can present to a local authority so as to be afforded temporary and then permanent accommodation – is largely governed by the Housing (Scotland) Act 1987 (and also some regulations).

All of these statutes have been amended since they received Royal Assent (and indeed the second-oldest statute amended the oldest statute, and the youngest has amended the other two!). The new Bill brings further amendments to all of them. This led the experienced housing lawyer and First-tier Tribunal (Housing and Property Chamber) member Jim Bauld to put out a call on Twitter/X for a consolidation statute. It is difficult to disagree with this. At the very least, the homelessness provisions seem ripe to be taken from the middle of a 1980s Housing Act and rendered into a fresh Homelessness (Consolidation) (Scotland) Act.

The seven Parts of the new Bill are as follows.

Part 1 – the longest – is headed “Rent”. It has three chapters: “Designation of rent control areas”; “Rent control areas: modifications of the 2016 Act”; and “Other restrictions on rent increases”.

Part 2 is headed “Dealing with evictions”. It does not strictly have chapters, but if it did these would be “Evictions: duties to consider delay” and “Damages for unlawful eviction”.

Part 3 is about “Keeping pets and making changes to let property”.

Part 4 contains “Other matters relating to tenants”. This deals with the otherwise unrelated topics of: what to do with deposit money that has not been claimed back by a tenant after the lease has ended; registration of letting agents; tenant termination of a joint private residential tenancy; modernisation of the rules for notice/document service or delivery in the social sector (moving away from a strict deployment of the term “recorded delivery letter” in one context); and the possibility of converting ALL assured tenancies to the more modern PRT. I’ll offer some thoughts on all of those (save the mundane yet important notice provisions reform) in a future post.

Part 5 is about “Homelessness prevention”.

Part 6 contains “Other housing matters”. This contains provisions about the (esoteric) regulation of mobile homes, fuel poverty, and disclosure of information to the relevant ombudsman.

Part 7 – Final provisions – deals with regulation-making, interpretation, amendments, commencement and the short title – when it becomes an Act this will be the Housing (Scotland) Act 2025.

No further comment will be offered on Parts 6 and 7. I’ll work through the rest of the Bill sequentially, starting with this post on the Rent provisions.

Rent

We knew that long-term rent controls were coming, what with the recent Programme for Government and indeed prior soundings (including the Bute House Agreement) from the parties with the numbers to command the Scottish Parliament (not to mention Scottish Labour have been dabbling with fair rent proposals over the years). We have also had some temporary measures to curb in-tenancy rent increases in some way, shape or form since the Cost of Living (Tenant Protection) (Scotland) Act 2022 started to bite. The last of those measures – rent adjudication – will expire in March 2025. The 2016 Act itself also contained a regime that could – if deployed – mitigate rent increases in designated “rent pressure zones”. So it is RIP RPZs, and we barely even knew you. Rent pressure zones never existed in the wild, and the framework for them is now to be replaced by a framework for “rent control areas” (which I will abbreviate to “RCAs”).

Laying the RCA groundwork

The outgoing rent pressure zone framework placed local authorities in a central role, in terms of evidence gathering and making a case for their introduction to Scottish Ministers (i.e. central government). Given there was never a successful RPZ it is difficult to offer anything other than pure speculation as to whether this was the best approach. Either way, local authorities are put to the front and centre of the rent provisions of the new Bill. Starting with section 1, a local authority is obliged to assess the level of rent payable AND the rate of increase in rent payable under “relevant tenancies” of properties in the area of the local authority, and then report on that to Scottish Ministers. The Bill is framed such that this needs to be done by 30 November 2026 – Happy St Andrews Day, local authority boffins – and then every five years, although that initial date and the time period for further reporting can be changed by regulation.

A ”relevant tenancy” means a private residential tenancy or an assured tenancy under the Housing (Scotland) Act 1988 – i.e. this is not about rents paid by lodgers living with a resident landlord, or students who pay rent to a university or dedicated provider of student accommodation, or rent paid by social tenants. It is also not about tenancies governed by the Rent (Scotland) Act 1984 (which will be the case for unbroken lets entered into prior to 2 January 1989) – they already have a dedicated fair rent regime and data about them is not relevant to this exercise.

In addition to furnishing the Scottish Ministers with statistics, the report is to state (with reasons) whether the local authority recommends that they designate all or any part of the area of the local authority as a rent control area under section 9(1). The usage of “all or any part” is significant – this would allow the whole of a local authority to be so designated, although one imagines it would only be the four city-specific local authorities (Aberdeen, Dundee, Edinburgh and Glasgow) who could make a sensible case for such an all-encompassing RCA (if appropriate circumstances applied). Further sections of the Bill: allow for interim assessments by a local authority if circumstances have changed markedly after the submission of a report but suitably before the next one is due; presage the provision of guidance to local authorities about what a report is to contain; and set out what Scottish Ministers must do with a report, including the potential to send a report back to a local authority if it is insufficient somehow and, after consideration of an appropriate report, respond with their own report about whether they propose to lay draft regulations designating all or part of the area of the local authority as a RCA.

Attention then turns to section 9, which provides that such designation should only happen if Ministers are satisfied that restricting the rate of increase in rent payable under private residential tenancies – yes, only private residential tenancies – in the area to be designated is necessary and proportionate for the purpose of protecting the social and economic interests of tenants there and (from the other perspective) is a necessary and proportionate control of landlords’ use of their property there. The language here is redolent of Article 1 of the First Protocol to the European Convention on Human Rights and the (qualified) protection of the peaceful enjoyment of possessions. For reasons of space, I will not delve into this issue too much; instead I will simply acknowledge the ECHR point and continue to explain the mechanics of the scheme.

Any regulations for a RCA must also be preceded by a consultation, involving the relevant local authority and also “persons who appear to Scottish Minsters to represent the interests of tenants and landlords under relevant tenancies of properties in the proposed rent control area”. This consultation, which must run for at least eight weeks, is to relate to the geographical scope of the RCA and both the form and the level of the rent increase restriction being considered for the proposed RCA (see below). There is then to be a further report to the Scottish Parliament, setting out Ministers’ reasoning and describing the consultation.

The potential effect of a RCA

Any regulations designating an area as a rent control area will last for five years (unless they are somehow revoked prior to their natural expiry), and “must provide that the rent payable under a private residential tenancy of a property in the area that is not an exempt property may not be increased by more than an amount specified in the regulations”. I’ll come back to exempt properties below. In terms of the restrictive amount that is to be specified in such regulations this “may include”:

• a specified percentage (which may be 0%) (i.e. no increase permitted at all);
• an amount falling within a specified range, or
• an amount calculated with reference to one or more specified factors, or other specified criteria (including a formula).

Presumably the amount specified may also include something completely different, provided that is somehow sensible (lest the regulations be subject to judicial review). What is particularly noteworthy though is the express direction in section 9(3)(a) allowing the permitted increase to be 0%; without meaning to patronise anyone, that will indeed mean a rent freeze, as 0% of any existing rent will be zero.

When might we get our first RCA, and what happens in the interim?

Just to give an indication of the timeline for any new RCA, given that any new rent control areas will…

…need the new Bill to pass and be implemented, and…

…that proposed RCA be the subject of an assessment and report by the relevant local authority, which…

…must have considered any guidance issued by Scottish Ministers, and…

…that report be considered by Scottish Ministers, then…

…regulations must be drafted for that RCA, and then…

…those regulations consulted on and in turn reported on, before finally…

…those regulations get passed by the Scottish Parliament (under the affirmative procedure)…

…it is fair to say it will still be a wee while before we get our first actual RCA.

I also think this means it is pretty much a racing certainty that the Cost of Living Act provisions on rent adjudication will have expired before this can all be put in place for any new RCA. (Please drop me a line if you think I am wrong here – I would be happy to be corrected.) That is to say, there will be a period between 31 March 2025 and the implementation of the first RCA whereby any validly served rent increase-notice will only be contestable in line with the 2016 Act regime as enacted. That challenge regime is based on the market, without any caps (unless the landlord themselves narrates a lower than market new rent in the rent-increase notice, as discussed below). Judging by some of the coverage of the new Bill, it seems that non-market interventionists are worried about the dawn of proper rent controls, but there will nevertheless be a chance for existing private landlords to “correct” that market by serving valid rent-increase notices with high-end of the market rate increases before regulation fully bites.

Exempt properties and modified application

There are some important provisions about the properties that are exempt from restrictions or subject to modified restrictions. Section 13 allows Scottish Ministers to define (by regulations) what is an exempt property (i.e. one that will not be affected by an RCA being designated for its neighbourhood). This can be by reference to whatever Scottish Ministers consider appropriate, but with particular reference to: “(a) a description of the circumstances relating to the landlord of the property, (b) a description of the circumstances relating to the tenant of the property, [and] (c) a description of the property according to its type.”

To try to dream up examples, my reading of this is it could allow certain landlords to be carved out of the regime: perhaps actual human beings who only own one property (or at least they only own one property they don’t live in). For a tenant-related circumstance, one immediately thinks about students in full-time education who are not renting directly from their education provider or a purpose-built student accommodation provider (and I stress I am not just saying this because I work in higher education – Gordon Maloney also flagged concerns about this in his Twitter thread). As for descriptions according to property type, this might carve out property above a certain square footage/metreage, or below a certain age.

I’m mainly going to refrain from commenting on the merits of all of this, save to say I am somewhat drawn to the idea of exempting particularly young properties from rent control (or at least leaving the broad parameters of such properties to the planning process rather than rent controls). I say this as one regular critique of rent control is that it might stifle development, or more specifically build-to-rent development, but if you can allow new construction to at least not be disincentivised for any given tenure then housing supply can increase in a suitably balanced way (with presumably a beneficial impact for any locale with such an acute issue that a RCA was deemed necessary, albeit I appreciate this is not an easy topic for a semi-informed amateur like me to veer into).

Anyway, before laying any draft regulations about any exemptions, Scottish Ministers must consult persons who appear to them to represent the interests of tenants and landlords, plus any other person they consider appropriate. One imagines organisations like the National Union of Students will be poised to get involved if their sector is to be affected (as discussed in Maloney’s thread).

Section 14 does something slightly different, by allowing Scottish Ministers (again by regulation) to make provision that would allow landlords of “a specified property” to raise rent in a RCA by more than they would otherwise be able to, either with approval from a suitable vetting body (a rent officer or the First-tier Tribunal are suggested in the Bill) or without the need for any approval, i.e. a (pre-programmed?) top-up increase would be permitted automatically. What could be meant by “a specified property” here tracks what might be an exempted property in terms of section 13 (i.e. defined by reference to landlord or tenant circumstances, or the property type).

Ongoing matters for RCAs

The RCA provisions set out the Scottish Ministers’ duty to keep any activated RCAs under review and react promptly to vary or revoke the terms of a RCA when they are of the view that rent controls are no longer necessary or proportionate (section 11). Where a variation rather than an outright revocation is proposed, this is to be consulted on (with similar parameters to the consultation that would have originated the RCA) (section 12).

Section 18 allows Scottish Ministers to act on or in anticipation of the expiry of any RCA, to cater for any increases that any (self-interested, capitalist) landlord will (entirely rationally) be keen to make. Such regulations can last for up to a year after the expiry of the RCA, and can relate to the method by which a landlord may increase the rent payable and any review or appeal(s) pertaining to such an increase.

The other relevant RCA provisions that are in included in the Bill (at sections 15-17) relate to “Power to seek information from landlords and tenants”. This allows a local authority to quiz any registered landlord in relation to any house that they have logged on the landlord register about matters such as the rent payable under any tenancy, the date and amount of the previous rent increase (if any), and details about the let property (such as the number of bedrooms, the floor area, and whether it is detached, semi-detached, terraced or flatted). A local authority may also request such information from a person with a right to live in any registered house by virtue of a lease.

A landlord’s failure to provide relevant information after a request, or the provision of false information, can ultimately lead to a fine of £1,000.

The tenant escapes any penalty regime here: I am content with the idea of not penalising tenants for not responding to requests, but it might stick in the craw a bit if they get to provide false information without penalty (albeit in some circumstances a tenant’s dishonest statement could theoretically amount to a common law fraud).

The mechanics of rent increases in the new landscape

That’s us just about covered Chapter 1 of Part 1 of the Bill. There are two further (much shorter) Chapters of Part 1 to consider. Chapter 2 contains two sections (19 and 20) which amend the provisions of the 2016 Act so as to enable RCAs to operate. Chapter 3 contains rent-related amendments to the 2016 Act that are independent of the RCA provisions. For better or for worse, this means the RCA creation provisions will be in the new Bill when it is passed, but the mechanics of how a RCA operates for any given private residential tenancy are amended into the 2016 Act.

It is worth mentioning one reform that applies across all PRTs, whether in a RCA or otherwise. The structure of the amending provisions means that there is some duplication, but there is a mirror effect and I’ll flag it at the outset of this coverage for ease.

The standard rule for PRTs is that there can only be one increase per year. A quirk in the 2016 Act as introduced meant this annual rent increase could be instigated at any time after the commencement of the tenancy. This was because the statute was silent as to when a rent-increase notice could be served on a new tenant. With each new tenancy being looked at in isolation, any new tenant receiving a rent-increase notice in the first twelve months could not say the service of such a notice was contrary to statute. Theoretically, at least, a rent-increase notice (with the statutory minimum notice period of three months) could be served very quickly indeed on a new tenant, and that tenant would then face the prospect of accepting or challenging a rent-increase notice. New provisions remove this quirk for tenancies in all circumstances (in terms of new section 43G and an amended section 19 of the 2016 Act).

There are also similar but separate provisions to provide that any figure proposed by a landlord in a rent-increase notice is to serve as a high watermark. This would be relevant where: (a) there is a RCA but the landlord has undershot (that is to say, they have not accounted for every permissible penny of rent in their rent-increase notice); and (b) where there is no RCA and the landlord has made a below market suggestion for the new rent. I’ll return to these in their individual contexts below.

The new RCA-specific provisions

Section 19 of the Bill inserts a new Part 4A into the into the 2016 Act. This section is headed “Setting and variation of rent”, and the combined effect of new sections 43A-43T does indeed deal with two rent control area scenarios, namely (a) the permissible initial rent for a new PRT in a RCA, and (b) rent-increases for PRTs that are ticking along there. The heading of the new Part 4A is worth mentioning to explain it is indeed focussed on RCAs: “RENT: PROPERTIES IN A RENT CONTROL AREA (OTHER THAN EXCLUDED PROPERTIES).

In basic terms, the first half of this regime removes the significance of a break in the tenancy (i.e. the existing tenant(s) moving out and the new tenant(s) moving in). It does this by contemplating two situations where a property has been previously let (see new section 43E).

First, if there has been a rent increase in the 12 months immediately before the start of the current tenancy, the initial rent under cannot be more than the rent that was payable when the immediately preceding tenancy came to an end. Where there was no such increase, the new rent can be more than the final rent under the immediately preceding tenancy, but only where that higher amount could have been reached by a valid increase in the given RCA taking that outgoing rent as the baseline. Absent these changes, a new let could have been priced by virtue of what the market would allow.

There is provision made for a property to be excluded from this regime (because of a change of ownership and this new let being the first involving a new owner – again, this might assuage any fears of investors being spooked). The wording also clarifies various other matters (e.g. the previous let must have been in the past twelve months, and both the new and the previous let must relate to the same or substantially the same property). Also, any home that is an exempt property in terms of the aforementioned section 13 of the new Bill will indeed be exempted from this regime.

As for rent matters after the initial rent-setting, this all starts at new section 43F of the 2016 Act (which makes the new regime the only way to validly increase rent in a RCA, and signposts to Chapter 2 of the new Part 4A of the 2016 Act). Section 43G then reiterates the standard rule that there can only be one increase per year, but also brings in a couple of innovations to prevent any increase either in (a) the first twelve months of a new tenancy or (b) within twelve months of any preceding tenancy, where such a previous tenancy is (again) essentially chained to the new let, at least as far as the rent level goes. As noted, the innovation about the first twelve months of tenancy is to address the quirk in the 2016 Act as introduced (where one increase per twelve-month period was permitted, but the new lease itself didn’t start that clock running; only the first increase did).

Rent increase in a RCA

The new Section 43J is the first provision of Chapter 2 of Part 4A of the 2016 Act, and this Chapter 2 is the only show in town for rent increases in a RCA. It starts by explaining the landlord under a current tenancy – i.e. a non-exempt tenancy that is ticking over – may increase the rent payable by giving the tenant a valid rent-increase notice, but instantly caveats that by saying the landlord may not increase the rent by more than the permitted amount for the area in which the let property is situated. “Permitted amount” is defined by reference to the relevant regulations as the maximum amount for any increase in the rent payable under a current tenancy in that area. The notice period for an increase is the usual three months, and there is a referral/application regime where the tenant thinks the rent-increase notice strays above that which is permissible.

If there is to be a referral by a disgruntled tenant, this first stage of the challenge process goes to a rent officer. What happens next depends on the rent increase the landlord has aimed for.

Should the rent officer feel that the landlord has aimed too high, then they must come back down to a suitable level for that RCA. Where the RCA has a zero (or equivalent) permitted increase, they must order the rent-increase notice has no effect. In other circumstances, the rent determined by the rent officer must reflect an increase by the relevant permitted amount (i.e. the maximum level).

Where the landlord has aimed lower than permitted, then that lower stipulated amount is all that can be charged (i.e. the landlord doesn’t get to top things up to the maximum level at this stage). I’ll explain this a bit more below in the context of the capping of rent-increase notices in a non-RCA setting.

The rest of the new Part 4A deals with a variety of other technical/procedural matters that I will simply body-swerve here. The only other thing I will mention is the innovative new duty to include information about rent in “to let” advertisements in a rent control area, which is introduced by section 20 of the Bill (and in turn a new section 17A of the 2016 Act). This brings in further considerations for RCA properties at the time of a new let.

One blanket stipulation for the prospective landlord’s adverts is they must highlight there is indeed a RCA present, so there can be no hiding from that. The next duty depends on whether the property was let in the previous twelve months (subject to an exception where the prospective landlord bought the property with vacant possession and this is their first let of the property). The prospective landlord will then either need to set out details of the rent level of any previous tenancy of the let property by the current owner (and the date of the previous increase) or, where there was no such previous let, set out the prospective new rent. I don’t believe there is a specific sanction provided for not complying with this duty.

Rent increase in normal (non-RCA) circumstances

A couple of quick thoughts for non-RCA properties before I draw this first post to a close. As noted, it is now impossible to raise the rent in the first twelve months of a PRT. Another change is to provide that the figure proposed by a landlord in a rent-increase notice is to serve as a high watermark. Previously, if a tenant challenged a rent-increase notice and the relevant rent-setting official felt that the landlord had lowballed their new rent proposal, they could set an even higher rent than that proposed figure (based on the market). Not anymore. Whether this means landlords start to highball new rent proposals is something that I hope more qualified people than me have thought about, but at the very least this proposal means a tenant can challenge a rent-increase notice and not fear a curveball. Sorry about all the ball chat.

Observations on the Bill’s rent provisions

There is no denying that some of these changes are a bit tricky to get your head around. That being said, there are aspects of them that appear quite neat to me. Tying prices to historic rents in many circumstances avoids the issues around fair rents and comparable properties, which we have seen with previous British rent controls.

Mind you, this scheme replicates aspects of another more recent and ill-fated example, namely RPZs. The fact that local authorities are obliged to consider what is happening with private rentals in their area will perhaps mobilise them towards acting a bit more than the original RPZ provisions did, and there are other differences between the frameworks that I probably should sit down and fully make sense of on another occasion that could avert the issues that led to RPZs never working at all. There is a slight possibility that certain issues could be replicated, so we’ll need to watch this space.

I’ll also venture one overall comment about these rent proposals and the effect they might have. Some of the reactions to rent controls have been a tad hyperbolic. This could be part of the cut and thrust of the broad law-making process, where those who wish less regulation seek to get the Bill into a shape that they are happy with. That’s fine and understandable if so. But to lay all of the concerns of the industry at rent controls’ door is, I think, to overplay what these provisions can do in the long-term, and certainly to overplay what they can do in the short-term.

I also think we need to be clear that it is not (just) the Big Bad Bute House Boys* that are causing strain for buy-to-let landlords. It wasn’t the Scottish Government who stopped mortgage interest from being a deductible expense from a landlord’s tax return, thus increasing the tax burden for landlords with secured debt. (That was George Osborne.) It wasn’t the Scottish Government that caused recent volatility in the mortgage markets, with interest rates spiking for buy-to-let landlords on either a variable-rate mortgage product or a maturing fixed-rate mortgage product. It wasn’t the Scottish Government that reworked lettings relief after 2020 in a way that serves up a capital gains tax hit on most landlords seeking to extricate themselves from the market.

But… It was the Scottish Government that tweaked the repairing standard as of March this year (meaning landlords to think about lead pipes serving let properties and, for those with properties making use of a shared access, ensure there are suitably secure but internally released doors in common areas). This is not to say such changes are without a sensible basis (in terms of occupier safety), it’s just it could be an extra straw on a landlord’s back, and it is never clear which straw might cause the eventual breakage. It was also the Scottish Government that (in 2017) changed the rules around “no fault” evictions (which England is still wrestling with in relation to its Renters Reform Bill). Given that “no fault” change offered some sure-footedness in their home to private renters complying with the terms of their lease, this is not exactly something I am minded to criticise, but there is no denying that wider changes like that are all relevant to the landlord/tenant balancing act. There is also no denying this is a difficult balance to strike. We’ve only been trying to do it for over a hundred years (some of which is touched on in a recent paper by Peter Robson and me (available on Westlaw with a subscription – open access available later this year when the embargo is lifted)).

Also, the Scottish Government’s record on house-building – like the record of other governments in the UK – can rightly be commented on. As I say though, these rent provisions need not strangle new build-to-rent developments at birth, so let’s at least acknowledge that. I’ll also leave any full critique of house building levels for someone else to cover another day.

That concludes the substance this first Housing Bill blog post. I alluded to evictions two paragraphs ago. That’s the topic I’ll return to in the next post, to consider what Part 2 of the new Bill says around a new duty for a court or tribunal to delay an eviction, and the not quite new provisions around damages for unlawful evictions.

*A footnote about my asterisk above

I went with “Big Bad Bute House Boys” for semi-alliteration. I appreciate it was actually Shirley-Anne Somerville who introduced the new Bill, supported by Patrick Harvie and Paul McLennan.

A drafting aside (and a correction by me)

In the first version of this blog post I included a comment on one of the minor and consequential amendments from the Schedule to this Bill. Paragraph 6 inserts a new section 17B into the 2016 Act and I had initially thought that within that inserted section there was a repeal of another bit of the 2016 Act. This seemed a bit weird, and it would indeed have been weird if this is what was happening (as you would not normally leave evidence of a repeal in the modified living instrument). I now realise I misread the extent of the new section 17B (I’ll blame the formatting of the PDF of the Bill) so that critique, such as it was, flies away (because the repealing provision is indeed squarely within the new Bill); there may be a separate critique of the presentation of this, albeit that critique is a much milder one (and the main critique is probably of me for missing a closing quotation mark to reflect where the new section 17B ended). I updated this blog post to reflect all of this on the day of publication.

Land Reform (Scotland) Bill [number 3] introduced to Holyrood

Let’s go ’round again,

Maybe we’ll turn back the hands of time,

Let’s go ’round again,

One more time.

Average White Band

Were AWB thinking about land reform in Scotland when they dropped that banger? Almost certainly not. Anyway, here I am in 2024 clawing for an original intro to a land reform post, and here we go ’round again, with a further land reform revolution. Maybe we’ll turn back the hands of time.

The much anticipated Land Reform (Scotland) Bill was introduced to the Scottish Parliament on 13 March 2024. The following day, official announcements and reaction started to follow.

On X-formerly-known-as-Twitter, Mairi Gougeon (via the ScotGovRural account) posted a short video explaining she was “really excited” to introduce what she thought would be “a really transformative piece of legislation”. That tweet also provided a link to the Scottish Government news release (and there was a similar LinkedIn post).

I understand all of the 537 respondents to the preceding consultation received an email from Mairi Gougeon expressing gratitude for our submissions; I certainly received an email anyway. For anyone seeking a reminder about that consultation process, I blogged about it prior to submitting my response. You can find the 482 public responses to the consultation on the Scottish Government’s consultation hub, and analysis of some consultation responses in Scottish Parliament Information Centre post from December 2023. That email to consultees, like the news release, explains what the Bill does in the Government’s own (abridged) words.

The four noteworthy paragraphs of the news release are as follows:

The Land Reform (Scotland) Bill… includes measures that will apply to large landholdings of over 1,000 hectares, prohibiting sales in certain cases until Ministers can consider the impact on the local community. This could lead to some landholdings being lotted into smaller parts if that may help local communities.

It will also help to empower communities with more opportunities to own land through introducing advance notice of certain sales from large landholdings. Large landholdings of over 1,000 hectares represent more than 50% of Scotland’s land.

The Bill will also places legal responsibilities on the owners of the very largest landholdings to show how they use their land and how that use contributes to key public policy priorities, such as addressing climate change and protecting and restoring nature. These owners will also have to engage with local communities about how they use the land.

The Bill includes a duty on Scottish Ministers to publish a model Land Management Tenancy which will support people to use and manage land in a way that meets their, and the nation’s, needs. It also includes a number of measures to reform tenant farming and small landholding legislation, providing more opportunities to improve land, to become more sustainable and productive and to ensure that tenants are fairly rewarded for their investment of time and resources in compensation at end of tenancy.

This blog post will offer some initial thoughts on this newest (and third) Land Reform (Scotland) Bill. Before it does that, here are some collected resources (in no particular order, with a mixture of non-partisan and not non-partisan viewpoints):

• A post by the Scottish Parliament Information Centre (aka a SPICe Spotlight) about the proposals for large landholdings;
• An article by Severin Carrell for The Guardian, entitled, “Scottish lairds may be forced to break up estates during land sales“;
• An article by Simeon Kerr in the FT, entitled, “Scottish government introduces land reform bill to boost community ownership“;
• A BBC Naidheachdan report by Calum MacLeòid, featuring interviews with another Calum MacLeòid and someone else who was disappointingly not called Calum MacLeòid (namely Josh Doble from Community Land Scotland) (report and one interview in Gaelic, second interview and captions in English) (a related BBC write-up of this is also available, again in Gaelic). Incidentally, and indeed curiously, there seems to be no English language coverage in the BBC News content for Scotland. There was however a feature on BBC Radio 4’s Farming Today, in the form of an interview with Sarah-Jane Laing (available until 16 April 2024) (more from Sarah-Jane below).
• A column by Calum MacLeod (in English) for the West Highland Free Press, entitled “We are still searching for radical land reform”, an image of which is available on Calum’s Twitter (X).
• A “Thunderer” column in The Times, entitled, “Land reform bill is yet another assault on property rights” (£);
• An article in the Telegraph, entitled, “Humza Yousaf plots crackdown on landed gentry” (£);
• An article in The National, entitled “Scottish Land Reform Bill introduced to Holyrood“, followed four days later by a letter in The National by a correspondent who was not overly enamoured with the Bill;
• An article in Farmers Weekly, entitled, “Outrage as Scots government plans to break up larger holdings“;
• A Bella Caledonia article by Craig Dalzell, entitled, Land Reform Or Another Power Grab?;
• An article by Brian Wilson in the Stornoway Gazette (on 21 March 2024), entitled “Bill gets a muted response”;
• The Scottish Land Commission – the quango established by the most recent Land Reform (Scotland) Act (passed in 2016) – issued a news release to welcome the “meaningful” Land Reform Bill. They have also taken the opportunity to highlight the research and analysis published by Commission in a standalone page on its website.
• A targeted article in the P&J (on the agricultural tenancies provisions (see below)), entitled, “Tenant farmers to benefit from Land Reform Bill“;
• The Scottish Greens have published, in their words, “Everything you need to know about Scotland’s new Land Reform Bill” on their website. The other political party steering this legislation through Holyrood – the SNP – does not have a similar resource on its website as far as I can tell.
• An article by Mairi Gougeon for the Scottish Farmer, entitled “Mairi Gougeon sets out the need for land reform in Scotland“;
• Scottish Land and Estates’ full statement on the Bill is on its website, under the heading “New Land Reform Bill Is ‘Destructive’ Attack On Land Businesses” (£). (They are also feature in various of the articles listed above.) Sarah-Jane Laing, SLE’s Chief Exec, contributed an article to the Daily Mail (headed, “Dangers of this slice and dice attack on private property“), and another SLE Stephen Young bemoaned on Twitter (it’s still Twitter…, okay X) that the Bill was a missed opportunity, would increase bureaucracy, and waste taxpayers’ money.
• Community Land Scotland published a thread (also on Xwitter) where they welcomed the Bill but noted aspects of the Bill need strengthening and bemoaned the exclusion of urban Scotland and community rights to buy from the Bill.

*There may be others (and I know Andy Wightman’s coverage is to come, as at the date of this blog post’s publication on 26 March 2024). I can update this list with any useful coverage from the immediate aftermath, so let me know if I’ve missed anything and I can add it to the list.*

• Edit 28 March 2024 Andy Wightman’s first post on the new Bill can be found on his blog.

Regarding existing community rights to buy and their general non-appearance in the Bill (save in relation to their interaction with the new Bill’s new features), this can be explained by virtue of a separate review of the various Scottish community rights to buy that was recently announced (on 6 March 2024). No view is offered here on whether this exclusion is the correct approach for this Bill, although for ease (and without meaning to imply a view) this blog post will also exclude existing community rights to buy from its coverage, save where such existing rights inform the new Bill’s provisions. There is quite enough to contend with without that.

Before proceeding, I should also mention the accompanying documents that are served up with the Bill. The accompaniments are:

• Explanatory Notes
• Policy Memorandum
• Financial Memorandum

There is also a Business and Regulatory Impact Assessment to estimate the costs, benefits and risks of the measures in the Bill and, on a more targeted basis, a Strategic Environmental Assessment of Agricultural Tenancies, Small Landholdings and Land Management Tenancy Proposals: Consultation Report. Lastly, the suite is completed with a Delegated Powers Memorandum (which highlights the powers that will flow to the Scottish Ministers) and Statements on Legislative Competence (explaining that both the Presiding Officer and the Scottish Government feel the Bill is within devolved competence).

I won’t rehash all of these documents, although I will highlight certain points of interest from these accompaniments as appropriate. The first thing in that vein is that the Policy Memorandum puts forward the position that all the measures in the Bill comply with Article 1 of the First Protocol to the ECHR (which offers a qualified but important protection to the peaceful enjoyment of possessions) and indeed Article 6 of the ECHR (the right to a fair hearing). You can read about that in paragraphs 286-293. The Presiding Officer and Scottish Government agree.

As readers of this blog will know, in a recent case Scottish Land and Estates (and two other parties) challenged a piece of legislation on various grounds (including with reference to A1P1). Given the expressed views of SLE linked to above and their recent excursion to the Court of Session, this assessment of the human rights compliance of the new Bill might feasibly be put to the test.

Okay, now it’s time to get to my thoughts on the incipient legislation.

DISCLAIMER: This blog post is over 10,000 words long. It is unashamedly one for the purists, albeit I have (honestly) tried to keep things as accessible as I can. As with previous posts on my blog, this post is something of an attempt by me to get my own thoughts straight, and it may form the basis of a future piece of writing and/or be a launchpad for evidence to the relevant committee at Holyrood. Speaking of which, I understand the relevant committee is to be the Net Zero, Energy & Transport Committee. Admittedly, the precursor consultation to this Bill had “Net Zero” in its title, but having read through the new Bill it doesn’t really feel very Net Zero to me, or indeed very Energy or Transport.

SECOND DISCLAIMER: Yes, this is all quite political, and some of you might even be reading this blog post in the hope I nail my colours to a particular mast. For the most part, I have tried not to do that (some people may not believe me, or think I have not done this particularly well – so be it). What I have tried to do is set out what the Bill appears to do, and offered some thoughts here and there.

Now it really is time to get to the new Bill.

The Bill – a structural overview

The Bill is in two substantive Parts. The first is called “Large land holdings: management and transfer of ownership”, and it seems fair to say Part 1 has attracted most of the attention so far. Part 2 is called “Leasing land”. Unsurprisingly, this second Part contains provisions around certain landlord and tenant relationships. There is also a Part 3 with “Final provisions”, allowing for relevant regulations to be made, dealing with commencement matters, and conferring the Bill its short title (which includes the year “2025” – so let’s not expect the Bill to be passed in the next nine months). Finally, there is a Schedule which hooks into Part 2’s “Leasing land” provisions. I’ll return briefly to Part 2 at the end of this post.

Part 1 – Large land holdings: management and transfer of ownership

We already have coverage of this Part of the new Bill in the excellent analysis in the abovementioned SPICe post. I’ll try to make my coverage suitably different to that so that this post can be read as something of a partner piece. There are also some aspects that need to be detailed here to set the scene, and to allow this post to stand on its own two feet.

Part 1 of the Bill brings in something innovative for modern Scottish land reform, in that individual proprietors can be subjected to different regimes based on the amount of land that they own. The nearest thing we have had to such differential treatment for owners based on a broad categorisation was in relation to the community right to buy as originally enacted. Part 2 of the 2003 Act was restricted to rural areas only, defined with reference to the local population (the relevant threshold being 10,000 in a settlement). That restriction was swept away by the Community Empowerment (Scotland) Act 2015, and in any event related to the happenstance of how many folk lived in an area. Be that as it may, since that reform all owners, big and small, urban or rural, were treated in similar terms in that they could all be in the crosshairs of a right to buy application. Now, we are moving towards actively targeting any owner who has a certain amount of land. As we shall see, there are separate trigger points for the different innovations that are being introduced.

The “Large land holdings: management and transfer of ownership” content in Part 1 is subdivided into four aspects. The first relates to an obligation on owners of large land holdings to engage with the community, by way of a suitable land management plan. The second relates to giving certain community groups a chance to intervene when a large land holding is to be transferred. The third relates to “lotting” of large landholdings, which will delay the transfer of certain large land holdings until Scottish Ministers have decided whether the land should be transferrable only in parcels as specified by Ministers and in turn prevents any transfer not in accordance with that decision. The fourth relates to a new Land and Communities Commissioner, being a new Commissioner for the Scottish Land Commission.

Community-engagement obligations in relation to large land holding

Section 1 is headed “Community-engagement obligations in relation to large land holding”. This section shunts thirteen new sections into Part 4 of the Land Reform (Scotland) Act 2016. Part 4 of this preceding Land Reform Act has, until now, only contained a single section, encouraging owners of land to engage communities in decisions relating to land when such decisions may affect. Part 4 will now be divided into two Chapters: the first now has a new title – “Community-Engagement Guidance” – and the second will be headed “Community-Engagement Obligations in Relation to Large Land Holdings“. Why the final word in this Chapter heading is pluralised while the final word in the heading of the section in the Bill is not is not clear.

Anyway, turning to more important matters, the new section 44A of the Land Reform (Scotland) Act 2016 empowers the Scottish Ministers to pass regulations that impose obligations on the owner of land for the purpose of promoting community engagement in relation to the land. It is ordained that such regulations must be in accordance with new sections 44B and 44C (more on those below), and secondly that those obligations can only apply to land that is caught within the definition in a new section 44D. (I’ll not labour the “new” section terminology from here on in, but will include it from time-to-time for clarity.) Next, any regulations are to be informed by the land rights and responsibilities statement.

It will be recalled that the LRRS was introduced by the 2016 Act. It will also be recalled that there was much chatter about the LRRS being beefed up in the consultation that preceded this Bill. It is accordingly slightly surprising that this is the only mention of the LRRS in the new Bill.

Finally, section 44A provides that the Scottish Ministers must consult the new-fangled Land and Communities Commissioner before passing any regulations. More on the new Land and Communities Commissioner below too, but the significance of this office for section 44A is that it will need to be created and then filled (at least on an acting basis) before any regulations can be passed, meaning it will be a little while before any of this can bite.

Section 44D sets out the “Land in relation to which obligations may be imposed”. In a broad sense, land can be lassoed in one of two ways, namely by (a) exceeding 3,000 hectares in area, or (b) forming part of an inhabited island in some circumstances. The criteria by which land forming part of an inhabited island will be caught are where the land (i) exceeds 1,000 hectares in area, and (ii) comprises more than 25% of the land forming the island (that term being construed in line with the Islands (Scotland) Act 2018). That is to say, where you have a holding that makes up a quarter of an inhabited island, it need only be 1,000 as opposed to 3,000 hectares.

In the preceding consultation there was discussion about data zones and local authority wards (where they were classified as an Accessible Rural Area or Remote Rural Area) being alternative ways of determining if land was caught. For better or worse, there is no mention of these in the Bill.

The footprint of a mainland or island holding is not the end of a story though. Such land can be a “single holding” or a “composite holding”.

A single holding is defined as the whole of a contiguous area of land in the ownership of one person or set of persons. By contiguous area of land, it is meant that all the land is connected, and you can go from one point on that holding to another point there without crossing another person’s land; that is to say, the land is somehow touching. The other point from this definition is there can be single (exclusive) ownership or co-ownership (shared with other people) of a single holding. Where such a single holding clears the 3,000ha (or 1,000ha for suitable islands) threshold, the land holding is caught.

The Bill goes on to say that one single holding (“holding A”) joins up with another (“holding B”) as a composite holding if certain conditions are met, and that a composite holding may consist of any number of single holdings.

The conditions start with a requirement that a boundary of holding A touches a boundary of holding B. There is then a further requirement of some kind of connection between the owners of each holding. This will be so when the owner of holding A is either:

(i) also the owner of another single holding that forms part of a composite holding of which holding B forms part, or

(ii) connected to the owner of another single holding that forms part of a composite holding of which holding B forms part.

I’ve quoted that verbatim. I confess, I found it quite tricky to render it in any other way. There’s more to consider though, in terms of what is meant by connection. This is defined such that one person is connected to another person if: they are both companies in the same group in terms of tax treatment (under the Taxation of Chargeable Gains Act 1992); one has a controlling interest in the other (in terms of regulations made under section 39 of the Land Reform (Scotland) Act 2016); or a person holds a controlling interest in them both.

If you’re finding this a little confusing, I think that’s understandable. It took me blogging to get my head around it all. One further clarification of what is meant might come from the Explanatory Notes, as follows:

For example, if A Ltd and B Ltd are part of the same company group and A Ltd owns 2,000 hectares adjoining B Ltd’s 2,000 hectares, the combined single holdings of A Ltd and B Ltd would be treated as forming a 4,000 hectare composite holding. [Community-engagement provisions] would apply to the land comprising that composite holding, and therefore regulations could… [impose] obligations on both A Ltd and B Ltd in relation to that land.

Paragraph 18

To expand on this example, if A Ltd owns 2,000 hectares adjoining B Ltd’s 2,000 hectares to the west and also owns 500 hectares adjoining B Ltd’s 2,000 hectares to the east, all 4,500 hectares would be caught.

To offer a further elaboration, if A Ltd, B Ltd and C Ltd are all part of the same group, and A Ltd owns 2,000 hectares adjoining B Ltd’s 2,000 hectares to the west, and then C Ltd owns 500 hectares adjoining B Ltd’s 2,000 hectares to the east, again all 4,500 hectares would be caught.

One final point about the land which can be caught by land management planning. Section 44M allows Scottish Ministers to modify the land in relation to which obligations may be imposed. Regulations are actually to be made under section 44A, but this change would presumably be effected by amending section 44D (a point borne out by the explanatory notes at paragraph 20). There may be a drafting reason for referring to section 44A rather than 44D but my inclination is that the provision that is being changed should be referred to (either in addition to or in substitution for the other provision). To refer to section 44D directly would also seem to align with the approach in new section 46L (in relation to the large land holdings that can be subject to an extended opportunity to register a community interest in land – more on that below). This is to say nothing about whether this scope should be amendable by regulation; that’s an argument for others to run.

Okay, so your land holding is snared by this regime. What next? Regulations, that’s what; this goes beyond the warm and fuzzy guidance to land owners that was initially provided for by the previous Land Reform Act (albeit that guidance stands, for land holdings of all shapes and sizes). When the regulations come to be made, they must require certain things of affected owners, as set out in two sections.

In terms of the new section 44B, those regulations are to include provision that the owners must ensure: (a) there is a publicly available land management plan in relation to their land, (b) there is engagement with communities on the development of, and significant changes to, the plan, and (c) the plan is reviewed and, where appropriate revised, before the end of each period of 5 years beginning with the day on which the latest version of it was made publicly available. The italicisation in point (b) above is mine, and no doubt stakeholders will be keen to ascertain exactly what all these terms mean. Section 44B goes on to say that any obligation that is brought in need not be a blanket obligation for all section 44D land, and further describes what information a land management plan is to contain. Some of these are general, such as the owner’s long-term vision and objectives for managing the land (including its potential sale), and how the owner is managing or intends to manage the land in a way that contributes towards adapting to climate change and increasing or sustaining biodiversity. Others specifically hook into existing legislation and related guidance, such as the Scottish Outdoor Access Code and the code of practice on deer management flowing from the Land Reform (Scotland) Act 2003 and the Deer (Scotland) Act 1996 respectively, and the net-zero emissions target set by the Climate Change (Scotland) Act 2009.

One other feature that must be in the regulations is stipulated in section 44C: the owner of any affected land will be obliged to consider any reasonable request from a community body to lease the land (in whole or in part). The regulations may sculpt the land that is to be subjected to this obligation to consider, but nevertheless this will be an interesting development, and could put community bodies dealing with large landowners on a similar footing to community bodies seeking a community asset transfer from a public bodies (in terms of the Community Empowerment (Scotland) Act 2015). Incidentally, community bodies here is already defined, with reference to the first Land Reform (Scotland) Act (meaning this obligation to consider will only relate to requests received from suitably incorporated and endorsed community bodies).

Obligations only matter when they can be effectively enforced, so that is the next thing to consider. A breach of any obligations falls within the remit of the newfangled Land and Communities Commissioner. The LCC may investigate alleged breaches and, if a breach is identified, a sanction can follow. There are some catches though. First, the LCC cannot take the initiative here: it cannot act of its own motion. Second, only certain persons can report an alleged breach of any obligations. Three statutory “quango” organisations are worth mentioning first, as they have a Scotland-wide role and as such can clype about any apparent breaches. These are Historic Environment Scotland, the Scottish Environment Protection Agency, and Scottish Natural Heritage (aka NatureScot, which has been referred to by its (still correct) legal name). Next, a local authority can be a clype, but only if the land to which the report of the alleged breach relates falls (wholly or partly) within its area. Finally, a community body in terms of Part 2 of the Land Reform (Scotland) Act 2003 that has registered a community interest in the land to which the report of the alleged breach relates (or is eligible to do so) can be a grass. All of this is to say that punters cannot directly go to the LCC: either they have to convince someone at their council or a suitable quango to do it for them, or they will have to have jumped through at least some of the community right to buy hoops.

The logic behind this might be related to managing the new Commissioner’s in-tray, or ensuring there is not an immediate glut of spurious complaints, or indirectly creating a quality filter by only allowing organisations with a certain capacity to clype. No doubt this will be a point of discussion as the Bill goes through Parliament. For now though, it can also be noted that new section 44M allows this list of clypes to be amended by regulation; this could either restrict or expand the list, but it would nevertheless remain a closed list.

[Section 44M appears to have a slight error in formatting, where a rogue subsection (5) appears, plus there is no direct mention of the Land Reform (Scotland) Act 2016 that I assume is the target of the amendment to allow regulations under the new provisions to be made under the affirmative procedure. Hopefully this will be picked up.]

Assuming that the Land and Communities Commissioner receives a valid report (containing details of the alleged breach and signposting the provision of the regulations imposing the obligation that is alleged to have been breached), the LCC may investigate. The LCC must be satisfied sufficient information has been included to proceed to an investigation and also that there has not been a substantially similar report by the same person for the same person already, Further information can be sought if that is felt appropriate. The LCC may thereafter decide not to investigate if further information is not forthcoming, or if making a request for any information would be unlikely to flush out any relevant info. If the LCC does decide to investigate, this will be notified to the relevant parties (including the person who may have breached the obligation), and further information can be sought during any investigation, with a financial penalty for non-compliance with any request for information of up to £1,000.

Should the LCC determine, after an investigation, that there has been a breach, a fine can be imposed, up to a maximum of £5,000. This will only happen where: (a) the person that committed the breach has been given an opportunity to make an agreement with the LCC about what the person must do to remedy the breach and there has either been no agreement or a failure to fulfil any agreement, or (b) the LCC does not consider it appropriate to give the person that committed the breach an opportunity to remedy it because of that person’s previous failure(s) in this area. Anyone fined has 28 days to appeal to the Lands Tribunal for Scotland on the basis the imposition of it (a) was based on an error of fact, (b) was wrong in law, or (c) was unfair or unreasonable for any reason (for example because the amount is unreasonable). The final provisions pertaining to this regime relate to confidentiality and where any ingathered fines go (to the Scottish Consolidate Fund).

The levels of fine here are not exactly stratospheric – for example, an unregistered private residential landlord can face a fine of £50,000. Be that as it may, it should be acknowledged that moving from a system that involved no fines at all to any fines is always a shift. I do ponder whether it might have been worth allowing the levels of fine to be changed by future regulation (although there may be some criminal law consideration that stops this from being suitable).

Finally, it is worth pondering what these fines might be for as things stand. The regulations under section 44B need only relate to having a management plan, but that provision says nothing about the need to cater for breaching a management plan. The only continuing obligation that must be included in any regulations is a duty to consider a reasonable request for a lease from a community body, but provided a land owner does indeed consider such requests they can otherwise be passive (unless and until the regulations go further than the terms of the statute). Accordingly, any sanction for the owner of a large land holding failing to meet what is in their land management plan will more be about negative publicity than strict legal consequences.

Community right to buy: registration of interest in large land holding

Sections 2 and 3 of the new Bill tinker with the community right to buy provisions found in Part 2 of the Land Reform (Scotland) Act 2003. This is the scheme that confers a right of first refusal to eligible community bodies who have registered a community interest in land in a public register maintained by Registers of Scotland. Normally, steps need to be taken by a community suitably in advance of the land they are targeting being exposed for sale, albeit there are some provisions for a “late” application.

To save space, I won’t explain what those late application provisions are in detail, but essentially late applications are put through more of a wringer than non-late applications. For example, standard applications only need to be gauged as being in the public interest, but for late applications the factors bearing on whether a community’s scheme is in the public interest need to be strongly indicative of that being the case. Meanwhile, standard applications need to have a level of community support sufficient to justify a scheme being allowed to progress, whereas late applications need to have a “significantly greater” level of support than that. Also, even if you can meet these more onerous tests, there is a requirement that a community body has undertaken such relevant work or taken such relevant steps as Ministers consider reasonable prior to the land being exposed for sale. This can be a complicated provision to follow, but suffice it to say that the new Bill allows for much of the procedure to be side-stepped for large land holdings in suitable circumstances (although there will still need to be healthy support and a strong indication of the application being in the public interest, by virtue of those two requirements being applied by a different means).

Section 2 of the new Bill introduces 13 new sections to Part 2 of the 2003 Act: a new section 39ZA to take care of replacement procedural requirements; and twelve new sections in a new Chapter 2A, with the subheading “Extended Opportunity to Register Interest in Relation to Large Land Holding”. Before you ask, yes, section 1 of the new Bill amends the 2016 Act, whereas section 2 of the new Bill amends the 2003 Act. Statute navigation skills are going to be needed to make sense of everything by the end of this reform process.

A new section 46K of the 2003 Act introduces a threshold value that the new regime can apply to. It does this in a similar way to the land management plan provisions (allowing for single holdings and composite holdings), but with one fundamental difference: the area stipulation is simply that a large land holding exceeds 1,000 hectares (i.e. “smaller” mainland estates of 1,000-3,000 hectares are caught).

Any community seeking to acquire land through Part 2 of the 2003 Act and dealing with a 1000ha+ parcel of land can now make use of a brand new regime, where they are invited to do so by Scottish Ministers. With that in mind, section 46A provides that Scottish Ministers are to keep a list of the contact details of persons who wish to be told about any possible transfer of a large land holding in a particular geographical area. Such persons (along with relevant community councils, local authorities and national park authorities (if applicable)) then must be told of transfers of suitable land in the relevant area, as set out in section 46D(2)(b). The consultation had suggested that local registered social landlords (aka housing associations) might also be tipped off here, but they have not made the cut.

The starting point for this scheme is section 46B, which introduces a (temporary) prohibition on the transfer of affected land, to allow time for interest to be registered by a community body. The owner and, if relevant, a secured creditor with a standard security (commonly referred to as a mortgage) is barred from selling the land to allow eligible community bodies additional time and opportunity to submit an application to register an interest in the land. As the Explanatory Notes explain (at paragraph 35), this is an additional option for certain community bodies, and the existing late application procedure under section 39 of the Land Reform (Scotland) Act 2003 remains open to community bodies in relation to land that is a large holding of land (or part thereof) should they not be invited to submit an application under new section 46G or if such an application is somehow unsuccessful.

If an owner of a large land holding (or a secured creditor with a right to sell that land) wishes to transfer it, they must apply to the Scottish Ministers for permission via a prescribed notice. Ministers will then publicise this wish (in accordance with new section 46D), by arranging for prescribed information about the possible transfer of the land to be made publicly available on a website and sending the prescribed information about the possible transfer of the land to those detailed on their section 46A list and the other interested entities listed above. When they have done this, Ministers are to notify the person wishing to transfer the land that the section 46B(1) (temporary) prohibition is lifted once the period of 30 days beginning with the day that Ministers fulfilled their publicity duty regarding the possible transfer of the land has expired, but the section fudges this by saying if they are still considering matters when the period expires they should not give any notice until the have reached a decision as to whether they should impose a (further) prohibition in line with section 46F.

This further prohibition on transfer – which lasts for 40 days – can kick-in when: (a) Ministers have publicised the possible transfer of the land, or a larger area of land of which it forms part, in accordance with section 46D; (b) a person has submitted to Ministers a suitable note expressing an intention on the part of the person, or another person, to register a community interest in the land (called a “note of intention to register”); (c) the note of intention to register was received within 30 days of the Ministers sending information about the possible transfer in accordance with section 46D(2)(b); and (d) Ministers are satisfied that, before the expiry of this extra prohibition, it is likely that an application to register a community interest would be made in line with the note of intention to register and that there is a reasonable prospect of that application resulting in a community interest in the land being registered. That is to say, this extra prohibition should only be allowed when someone has given a suitable, timeous notice of intention to register AND it is likely that this can be followed by a full and plausible registration application. (This is not an easy provision to read, or indeed explain.) A further subsection allows for the prompt incorporation of the legal entity that will in fact be the community body that is to come to own the land.

Any transfer in breach of any prohibition is of no effect, unless one of the existing exemptions in section 40 of the Land Reform (Scotland) Act 2003 applies. This allows for “transfers otherwise than for value” to take place (the SPICe blog post gives the examples of transfers between spouses, and transfers between companies in the same group, and you could also add a transfer on inheritance). There also some specific exemptions, such as a transfer as a result of a divorce or separation agreement. A specific provision (section 46I) allows for the prohibition on transfer to be lifted by Ministers in exceptional circumstances, such as to alleviate, or avoid, financial hardship. (A similar safety valve exists in relation to forced transfers of croft land to a crofting tenant when this would cause the landlord a substantial degree of hardship.) Any lifting of the prohibition can only follow on from a suitable application by the owner of the land.

That concludes this new right for a community to gatecrash a sale of a large land holding, save for the technical amendments found in section 3 of the the new Bill. This section modifies three statutes to ensure the new regime is compatible with the Conveyancing and Feudal Reform (Scotland) Act 1970 (regarding the enforcement of standard securities), other provisions of the Land Reform (Scotland) Act 2003, and the Land Registration etc. (Scotland) Act 2012 (to allow the Keeper to flag any attempts to register a transfer that does not take account of the new regime to the Scottish Ministers).

This new scheme could, theoretically, allow a well-organised and well-resourced community to acquire the whole area of a large land holding if all the stars align. As the Explanatory Notes acknowledge, though, it “will more usually be the case” (at paragraph 32) that part of a large land holding could be hived off from another transfer. The usual community right to buy valuation provisions would then still apply. Current market rates may make it difficult for some communities to find the funds needed, and as such we now turn to the next set of provisions that are not predicated on community action: compulsory lotting.

Lotting of large land holding

Section 4 is headed “Lotting of large land holding”. It deposits a brand new Part 2A into the Land Reform (Scotland) Act 2003, which contains 23 sections (running from 67C to 67Y – section numbers 67A and 67B were already taken by new provisions inserted by the Community Empowerment (Scotland) Act 2015). New Part 2A is headed “Lotting of large land holdings”. Why the final word in the heading of this Part is pluralised while the final word in the heading of the section in the Bill is not is not clear.

This is the biggest of the new substantive schemes that is inserted by the new Bill. It is also pretty innovative in terms of Scottish land reform, in that it is in no way predicated on a community proactively taking action. That is not to say that this new Part 2A is a community free zone, but is noticeable how rarely the word “community” appears in this Part given the previous approach to Scottish land reform. (The word “community” only appears in section 67N and indirectly in section 67O, but more on that below.) I’m conscious this is already a mega-blog and I will accordingly keep my coverage of the lotting provisions focussed. If there is a clamour for more coverage (which, I grant you, seems unlikely), I may revisit this content.

What does this new scheme do? Like the provisions just mentioned, they can prohibit a transfer of a large land holding in certain circumstances. Also like the extended community registration of interest provisions, these can bite in relation to a threshold figure of 1,000ha, but there are some other considerations as well. The land affected by the prohibition is set out in section 67G.

The first possibility of a land parcel being caught by the provisions is simply that the area to be transferred exceeds 1,000ha in area. A second possibility comes to the fore when a parcel of land to be transferred exceeds 50ha in area and various other criteria are met, including that it forms part of a large holding of land and that there is a plan to transfer another part, or parts, of the large holding (and suitable notice under the land reform legislation has been given). In that situation, the overall picture is then looked at to gauge whether the combined area of the first parcel of land and the other part(s) of the large holding that are to be transferred exceeds 1,000ha (disregarding from that total any area in respect of which a contract has been concluded since any initial notice of intention to transfer was given).

Section 67H offers some further detail about what a large land holding means, setting out once again the familiar scheme for single holdings and composite holdings. There is an error in the new Bill here, with subsections (2) and (3) incorrectly cross-referring to each other. Hopefully this will be picked up. Sections 67I and 67J bring in familiar details about connected persons (tracking the other provisions in the new Bill) and exempt transfers (like other provisions in the new Bill, drawing on the existing 2003 Act exemptions).

With that overview of what the rules can and cannot apply to, we now return to what the rules are. Section 67C provides the first prohibition: thou shalt not transfer land if section 67G applies, the transfer is not exempt, and where there is no lotting decision in effect in relation to the land. Section 67D provides the second prohibition: thou shalt not transfer land where a lotting decision is in effect unless the transfer is exempt or the transfer is taking place in accordance with that decision or with Ministerial approval. Further provisions in section 67D explain that a transfer cannot take place of an area that does not correspond with a lot specified in a lotting decision, and that a transfer that would result in the same person or connected persons owning more that one of the lots specified in the lotting decision that will be of no effect.

This leads inevitably to the question, “what is a lotting decision”? This key concept is introduced in section 67F. With reference to the following sections of 67M, 67N and 67R, it is explained that a lotting decision is a decision by Ministers about whether land is to be transferred in lots. It is also clarified there that any references to lotting decisions relate not only to the whole area of land but also to any part of that area. There is then some wording about when a lotting decision comes into effect (the next day if no lotting is needed, and a little later if it is decided land may only be transferred in lots, depending on whether there is an appeal or not), and when a lotting decision is to cease having effect. This will happen when the land is transferred in compliance with the decision (i.e. to someone not connected to the transferor), when there is a successful appeal to the Court of Session (that’s right, straight to the top; no Lands Tribunal for this appeal), if the decision is withdrawn after a review by Ministers, or when the decision expires. Expiry is normally after five years, but it can be after one year when a land owner has pressed for an expedited decision owing to their financial hardship (more on that below). These time periods can be changed by regulation.

Attention then turns to section 67K, and Ministers’ duty to make a lotting decision. Normally this will happen when they receive a valid application from the (outgoing) land owner, it being recalled the first prohibition will prevent this from happening unless there is a lotting decision in place. The other occasion where Ministers will have a duty to make a decision is when something comes back to their desk after a successful appeal. For most land, an application will be valid if it is made in the prescribed manner by the owner of the land in respect of which the application asks for a lotting decision, or the owner of part of that land where a composite holding is in play, or by a secured creditor (if relevant). The other thing to consider though is whether an existing lotting decision might derail any (further) application, because section 67K(2)(c) provides that a valid application cannot relate to that is (in whole or in part) already subject to a lotting decision or where another application asking for a lotting decision is being considered.

Certain unorthodox situations are then catered for, with Section 67L allowing anyone entitled to ask for a lotting decision in the first place to then ask the Ministers to stop their consideration. Section 67M then deals with the aforementioned expedited lotting decision where an owner is facing financial hardship. This allows Ministers to decide that land need not be transferred in lots if they are satisfied that the owner of the land in question wants to transfer it in order to alleviate, or avoid, financial hardship, and waiting for a “standard” lotting decision (under section 67N) is likely to cause, or worsen, that financial hardship.

Turning now to section 67N, this provides that Ministers may make a lotting decision with the effect that land may only be transferred in set parcels of land rather than en bloc to a single person only if they are satisfied that this new ownership jigsaw would be comparatively more likely to lead to the land being used in ways that might make a community more sustainable. Assuming this is thought to be the case, the lots must be specified in the lotting decision. Where Ministers decide not to make a lotting decision, they will nevertheless make a lotting decision stating that the land need not be transferred in lots. Before making any lotting decision, Ministers are to request (and take into account) a report under section 67O in relation to the land. The production of such reports is a further role of the new Land and Communities Commissioner, and the only steers in section 67O about what the LCC will have to do is the need to prepare a report in accordance with any instructions given by Ministers, and that a report is to inform the Ministers. Finally, section 67N says that Ministers must have particular regard to the frequency with which land in a given area becomes available for purchase on the open market and the extent of ownership concentration in a given area when considering the effect that a decision stating that land may only be transferred in lots might have on a community.

This is something of a shift away from the public interest test that the consultation adverted to. As noted above, it is also not quite in-keeping with the tendency of earlier legislation for a community to take proactive steps. It does however introduce the community at a one-step-removed level, such that it is a decision is solely to be informed by the sustainability of a community. Presumably where there is no resident community there will be no scope for any lotting decision to be made. Unless I am mistaken, “community” is not ascribed with a particular meaning in the statute.

The remaining provisions of this Part deal with the aftermath of a lotting decision. Section 67P allows for the land owner or a relevant secured creditor to request a review of a lotting decision after one year has passed (and thereafter on a yearly basis if they wish to review a review). Section 67Q allows for a review request to be withdrawn, but where no withdrawal happens Ministers then have three options: stick with the original decision; make a replacement decision; or buy the land in question (see below). Section 67R caters for the making of a fresh decision (basically in the same terms as previously, but with an additional requirement to speak to someone who (in their view) is suitably qualified, independent and to has knowledge and experience of the transfer of land of a kind which is similar to the land in question. Perhaps the main impact of a review though is that it unlocks section 67S: “Offer to buy following review”.

Section 67S provides a mechanism for state acquisition of land (for value). It lays out how Ministers may (but not “must”) offer to buy land following a review of a lotting decision, and importantly provides that this will only happen if Ministers are satisfied that the fact that the land has not been transferred since the lotting decision was made is probably attributable to the land being rendered less commercially attractive than it would have been because of the lotting decision prevented it being transferred alongside other land.

Should Ministers offer to buy the land in question, only a price set by the appointed valuer or by the Lands Tribunal (where an appeal is made against the appointed valuer’s price) can be paid; there is no room for horse trading. This valuation regime may be bolstered by regulations. Section 67T is also potentially relevant in relation to a purchase by Ministers, such that the owner (or secured creditor) can specifically request that Ministers buy the land. Ministers must then consider this fully in the usual way (i.e. are they satisfied the land is less commercially attractive etc.) and, if they decide against proceeding, give written reasons for that. Any Ministerial decision here is subject to appeal, again to the Lands Tribunal, but subsection (5) makes clear that even if the Lands Tribunal determines that Ministers are entitled to be satisfied that the test is met, all they need to do at that stage is consider making an offer.

Section 67U deals with an appeal against a lotting decision, and as noted above this goes to the Court of Session. I’m not immediately clear as to why the Court of Session is the appointed forum here, but it is. Section 67V contains compensation provisions, such that an owner of land (or a secured creditor) is entitled to compensation from Ministers for losses or expenses incurred in complying with the procedural requirements of the regime or are attributable to a potential transfer of the land being prevented or to a lotting decision stating that the land may only be transferred in lots. Regulations are to follow regarding this important matter, but for now it can be noted that Ministers are the first port of call to determine how to fully compensate someone, with the possibility of an appeal to the Lands Tribunal.

Finally for this new compulsory lotting regime, various “further provision” sections deal with the publicity of lotting decisions, the treatment of secured creditors, and setting out what provisions can be changed by regulation (namely what constitutes an exempt transfer, the land which is caught, and time periods relating to how long lotting decisions last for and when they can be reviewed). A new section 5 of the new Bill tweaks certain aspects of the 2003 Act to do with the making of regulations and decisions under the new regime.

Land and Communities Commissioner

I’ve already touched on the various roles of the new Land and Communities Commissioner, but for completeness I’ll mention that section 6 of the new Bill deals with the necessary administrative matters of creating this new office with the existing Scottish Land Commission.

The LCC is a bit like the existing Tenant Farming Commissioner. By that, I don’t mean that they have the same functions, but rather both of these offices are suitably specialised and as such cannot be categorised in the same way as the other five Land Commissioners.

Beyond the necessary changes to the Land Reform (Scotland) Act 2016 to allow there to be this extra figure in the Commission, I will highlight a couple of noteworthy points in the new Bill.

First, to be eligible to be the LCC, the candidate is to have expertise or experience in land management and community empowerment.

Second, Land Commissioners must have regard to the exercise of the LCC’s functions (see below) when they exercise any of their functions in relation to large landholdings. This mirrors their deference to the TFC in so far as the exercise of their functions relates to agriculture and agricultural holdings (per section 22(4)).

Finally, new sections 38A, 38B and 38C of the 2016 Act set out the LCC’s functions, their ability to delegate, and the ability to appoint an acting LCC when the office is vacant. For completeness, the functions of the Land and Communities Commissioner are: (a) to enforce obligations imposed by regulations under section 44A [in relation to community-engagement obligations]; (b) to exercise the function conferred on the LCC by Part 2A of the Land Reform (Scotland) Act 2003 [for the extended opportunity to register a community interest in land; (c) to collaborate with the Land Commissioners in the exercise of their functions to the extent that those functions relate to the functions of the LCC; and (d) to exercise any other functions conferred on the LCC by any enactment.

Part 2 – Leasing Land

As noted above, Part 2 relates to “Leasing land”. One might make a slight harrumph about agricultural holdings and small landholdings being lumped in with land reform more generally rather than getting their own nominate statute(s), but the precedent was set with the Land Reform (Scotland) Act 2016 including such matters and here we are again.

Part 2 is subdivided into three chapters. The first of those chapters contains a single section, which provides a skeleton for a future model lease for an environmental purpose. We are also given a definition of an environmental purpose, but otherwise matters are left for regulations (and the model lease is supposed to be brought in within two years of the Bill receiving Royal Assent).

As I understand, one planned benefit of this model is that it should avoid any issues that might arise from people shoehorning non-agricultural activities into an agricultural lease (as agricultural leases must primarily be used for agriculture in order to ensure a tenant’s compliance with the lease). This new model will have a capped amount of agricultural activity (of less than 50% of the land use activity).

There is not too much more than can be said at this stage about this environmental purpose lease simply because without that model lease it is not clear what benefits this letting vehicle will bring to either landlord or tenant that could not be achieved with a common law (non-agricultural, non-residential) lease for a specific purpose. In fact, even with a model lease I am not clear what benefits there might be, but given the model lease (according to section 7(1)) is to be used “(wholly or partly) for an environmental purpose” perhaps it is envisaged that it will not be possible to contract out of some features of it.

Next, chapters two and three relate to small landholdings and agricultural holdings respectively. Small landholdings are also covered in the Schedule to the Bill.

I’m not going to go into the finer points of detail about the changes to small landholdings here. Instead, I’ll simply quote from the Explanatory Notes to give an overview of the changes.

Section 8 of the Bill introduces the schedule. This introduces a number of rights in respect of small landholdings for the first time: specifically, in relation to diversification and the right to buy. It also consolidates (i.e. restates in one place) and makes a number of policy changes to the current archaic law on small landholdings in relation to certain topics: specifically, in relation to rent, assignation, succession, and compensation. The law on renunciation is also restated with only minor consequential changes (arising from the removal of provisions about loans which no longer apply). As a result of all of these changes, the current law as it applies to these topics is disapplied.

Paragraph 94

One other point relating to small landholdings is that they are now to be brought within the purview of the Tenant Farming Commissioner. Some consequential changes are made to the parent legislation for the TFC accordingly.

The Policy Memorandum suggests (with reference to The Scottish Government Agricultural Census 2021) that there are 59 (fifty-nine) small landholders in Scotland, meaning in raw numbers terms these changes won’t have a massive impact (albeit clearly changes in the law will be important to parties with such a lease).

We then turn to agricultural tenancies (which I am using as a catch all term for the many tenancies governed by Agricultural Holdings (Scotland) Act 1991 and the Agricultural Holdings (Scotland) Act 2003 (both as amended)). Many of the important reforms as regards agricultural tenancies relate to the securest form of agricultural holding governed by the Agricultural Holdings (Scotland) Act 1991, although some provisions of the Bill will affect newer agricultural tenancies (e.g. in relation to tenant diversification, resumption of land by the landlord, and rent review). Crunching the numbers again, the Policy Memorandum tells us there are 3,821 secure 1991 Act agricultural tenancies, meaning they are not quite as endangered as small landholdings but they are not exactly ten-a-penny.

As to what these provisions will actually do, I am going defer to others who are dealing with such tenancies day-to-day before I career heelster-gowdie into this very specialised area. Hopefully expert practitioners might be moved to post something soon. I will try to offer some superficial coverage though, drawing on the Business and Regulatory Impact Assessment (at paras 4.5.2-4.5.11).

That BRIA content begins by noting that, “The provisions collectively encourage agricultural tenants to participate in sustainable and regenerative agricultural practices towards delivering the Scottish Government’s Vision for Agriculture.” It then goes on to highlight the various amendments in context, pertaining to diversification (so that the environmental benefit of a new activity can be included in a tenant diversification notice and in turn enable the Scottish Land Court to consider environmental beneficially diversifications), agricultural improvement (to facilitate tenant activities such as renewable electricity measures for on-farm energy needs, hydroponics or the creation of silvopasture), and good husbandry and estate management (which would allow practices that are apparently important to ensure access to future agricultural funding, such as by allowing tenant farmers to leave uncropped field margins and participate in a wider range of sustainable practices), plus related changes around waygo (to enable a wider range of activities to be included as factors to be taken into consideration in calculating any sums at waygo, and separately to introduce a set timescale for the waygo process). There are then changes in relation to resumption compensation (where a landlord recovers all or some of the let land from the tenant) and game damage compensation that a tenant can expect should such circumstances apply. Finally, the pre-emptive right to buy process for secure 1991 Act tenants is tweaked, plus a there is to be a new rent review scheme (which I won’t try to explain here). Intriguingly, this newest Bill removes a change to the registration process that was included in the Land Reform (Scotland) Act 2016, which would have (if it had been brought into force) removed the need for an agricultural tenant to register an interest. Otherwise, we await further regulations about this tenant’s right to buy, and I cannot really comment beyond that. The newest Bill also sweeps away the rent review regime that would have been brought in by the 2016 Act. Will the new provisions have more luck? That’s a question for another day.

All of this is also considered in the aforementioned Strategic Environmental Assessment of Agricultural Tenancies, Small Landholdings and Land Management Tenancy Proposals: Consultation Report. That assessment was, however, only based on 12 responses to a questionnaire, and thus must be treated with due care and attention.

One final point on such rural tenancies: a consolidation statute would be really nice, one of these days. I suspect consolidation is not a priority though.

What’s not in the Bill?

The consultation aired quite a few things that don’t appear in this Bill. There’s not much about a beefed up land rights and responsibilities statement, for example: the only reference to the LRRS is in relation to using it to inform any regulations made in relation to the community-engagement obligations of the owner of a large land holding. There’s not much on cross-compliance. There is nothing about recipients of Scottish Government land-based subsidies needing to be registered and liable to pay tax in the UK or EU. There is nothing about tax, albeit that might not be a surprise given fiscal matters were basically just tagged onto the earlier consultation. Now, it may be the case that certain matters will be picked up in a future Agriculture and Rural Communities Bill (which is alluded to in the recent SPICe Spotlight), so I won’t labour this point too much. Again, we must wait and see, although we can at least acknowledge the recent endorsement of the general principles of the Agriculture & Rural Communities (Scotland) Bill by the Scottish Parliament’s Rural Affairs & Islands Committee. and point to sections 7 and 13 of that Bill in terms of compliance with guidance and/or conditions.

What next?

Legislation at the Scottish Parliament goes through three Stages. Some evidence will be heard before a Committee, Reports will happen, and amendments will be proposed and voted on. Per my earlier comment, 2025 is the year that we can anticipate that this will be passed.

Some thoughts on the proposed continuing rent protections for private tenants, and an observation about the return of rent pressure zones

The Cost of Living (Tenant Protection) (Scotland) Act 2022 was born to die. Its provisions around rent increases and evictions in relation to residential tenancies were always time-limited, with an absolute backstop to most of its provisions of 31 March 2024. Regulations were passed to ensure it did survive until that date (with some tweaks along the way to the rate of permitted rent increases in the private sector and to sculpt its application in the social and student tenancy sectors). In broad terms, the end of March this year is as far as it can be extended, unless a new statute from the Scottish Parliament to override its initial structure was passed. Such an Act of the Scottish Parliament is not forthcoming.

There is, however, one aspect of the 2022 Act (which I will shorten to “COLA”) that can be jolted along for another year, namely the scheme for “rent adjudication” found in Part 3 and Schedule 3. Sections 10 and 11 of COLA were programmed to expire on 31 March 2024 at the point of enactment, although enacted alongside this date was a provision to extend rent adjudication for another year by regulation. This is what the Scottish Government now plan to do. Draft regulations and accompanying documents to this effect have been published.

This blog post will analyse how the proposed rent adjudication scheme will operate, offer some words about why the Scottish Government may have chosen this approach (in light of the various interests that need to balanced), and highlight the old rules around rent pressure zones that might have offered an alternative or indeed additional approach in particular hotspots of pricey rentals. It will conclude by offering a short reflection on the sunset of the cost of living eviction regime.

Rent adjudication

The scheme for rent adjudication was only ever going to be needed when the main COLA rent measures came to an end (and hence the possibility for it to linger on after the expiry of the primary regime). I have explained those rent measures elsewhere and I won’t do so in detail again here (see this Strathclyde Law Blog post if you do wish a refresher), and I have also digested the judgment where those rent measures (and COLA’s eviction measures) survived a judicial review challenge brought by a coalition of bodies interested in the provision of private lets in Scotland. In short, the temporary COLA regime provides as a starting point that a private landlord may not increase the rent payable by more than a combination of a) the permitted rate, which has been 3% since 1 April 2023; plus b) a potential sum relating to “prescribed property costs” (relating, for example, to mortgage interest) on application to the relevant rent-setting body to a maximum of up to a further 3%. That is to say, in general terms the COLA regime as things stand allows a landlord to increase rent by between 3% and 6% (once per year). There is scope for a tenant to challenge the additional 3% if they dispute the expenses or indeed the landlord’s working (assuming they do so in the appropriate way).

This rent increase regime is being phased out and replaced by a new one, as I’ll explain in the next paragraph. I will quickly note what is not changing though, namely that this is about in-tenancy rent increases rather than new tenancies. This is not rent control based on the let property, rather it is based on the tenancy. As such, it is still open season as regards new rent for new tenancies. Further, new tenancies may also include house share arrangements that are coming to an end where there is one or more of those house sharers wishing to stay, per my earlier blog post on the so-called “joint tenancy trap”. I should note that I’m not highlighting this as a particular criticism of the new regime: I think it’s fair to say it would have been highly if not impossibly ambitious to bring in anything fundamentally different for this year alone.

Returning to what the new regime for rent adjudication actually does, it allows for a rent increase (again with the potential for challenge by a tenant who thinks a landlord’s sums don’t add up) based on the lowest figure produced from three options. The Scottish Government news release explains these three options are:

• the open market rate;
• the rent requested by the landlord; and
• a comparator based on the difference between the market rate and current rent.

This new, temporary regime will apply to appropriate tenancies under the Housing (Scotland) Act 1998 and the Private Housing (Tenancies) (Scotland) Act 2016. For the rest of this post, I’ll proceed on the basis we are dealing with private residential tenancies under the 2016 Act, both for ease and also as PRTs are the much more common letting vehicle (relating as they do to almost all private sector lets of a home entered into since December 2017).

The draft regulation uses a slightly different order and slightly different terminology to the news release, and in so doing sets out more instantly how the comparator works, with its three options being:

• the proposed rent,
• the open market rent, and
• where the market difference is more than 6%, the permitted rent.

The open market rent is not a concept unique to the COLA regime and I won’t consider it in any depth here, save to say it is not about what is fair or what is reasonable, it is instead focussed on what the market tells us.

There are two new defined terms, “market difference” and “permitted rent”. I’ll take the second one first, both because it is perhaps easier to understand and because that is what the draft regulation does.

The “permitted rent” is one of two options:

(a) where the market difference is less than 24%, the calculated amount,
(b) where the market difference is 24% or more, 12% more than the current rent.

Hold that thought about what the “market difference” is. Hold a further new thought about what the “calculated amount” is – yes, that is a new defined term. What I want to stress first is that this creates a cap of a 12% overall increase. This is double the maximum permitted COLA rent increase as things stand. Some might want to end the commentary there and argue this is too much of a hike. Others might note the Scottish Government’s explainer and the information therein, where it is noted that market rents in Glasgow have increased by 22.3% and as such is 10.3% lower than what some landlords might be able to achieve.

What about the “calculated amount“. This is the amount (to the nearest £1) determined using this formula:

where: C is the current rent; and D% is the market difference expressed as a percentage.

Formulae make many people (including lawyers – maybe even especially lawyers) baulk. Even though I like to think I am mathematically minded I know my limits in terms of trying to explain how this operates (especially in a blogged format), so I won’t really try here (and there is one formula to go). For now though, I will highlight that the way this formula is framed is to allow for an increase of at least 6% of the current rent. That is to say, rent increases up to and including 6% are catered for in the “permitted rent”. An increase of 6% will accordingly be permissible in most circumstances, provided the new rent does not exceed the open market rent; remember, after any increase the tenant pays the lowest of the open market rent, the proposed rent, or the permitted rent.

This leaves us the other new defined term, namely the “market difference”. This means the percentage figure (to the nearest two decimal places) determined using this formula:

where: C is the current rent, and M is the open market rent.

Again, I’m not going to try to be an amateur maths teacher, but to their immense credit the Scottish Government has provided four worked examples of how this would all work and I would invite everyone who has got this far to look at those. Drawing on the words that they use in those examples, it can be explained that rent increases are subject to a “taper approach” if the proposed rent increase is above 6% of overall rent. In Example 2, they give the example of a landlord who believes an increase of 8% is appropriate with the current market, and the current market agrees. The landlord would get the 6% increase anyway, and then if the gap between the current rent and open market rent is indeed 8%, then the rent increase would be capped at an increase of 6.7% higher than the current rent. Where does this 0.7% come from? Go back to the calculated amount formula, and the fraction there tells us it will be (8%-6%)/3, i.e. 2%/3, so 0.666667% (rounded to 6.7%).

Still with me? Sorry, I said I didn’t want this to be a bad maths lesson.

Example 3 gives the example of a landlord who thinks a large rent increase is appropriate, and again the market agrees (the example given relates to an open market rent 25% above the current value). Working this through to the “calculated amount” formula would give an increase of more than 24%, so the permitted rate instead applies.

Okay. Enough maths. Well, just about enough maths, because I will now launch into an exercise about comparing formulae, albeit this will link to a legal point that I don’t think has been fully covered anywhere. That will relate to this question: is this scheme better for tenants with private residential tenancies than the rent pressure zone scheme that is catered for in sections 35-41 of the Private Housing (Tenancies) (Scotland) Act 2016?

Rent pressure zones

As noted above, I am proceeding on the basis we are dealing with private residential tenancies under the 2016 Act. The 2016 Act did not envisage nationwide rent control when it was brought in, but it did afford local authorities the chance to apply to Scottish Ministers to the effect that all or part of the authority’s area be designated as a rent pressure zone.

The process for getting a rent pressure zone – or RPZ – was not simple. The local authority had to gather various pieces of evidence and comply with Scottish Ministers’ requirements (including mapping (if relevant) and costing). Assuming this was done, then the Scottish Government had 18 weeks to respond. If the Scottish Government agreed to the RPZ, then (in terms of section 38) any rent-increase notice issued for a PRT within the RPZ would be restricted in accordance with a formula, based on: the current rent; the consumer prices index; plus one percentage point plus the number of percentage points (if any) specified in the regulations for the RPZ.

Astute readers will have noticed that I have been using the past tense for the past couple of paragraphs. Why? This is because COLA suspended rent pressure zones. They weren’t needed under the COLA regime, was the thinking of the time.

Are they needed now though? Is the new rent adjudication scheme more appropriate than the rent pressure zone scheme that is already on the statute books, albeit in stasis?

I have absolutely no idea.

My question is though – does the Scottish Government know? Has it weighed this up? I don’t know if it has. There is no mention of RPZs in the Statement of Reasons for the rent adjudication scheme.

Turning to a legal point, my reading of the current draft regulations is that the rent pressure zones remain suspended when the rent adjudication scheme is in play. This is because the relevant saving provision seems to keep the suspension of RPZs in place. Sure, there is maybe a nice question of statutory interpretation as to whether RPZs might nevertheless be revivified, but I wonder if this saving provision could be changed to make absolutely clear that RPZs can be brought in when a local authority thinks it is appropriate to do so. This could be done in a way so that the new rent adjudication scheme applies in the period when the RPZ is being researched, prepped and considered by Scottish Ministers.

Up until this moment, this blog post has largely been me trying to make sense of what the regs actually do, but this is me actively calling for a potential law reform. I don’t know if this would be appropriate, as it really is a policy rather than a legal question, but if you think it could be and you are in a position to campaign for or make a change, this would be what I want you to take away from this blog post.

A quick comment on evictions

I don’t have too much to say about evictions and the expiry of the COLA regime. As I said at the start, this statute was born to die, and the relevant provisions for evictions will indeed cease as from 1 April 2024 (save for those actions commenced prior to that date). “Vanilla-flavoured” evictions are accordingly back for all residential tenancies. Sticking with the PRT example, there will no longer be any need for a landlord to prove financial hardship to trigger a sale of the let property or for the landlord to move into the let property, and only standard rather than substantial rent arrears will be needed: we will be back to Schedule 3 of the 2016 Act, albeit mitigated by the reasonableness test that applies to all grounds since the passage of the Coronavirus (Recovery and Reform) (Scotland) Act 2022.

Another slightly quirky thing to note is that the reform to section 36(3) of the Housing (Scotland) Act 1988 (damages for unlawful eviction) also falls away, meaning the change that LSA campaigned for so as to allow a more realistic measure of damages for tenants who have been ousted from a property falls away and damages for irregular evictions are back to what they were before (based on the difference in valuation between the property with vacant possession and the property with a sitting tenant). This was not really a “cost of living” issue, but by sweeping this reform up into that legislative vehicle in the first place it now gets swept away when COLA expires. No doubt this will be something to look out for again in any future Housing Bill.

Conclusion

So it’s out with the old rent cap, and in with the new rent adjudication. In the main I’ve refrained from commenting on the merits of what the Scottish Government plans to do here. I’ll conclude by saying I do understand the balance that Scottish Ministers are trying to strike. Given they survived a legal challenge to the temporary rent controls that allowed a 6% increase, it would have been a tad cavalier to propose anything stronger than that outgoing regime now (lest they invite further legal challenge). There also have been some observations on the impact the existing rules have had on developer or investor behaviour (see e.g. this report in The Times), and again this is something they will have thought about. I do however wonder if a trick has been missed in relation to RPZs though. Given how tricky they are to introduce and the fact they were put into abeyance, I had previously mused that we might never actually see a rent pressure zone in Scotland. I would be interested to hear the thoughts of others as to whether a case can be for them after all.

My 2023 in review

Another year, meaning it is time for yet another reflective blog post.

By which I mean, it is time for me to go back to my “My 2022 in review” post, copy the intro and the structure, and adapt. Yes, I have been doing this for more than a few years and, yes, this is both lazy and tried and tested.

Readers of my blog will know that I have uploaded a short post at the end of my blogging year since 2013. I tend to offer some reflections on the work and work-related things I’ve done in the year and I occasionally offer some thoughts on interesting events, then veer into analysis of my five most read posts from that year. Here I go again, although in something of a blogging cop out, I will restrict this annual blog post to pretty much my own frame of reference.

What to say about 2023, then? Well, once again it has been a challenging year for many people in many ways [*gestures at everything*]. In something of a blogging cop out, I will restrict this annual blog post to pretty much my own frame of reference.

This was a relatively normal “day job” year, albeit punctuated by some industrial action in the university sector. We did get a settlement in relation to our pension – yay! There were other aspects of this dispute, which perhaps linger despite there no longer being a mandate for industrial action, but as regards the pension this always (to my mind) seemed a more logical one for the sector and the union to settle. Anyway, hopefully that’s that…

As to the actual “day job” I spent the first half of the calendar year covering a colleague as Director of Strathclyde’s Clinical LLB degree programmes. I played this role last year as well, supervising the programmes where students integrate their University of Strathclyde Law Clinic experiences with their actual modules. Much like last year it was great to be involved with that, and I’ll continue to support the Clinic and pro bono more generally when I can even without that particular formal role. I also had quite a productive year curating the Strathclyde Law Blog, with twenty-nine blog entries. Granted, some of these were “cross posts” (i.e. they were also hosted elsewhere), but it was great to have so many posts from many interesting people on many interesting subjects. I even had a couple of posts there, but don’t let that dissuade you from visiting the site.

Work-related output that I can point to to prove I wasn’t an absolute slacker (although see above re industrial action, which did affect productivity a bit…) starts with getting the third edition of the Commercial Law Essentials textbook over the line. This was last published ten years ago with Dundee University Press, and the new edition is published by Edinburgh University Press. Another change for this edition is the addition of former University of Aberdeen colleague Alisdair MacPherson to the writing team, which was particularly useful for the content on bankruptcy and diligence. You can read a little more about this book in an earlier blog post. I also had a few wee publications (a book review, a case comment, and a co-authored piece with Peter Robson on private renting in Scotland in the legal journal the Juridical Review). I’ve also been involved with a couple of “knowledge exchange” activities, including one on Community Carbon Offsetting (with a related report published online). I also wrote a paper for Community Land Scotland about how the community right buy found in Part 2 of the Land Reform (Scotland) Act 2003 has fared whenever it has made contact with the court system. [Spoiler alert: no community body has ever come out in top in such a situation. There might be all sort of reasons for that: all my paper does is set out the various reported cases and offer some analysis of each case.] Finally, I finished a commentary for a project that reimagines judgments where a notional judge has taken on board considerations relating to the emerging “Earth Law” approach. That is to be published open access in 2024 and I will point folks to the collection when I can.

Away from the day job, but still very much relevant to my interests, I’m still involved with the Scottish Land Fund committee, which offers support to suitable land acquisition projects. If its activities might be of interest to you, have a look at the Scottish Land Fund website.

Okay, here is my blog breakdown for 2023.

STAT ATTACK

My top five base drones of 2023 (excluding the blog’s churning home page and any posts from earlier years) were as follows:

In 1st place, a post about the judicial review of the rent and eviction controls in the Cost of Living (Tenant Protection) (Scotland) Act 2022. This post was me trying to make sense of a challenge to the measures enacted by the Scottish Parliament and my attendance at the related single-day hearing at the Court of Session. I hope the post maintains a degree of interest for readers, even though it has been superseded to an extent owing to Lord Harrower’s judgment which was pronounced on the matter in November. I published a blog post about that ruling this month – far too late to trouble my annual stats.

In 2nd place, a post about terminology surrounding access rights conferred by the Land Reform (Scotland) Act 2003. At the time I was writing this particular blog post I knew this was the kind of post that I didn’t really want to write. I was however of the mind-set that I couldn’t not write the post, given I had been singled out in someone else’s blog post in a manner that I felt (and still feel) was unfair. I’ve said all I needed to in that reply post, so I won’t add anything further here, save to observe – entirely cattily – that no reply to my reply (or indeed any acknowledgement of my reply) ever followed.

In 3rd place, a post from the start of the year offering an update about the residential tenancy situation after the then most recent turn of the Cost of Living (Tenant Protection) (Scotland) Act 2022 emergency rules. That post has also been somewhat superseded, so I’ll take the liberty of promoting my 6th place post to get an honourable mention, being a post about a tribunal case applying the legislative scheme.

In 4th place, a post about deer management in Scotland. This detailed the amendments made around close seasons for male deer and permitted ammunition for deer control.

In 5th place, yet another post about residential tenancy law, in this case about an issue brought to the fore by the current emergency regime interacting with co-tenancy (house-share) situations. As explained there, this followed on from a BBC documentary, although the legal problem (such as it is), means that no single tenant can bring a private residential tenancy to an end without the agreement of any other co-tenant(s). This has been the situation since the Private Housing (Tenancies) (Scotland) Act 2016 was brought into force, it’s just that the current rules (which are in play until March 2024) allow a landlord to name whatever price the market will allow at the start of a new tenancy, and any co-tenant(s) seeking to stay after one co-tenant leaves might have to face up to a newly increased rent to stay in the place they currently occupy. This is a complicated situation which is under-explained here. Do have a look at the blog post in question if you need any further information as I hope that gives a pretty full exposition of the matter.

Curiously, my most read post in the preceding twelve months was my 2020 offering about the defamation case of Wildcat Haven Enterprises CIC v Andy Wightman. I did notice a spike in the stats around the time the winding up of the relevant company was announced, which I think drove people to what (I hope) is a pretty definitive account of the affair.

Returning to 2023, I also wrote about the effectiveness of community right to buy legislation and on (yes, you guessed it) residential tenancy reform after the permitted rate for a rent increase changed for the Strathclyde Law Blog.

What next?

This coming academic semester I’ve got some time to get my teeth into a bit of research. One project I have taken on relates to the so-called “abuse of right” doctrine, aka aemulatio vicini in Latin. This relates to situations where someone has an entitlement to do something, but in particular circumstances allowing this to happen could be seen as oppressive of others. Not too much has been written about this from a Scots law perspective in recent years (with Elspeth Reid being an honourable exception). This is a project involving various European jurisdictions and I am to offer a view from the UK. I’ve also got various other projects that I’ve had on the back-burner for a while (including something to do with rural housing burdens, which I mentioned last year and I have not properly written up). I did at least manage to get something published on the various Scots law landlord and tenant reforms that are going on, so I’m not completely embarrassed when I look back at last year’s equivalent reflective blog post.

As ever, I will literally keep you posted about any new output on this here blog.

That’s enough from me for 2023. All the best for 2024.

Court of Session judgment in the judicial review of the rent and eviction controls of the Cost of Living (Tenant Protection) (Scotland) Act 2022

On 2 November 2023, the opinion of Lord Harrower in an important judicial review for the Scottish private rented sector was published. This case was a challenge against measures introduced by the Scottish Parliament to regulate rent increases and evictions brought by a coalition of bodies interested in privately letting out residential properties in Scotland. As is apparent from that opinion, and as I will discuss here, the challenge was unsuccessful. This means the rent cap and partial eviction moratorium found in the Cost of Living (Tenant Protection) (Scotland) Act 2022 (as amended by relevant regulations) will survive until at least 31 March 2024.

Over a month has passed since the opinion was published, which means the dust has settled somewhat, plus I have had a little more time to mull things over. Separately, shortly after this judgment, a post by Professor Kenneth McK. Norrie appeared on the Strathclyde Law Blog. Kenneth has now retired from full-time teaching at the University of Strathclyde after a glittering career. On his way out, he delivered a few words at a leaving do, and these words have been captured as a blog post that I heartily recommend to all. That post also contains these words of caution about instant commentary.

Now of course we get judgments within hours of their being delivered, on all sorts of devices, and commentary is expected within days – sometimes hours.  Personally I am doubtful about the merits of this development.  I still find myself very reluctant to comment on new cases and the like without taking a good few weeks or months to consider what my thoughts on the matter are and make sure I understand before publicly giving a view.  It seems to me that that is what being a professional academic commentator requires.  Instant blogging, tweeting and the like on legal developments is journalism – which has an important place in modern higher education, but it is not academic insight.

I wish I could say the pause between this judgment and this blog post was wholly related to me mulling matters over to ensure my commentary is nearer the academic insight than journalism pole. I confess though that my own delay may have been as much to do with reaching the business end of a teaching semester at Strathclyde and then navigating the winter exam diet. For those desirous of actual journalistic coverage and/or the reaction of relevant interest groups, I can point you to the following resources:

• coverage on STV News (provided by PA Media);
• a news story from SAL;
• a joint press release from SAL and SLE, hosted on SLE’s website;
• a news story from Propertymark;
• a report on Scottish Legal News;
• a legal news item from the Law Society of Scotland; and
• a news item from the Scottish Greens.

Living Rent, the tenants’ union in Scotland, has not put anything on its website at the time of writing. Living Rent did however post on X (Twitter), whilst quoting a tweet from me, the following:

That landlords have failed to challenge the rent cap is great news but make no mistake, when the government introduces permanent rent controls, landlords will stop at nothing to see them overturned.

Some background to the case

The three petitioners – that is, those petitioning the court in the hope of achieving a legal outcome – were the Scottish Association of Landlords, Scottish Land & Estates and Propertymark; the respondents – that is, those seeking to resist the arguments advanced by the petitioners – were the Scottish Ministers. As explained in the first two paragraphs of the opinion, the petitioners argued that the rent and eviction control measures were outwith the legislative competence of the Scottish Parliament, as they disproportionately interfered with their members’ rights under Article 1, Protocol 1 of the European Convention on Human Rights. A1P1 of the ECHR seeks to protect the peaceful enjoyment of possessions, on a qualified basis. A second argument was advanced on the basis of the differential treatment of private landlords as compared to social landlords (i.e. local authorities or registered social landlords, aka housing associations) and also landlords of dedicated student accommodation, in terms of Article 14 of the ECHR. Both social landlords and landlords of student residential tenancies were initially in the rent control scheme but were subsequently removed from the scope of rent controls; such controls remained in the private sector.

Earlier in 2023, I attended the single-day hearing for this judicial review at the Court of Session in Edinburgh. I digested and reflected on proceedings that day in this lengthy blog post. That post explained the background to the dispute, which I won’t rehearse here, and offered some of my thoughts at the time. I wasn’t bold enough to offer a prediction as to what would happen with the case as a whole, although I did suggest that any discrimination angle struck me as optimistic. That was a punt on my part, but I was at least vindicated on that.

Before working my way through Lord Harrower’s opinion, I will explain in simplistic terms what the Cost of Living (Tenant Protection) (Scotland) Act 2022-scheme (which I will now refer to as COLA) does.

As I’ve touched on in a few earlier blog posts (e.g. this post for the Strathclyde Law Blog), COLA introduced a “permitted rate” for rent increases as from 6 September 2022, which currently allows for a headline annual rent increase of 3% of the current rent. The permitted rate is only part of the story though, as a landlord may apply to a rent officer to increase the rent in a PRT by more than the permitted rate, to allow recovery of up to 50% of the increase in any “prescribed property costs” (which would include a hike to the mortgage interest payable in relation to any loan secured over the let property), but this too is subject to a cap of 3% of the current rent. This allows for a total increase of up to 6% of the current rent. Separately, courtesy of COLA’s rules to restrict evictions, a landlord’s attempt to recover possession is subjected to a six month pause, unless certain eviction grounds apply where the landlord is in a particular financial bind or the tenant’s conduct has been so egregious that a six month pause would not be appropriate. COLA also provides a framework for a possible regime relating to the determination of private sector rents in the future. That was touched on in this case and I will similarly touch on that where relevant below.

Lord Harrower’s Opinion

Having set that background out, I now turn to the published judgment. Mind you, following on from the initial explanation at paragraphs [1]-[2], the opinion itself begins with a “Background” section (paragraphs [3]-[5]) of Lord Harrower’s opinion. I won’t say much about his background note, save to acknowledge there is some discussion there about the status of the three petitioners and whether they were suitably placed to bring these proceedings against the respondents. Lord Harrower, with the acquiescence of the respondents, glossed over the fact that the petitioners did not own property themselves (and as such they had no property rights that had been interfered with) and the fact they were not “victims” in a human rights law sense. He did however draw attention to a point that was pressed by the respondents, namely that this was all too abstract and that the petitioners’ status as representative bodies meant that they could not identify suitable factual circumstances which trigger a finding of disproportionate interference with property rights. This would mean they would not reach an applicable threshold to allow a challenge of COLA in relation to devolved competence, with reference to appropriate case law. This is something of an ancillary point to my main interest in the case (that being the A1P1 property and human rights angle), but it is important to set that out and I will return to it below.

Next, Lord Harrower sets out “Relevant Statutory Provisions”, first explaining the private sector tenancies that could be affected by the COLA regime (namely private residential tenancies under the Private Housing (Tenancies) (Scotland) Act 2016 and assured tenancies and short assured tenancies under the Housing (Scotland) Act 1988 which were entered into before the 2016 Act came into force), then explaining the impact of COLA and related regulations. He then summarised the submissions made by both sides of the dispute, starting with the petitioners.

For the petitioners

The petitioners’ submissions begin at paragraph [14]. The opening sentence of this paragraph confirmed that this challenge was indeed a broadside by the petitioners against the entirety of the rent cap and eviction measures, rather than certain aspects of them. This was something of a late-stage realisation for me, and this was despite me attending the hearing at the Court of Session and despite me liking to think I know a bit about the law – all of this seems a tad suboptimal in terms of publicity regarding what exactly is being argued in a court case.

Paragraph [14] then sought to establish why a case could be brought by the petitioners, before the next seven paragraphs (from [15]-[21]) spanning four pages attempted to explain why COLA was indeed in breach of A1P1, in particular as it was a disproportionate interference with a landlord’s property rights. I should acknowledge that the first three paragraphs of this section had me nodding along, at least in general terms, but they also left me with a lingering sense that there was more to the argument than was presented there.

In passing, I will also highlight that the throwaway oral comment that I heard in court from Senior Counsel for the petitioners to the effect that “rent controls never work” were not reflected here or anywhere else in the opinion. Peter Robson and I have recently published a paper in the legal journal the Juridical Review, which tracks what the UK and particularly Scotland has done relative to rent control and security of tenure in the past century or so and tries to draw together some arguments and references regarding rent control. Suffice it to say this is not a simple issue and broad-brush remarks around rent controls never working are not always helpful. Whilst the deployment of this remark was perhaps understandable in the cut and thrust of a courtroom, I’m pleased that the throwaway oral comment was not reflected in the published judgment.

The remainder of the petitioners’ submissions on A1P1 related to a proportionality assessment of COLA, including an argument that there was no emergency justifying this particular measure’s introduction without proper consultation, and then framing any emergency as something that was more to do with energy costs (which could not logically be connected to rent prices). Other points that were set out included what else might have been done by the UK Government and/or Scottish Government that would not have been so intrusive, a consideration of the balance that was struck between tenants and landlords (with reference to landlords who might be in tricky financial situations as compared to tenants who might not be financially vulnerable yet still get to benefit from COLA’s operations), and a final point that the administrative burden to apply for a rent increase based on a prescribed property cost fell on landlords and, given the low potential uplift, it might not even be worthwhile for a landlord to make an application.

To highlight some particular submissions, paragraph [20] concluded by flagging the lack of compensation for landlords in relation to the permanent loss of income or for any loss of capital value caused by COLA’s rent and eviction measures. It was also noted there that COLA lacked clarity in relation to the scope for the alteration or extension of the rent cap over time and the duration of the eviction moratorium. A separate point was also made that the measures were unlikely to be temporary in factual terms, owing to the inevitable shock in rent prices which would result were the measures to expire.  Paragraph [21] set out the argument that COLA’s objective, however legitimate, did not outweigh those impacts, and developed the point that landlords could be financially vulnerable too. I imagine some people might be cynical of that point, but at the very least it is not difficult to imagine a situation of an asset rich but cash poor landlord. This notional situation might be exacerbated where such a landlord’s asset riches were built on mortgage debt if their mortgage product was coming to an end with no equivalent product on the market. The submissions continued that landlords were to bear the entire financial burden of the measures, with no particular procedural safeguards in place to assist financially vulnerable landlords.

The petitioners’ submissions concluded with two paragraphs on Article 14 (regarding discrimination), which I am not going to consider in any great detail here.

For the respondents

Turning to the respondents, the coverage of their submissions began (at paragraph [24]) with discussion around the already mentioned point that this was a challenge to legislation in the abstract, rather than under reference to the particular circumstances of an affected individual. I’ll return to this below. On the A1P1 point, three paragraphs were dedicated to the respondents’ argument that there had been no violation of the right to peaceful enjoyment of possessions, again with a particular focus on proportionality. Paragraph [26] set out the respondents’ position that the petitioners could not clear the required threshold to show a disproportionate impact in a situation of an abstract challenge. It was also pointed out that both the rent cap and the eviction moratorium were temporary, and even whilst in operation neither was absolute (given rents could be increased between tenancies, and eviction could still happen on an ordinary timescale using certain grounds). There was also no bar to a property being sold. Regarding the lack of compensation for affected landlords, case law was highlighted to show this could be a consideration in the matter of whether a fair balance had been achieved, but a lack of compensation was not of itself a violation. Turning to the objective of the legislation, namely providing support and protection to tenants during the cost of living crisis (through stabilising their housing costs and affording them more time to find alternative accommodation in many circumstances where eviction might otherwise be possible), this was sufficiently important to justify the temporary limitation of a protected right. It was also observed that it would be unworkable to try to distinguish between the 40% of tenants who are financially vulnerable with other tenants, and, separately, distinguishing between landlords based on financial vulnerability could have defeated the purpose of the tenant-focussed legislation.

Paragraph [27] addressed the petitioners’ point that COLA lacked clarity in relation to the scope for the alteration or extension of the rent cap over time and the duration of the eviction moratorium, noting that there was no merit in the contention that such matters would deprive the legislation of the quality of law. In this regard, it was stressed that COLA plainly satisfied the legality requirements of the ECHR in relation to accessibility, precision, foreseeability and a lack of arbitrariness as to how a given power might be operated.

These submissions then concluded with a few paragraphs about Article 14 of the ECHR. To cover off this whole discrimination aspect quickly, the fact that Scottish Ministers brought about the expiry of the rent cap for social sector tenancies and student residential tenancies led to an argument that the continued application of the rent cap only to private sector landlords amounted to unjustified discrimination against them contrary to Article 14. (In the context of this litigation, this was curious as the petitioners’ pleaded case was directed solely at whether COLA was within the legislative competence of the Scottish Parliament, but the respondents did not take issue with that). This Article 14 challenge was not successful (see the discussion around paragraph [70]), and nothing further will be said about it here.

Lord Harrower’s ruling

Lord Harrower began the substantive part of his decision by considering the appropriate standard for the intensity of his review here. Given the fact this was seen as a response to an emergency, and that response was both temporary (i.e. not extending beyond March 2024) and provisional (subject to ongoing review, through which proportionality could be considered), the appropriate standard of review was lowered. This meant that at each stage of the proportionality assessment, the reasoning of the legislature was to be afforded significant weight, and any successful challenge would need to show such reasoning and the course of action adopted was manifestly without reasonable foundation.

There was also some discussion in the opinion regarding the status of the petitioners, as representative groups. Whilst the respondents did not make anything of the fact that petitioners did not own property directly or that they lacked “victim” status, they did highlight the petitioners’ status was such that they would be unable to point to any factual circumstances of their own which might give rise to a finding of disproportionate interference with property rights. This would make the petitioners unable to satisfy the threshold test for an ab ante challenge to COLA. By this, they meant an “abstract” challenge without reference to the actual circumstances of any individual case, and the fact that the petitioners could not demonstrate that COLA would give rise to a disproportionate interference with ECHR rights in all or almost all cases (making reference to Christian Institute v Lord Advocate [2017] SC (UKSC) 29 at para 88; In re Abortion Services (Safe Access Zones) (Northern Ireland) Bill [2023] 2 WLR 33 at para 19). This did prove to be important in this case, but (like the discrimination discussion) this is not the focus of the rest of this blog post. I won’t resist the opportunity for a slight tangent though.

There might be some speculation as to why the petitioners decided to front up this case rather than find an ideal private landlord to litigate it – the tactic of supporting a suitably impacted private citizen who may act as the tip of a spear (as one lawyer put it to me in a recent conversation) has been seen with other challenges in the Scottish courts lately (such as the challenge to Glasgow’s LEZ or Edinburgh’s short-term letting measures). Perhaps the petitioners here wanted to show the sector-wide feeling on the matter, either in relation to the COLA regime or indeed any future long-term rent control measures, and as such they pushed the matter directly. Separately, there may be another discussion as to whether courts should be picky in such circumstances when a genuine point of law comes before it (and these arguments could be run in both directions here). Meanwhile, I confess the significance of the interest groups’ involvement initially only struck me as important owing to removing the chance to properly stress-test the evidence gathered in surveys of landlord members and the like that were presented to the court. It was only when I started to digest Lord Harrower’s judgment that this other legal issue really landed with me.

Turning now to the A1P1 discussion, the respondents had always accepted that COLA interfered with the petitioners’ landlord-members’ possessions (namely each let property and the ability to derive income from it). The issue was then whether that interference was disproportionate, which fell to be measured by the four-stage test parties agreed was applicable (drawing on Bank Mellat (No 2) [2013] UKSC 39, at paragraph [74]), namely by considering:

1. whether the objective was sufficiently important to justify the limitation of a protected right;
2. whether the measure was rationally connected to the objective;
3. whether a less intrusive measure could have been used without unacceptably compromising the achievement of the objective; and
4. whether the severity of the measure’s effects on the rights of those to whom it applied outweighed the importance of the objective.

COLA made it through this exercise. Various observations had been put forward (e.g. that it was really about the energy crisis rather than the challenges facing tenants, which would be relevant to point (2)). On point (3), potential deployment of other options (including existing rent pressure zones) had been considered and not adopted by the Scottish Ministers, as was providing any further support over and above UK Government cost of living payments. Lord Harrower then noted (at paragraph [55], “Having regard to the legislature’s discretionary area of judgment in socio-economic matters, this court has not been provided with any basis on which to judge that a less intrusive measure could have been used without unacceptably compromising achievement of the legislature’s objectives.”

Then came what was called the “crux” (paragraph [56]) of the petitioners’ challenge, about whether there was a fair balance.

Absence of compensation was mentioned (which would have been particularly relevant had this been classed as a deprivation in A1P1 terms), as was rent control case law from Strasbourg including Hutten-Czapka v Poland (2007) 45 EHRR 4. Lord Harrower noted (at paragraph [58]) that any analysis of such things ought to be on a case by case basis rather than an ab ante challenge, plus also noted that there was a chance to recover maintenance costs under COLA (this by way of any existing rent, plus any allowable increase).

There was discussion about it being a broad-brush approach (regardless of tenant or indeed landlord means). This in part focussed on the Government’s approach to who was “financially vulnerable”, but it was noted for the Government that this was but one aspect that was considered, plus that this should not be an “either/or” measure anyway. There was also the fact that some consultees (including the First-tier Tribunal, who would need to implement any scheme when disputes came to a head) did not want a discretionary approach.

A third complaint raised by the petitioners was that the burden of achieving COLA’s objectives fell solely on landlords. This was countered by the existence of financial assistance provided by the Scottish Government through discretionary housing payments and the Tenant Grant Fund.

Another point related to apparent absence of procedural safeguards. Lord Harrower noted that rent may still be increased between tenancies without restriction, and (in terms of the eviction moratorium) it was temporary yet also still permitted on certain grounds (including on new grounds based on the landlords’ financial circumstances), plus COLA does not prevent property from being sold (with a sitting tenant or with vacant possession following a competent eviction).

A final point related to uncertainty of duration or parameters in terms of possible future rent controls (i.e. the potential implementation of controls for up to a year), but Lord Harrower felt this aspect of the challenge was premature (we know it can only last for a further year in terms of section 11 of COLA, and within that year rent will be determinable, albeit by a methodology we do not know yet).

As such, having regard to the petitioners’ challenge as a whole, Lord Harrower held that they fell “far short of what is required in order ab ante to demonstrate that the Act disproportionately interferes with the A1P1 rights of landlords” (paragraph [65]).

I understand there is to be no reclaiming motion (appeal) of this decision. The judgment will accordingly stand, as will COLA (until its appointed expiry).

Conclusion

Let me try to wrap this up. What lessons can we learn from this case? It maybe does not tell us much new about A1P1 of the ECHR, other than to provide another example of a non-violation and in turn an example of Holyrood legislation not being struck down. It also shows temporary legislation might get an easier ride than longer-term measures, so in that sense it might not be a direct precedent for any future open-ended rent regulation. Finally, it does highlight how difficult it is for an interest group to challenge legislation on ECHR grounds, which might inform any future litigation should rent controls be introduced.

I may try to write this up into some kind of published case comment. With that in mind, I will leave this rather rambling blog post without any fixed conclusions at that. If you have any thoughts of your own though, please do comment below, and I will try to reply to any comments either here or in such a future article.

An analysis of case law under Part 2 of the Land Reform (Scotland) Act 2003: an unfortunate trend for community bodies?

Earlier this year, Community Land Scotland contacted me to do a wee bit of work for them. They had formed a perception that communities making use of the community right to buy found in Part 2 of the Land Reform (Scotland) Act 2003 tended to become unstuck if they ever found themselves in court. I was approached to review the case law regarding this and, sure enough, every time a community project was challenged by a land owner or, on the other hand, a community sought to challenge a Ministerial decision not to allow a project to proceed, the community “lost”.

My paper which sets this out in more detail has now been published online through the University of Strathclyde’s academic repository.

Relatedly, I have penned a blog post for the Strathclyde Law Blog.

This WordPress post is simply me drawing this all together for a basedrones audience. No further chat will be offered here accordingly.

The joint tenancy trap – ending PRT flat sharing arrangements, and rent increase implications

On 9 October 2023, an episode of BBC Scotland’s Disclosure aired on BBC One Scotland and also became available on the iPlayer, entitled The Rent Trap. A related BBC online news story appeared a little before that.

The programme as a whole is about the housing crisis and the “rent trap”. This blog post is about one recurring issue for private renters in a flat sharing arrangement that featured in the programme. The issue arises when one of their number wishes to leave the let property but the remaining tenant(s) wishes to stay. I’ll come to the legal considerations around that later. A scene-set would probably be helpful though, to explain why this is a particular issue now, and also to explain how this plays out in the context of the emergency “Cost of Living” legislation that is designed to protect tenants from chunky rent increases.

Parts of Scotland – like other parts of the UK – rely on private renting as part of the housing mix. In this residential tenancy arrangement, private individuals rent a dwelling from another private individual or perhaps a commercial entity, with or without a letting agent helping to administer the arrangement. Private lets offer homes to those who cannot afford to become an owner-occupier themselves (owing to a lack of affordable housing), those who cannot access social housing (aka council housing, or renting from a housing association), or indeed those who actively choose to rent privately. I won’t explore the complex reasons why private renting represents such an important part of the housing mix in parts of Scotland (notably in Edinburgh and Glasgow, but also in other hotspots like St Andrews), let’s just take that as a given.

Since January 1989 (when the Housing Act 1988 and the Housing (Scotland) Act 1988 came into force), the price of private lets in the UK has largely been left to the market. Scotland introduced a new private letting vehicle in December 2017 – called the “private residential tenancy” (or “PRT”). Again, the price of a PRT – at least at its outset – is a matter for the market and the relative bargaining positions of landlord and tenant.

The Cost of Living (Tenant Protection) (Scotland) Act 2022 – which I will refer to as COLA – introduced a degree of rent regulation for anyone with a tenancy in Scotland. It initially applied in both the social and private sectors, but is now focussed on the private sector. I’ve written about it on this blog and elsewhere (such as this post for the Strathclyde Law Blog) already so I don’t want to get distracted by the niceties of how it works in this post. Suffice it to say that the 2022 Act and related regulations prevent private rents in an existing tenancy going up by more than 6% in any 12 month period, and even then half of any 6% rent hike would need to be linked to any eligible and provable increase in the landlord’s costs.

COLA does not apply to new tenancies. This is a feature, not a bug: it is designed to ease the cost-of-living burden for existing tenants rather than new tenants. This is something we will come back to.

In general terms, rents have been increasing across the whole of the UK. Scotland has its Tenant Protection regime though – doesn’t that help to dampen Scottish prices? Apparently not. The Office for National Statistics’ Index of Private Housing Rental Prices, UK: August 2023 – which describes itself as “An experimental price index tracking the prices paid for renting property from private landlords in the UK” – noted that private rental prices in Scotland increased by 6% in the 12 months to August 2023. This is higher than the rate that is reported for England – 5.4% – despite England not having equivalent rules to protect tenants. How can this be?

I’ll offer a word on the data. First, there are various disclaimers listed alongside the information, including that the Index of Private Housing Rental Prices’ stock measure is substantially below that of HomeLet, a company that provides services to letting agents, landlords and tenants. According to HomeLet’s figures from that point, the annual inflation for new tenancies in Scotland was 14.4% in the 12 months to August 2023. (At the time of writing, HomeLet’s website reports that has slipped slightly to 13.34%.) A second disclaimer about the ONS index is that only a small proportion of the data collected are based on updated rental data from existing lets, with any new data predominantly being based on newly advertised rents (which, as noted above, are not subject to the COLA rent cap). I have also heard some people vocalise slight scepticism about the methodology that is used to create such average figures, notably because it is easier to capture the prices of new lets to the market as opposed to longer-term lets where there is no need to report the monthly rent.

Be that as it may, these are the data that we have. Given these figures, it seems fair to say that rent increases are happening at rates beyond what COLA would allow. Clearly this is happening when there is a new tenancy. But what is a new tenancy? Here we enter the world of what has been called the “joint tenancy loophole”.

The legislation that introduced the PRT to Scotland – the Private Housing (Tenancies) (Scotland) Act 2016 – recognised the possibility of more than one person sharing in a tenancy. These co-tenants – normally referred to as joint tenants – each have a share in the lease. When you have such an arrangement, it is important to know what each co-tenant is entitled to do individually and also what they need to do as a polity. The 2016 Act is drafted in a way that prevents one co-tenant from torpedoing a tenancy when they leave. All tenants must agree if they want to instigate the process that brings their PRT to an end. Again, this is a feature, not a bug. The rule has a sensible enough rationale. It has caused some issues though, particularly now owing to its interaction with COLA.

The first time this issue appeared on my radar was when my then colleague Douglas Bain and then student Mitchell Skilling penned a blog post for the School of Law at the University of Aberdeen in September 2018. (I was the curator of that blog at the time.) Their blog post was entitled “Choose your friends wisely, choose your co-tenants very carefully: joint tenants and the private residential tenancy“. I also know of marooned co-tenants seeking advice from student law clinics, where one co-tenant has upped and left for whatever reason and the remaining tenant(s) then has to meet costs that had previously met by someone else if they wish to maintain the tenancy, or the alternative situation of someone seeking to escape who has been forced to contribute to servicing a tenancy; even where they have left the let property.

Then COLA came along, which as we know only applies to existing tenancies. An existing co-tenancy arrangement is subject to its rent cap, but if one co-tenant leaves the remaining co-tenant(s) either has to service the whole rent payment or, alternatively, find a way to get someone else to share the burden. The thing is, a landlord can’t be shanghaied into accepting just anyone as a tenant. They can legitimately refuse to allow an assignation (transfer) of an outgoing co-tenant’s interest in the tenancy in many circumstances. To allow for a new co-tenant to come in might accordingly need a brand new lease and, you guessed it, that allows the landlord to set a new price.

I almost didn’t blog about this as I didn’t want to draw attention to the issue. It has however been noted on the Scottish Government’s website that where a co-tenant moves out but the other co-tenant(s) wishes to stay, any future arrangement to cater for this may be classified as a new tenancy. Living Rent – the tenants’ union in Scotland – also has some information about it on its website, and it seems fair to imagine that if they had found a workaround to this knotty issue they would be crowing about it. I can’t think of a workaround either – this is how section 78(3) of the 2016 Act works in the scheme of the legislation.

So what should happen? This co-tenancy problem has been on the Scottish Government’s radar anyway. They considered the matter in their New Deal for Tenants, suggesting a scheme whereby a joint tenant could bring the whole tenancy to an end with two months’ notice. Such a manoeuvre would certainly stop people getting stuck in a legal relationship they want out of, albeit it would place a PRT on a shooglier peg than the one it currently occupies. Either way, this would not help those facing the current joint tenancy “loophole”. Another way that the current joint tenancy “loophole” could indirectly be addressed, at least as far as landlords seizing a co-tenant leaving as an opportunity to raise the rent, is linking rent control to a let property rather than a current tenancy. We’ve had that in the UK before and indeed such controls can still be encountered where someone has a lease that was entered into before January 1989, and we might be moving to such a regime again given the steer in the most recent Programme for Government.

None of this will help co-tenants in a bind at the moment though. With COLA’s rent controls due to end in March 2024, one suspects there won’t be a legislative fix for this particular issue. Accordingly, this episode might need to be chalked down to experience. Mind you, if anyone does have any bright ideas as to whether anything can be done just now, please do comment below.

A screen capture of the relevant iPlayer page, captured on 10 October.