Section 2 – the first substantive provision of the bill (with section 1 doing the microbiological needful and defining what is meant by “coronavirus”) – deals with “Eviction from dwelling-houses”, providing that “Schedule 1 contains temporary modifications to the law in relation to the eviction of private sector tenants and social tenants from dwelling-houses.”
Given the focus on private sector residential lets in particular in recent days (as explained in my earlier post for the Strathclyde Law Blog), it is not a surprise this is front and centre. The provision (coupled with Schedule 1) also extends to the social sector. This post will concentrate on the private sector.
Schedule 1 sets out modifications for the three private letting regimes that still exist in Scotland, the governing regimes being: the very rare Rent (Scotland) Act 1984 (there have been no new tenancies under this since 1 January 1989); the relatively rare Housing (Scotland) Act 1988 (there have been no new assured or short assured tenancies since 30 November 2017); and the now dominant private residential tenancy. PRTs have been the sole private letting vehicle since 1 December 2017, and accordingly form the main focus of this post.
PRTs are governed by the Private Housing (Tenancies) (Scotland) Act 2016. The Coronavirus Bill modifies section 51 of this legislation, such that it removes any chance for the First-tier Tribunal for Scotland (Housing and Property Chamber) (the FTT) to evict someone on a mandatory basis.
As noted in my earlier post, for a landlord to recover possession from a tenant legally the landlord must have an order from the FTT. The FTT will only make an order if the landlord establishes the existence of one or more of eighteen possible eviction grounds. To explain further, in non-COVID-19 times there are two levels of private rented sector eviction ground: a mandatory eviction ground, which the FTT must grant if it is made out by the landlord; and a discretionary eviction ground, which the FTT may grant if it is made out, if the FTT thinks it is reasonable to do so.
The Coronavirus Bill will make all evictions that would have been mandatory (for example, owing to criminal conduct by the tenant, or the landlord wishing to sell or refurbish the property) subject to a reasonableness test. What was once shrouded in imperative language is now cloaked in discretion.
Of course, the FTT is not sitting at the moment, which means neither tenants nor landlords can get to it for any matters, be they eviction-related or otherwise, but when it sits again these rules will be relevant for that which comes before it.
Returning to the Coronavirus Bill, another thing it will do is extend the period for “notices to leave” in most circumstances, this period being something that a landlord must normally allow to run before raising proceedings at the FTT to recover possession. Subject to the FTT waiving compliance with this period in exceptional circumstances, a landlord would ordinarily need to wait 84 days or, in some specific situations, a shorter period of 28 days.
There are now three possible periods a landlord must wait out: 28 days; three months; or six months.
Whilst there is theoretically a short period of 28 days, it is now pretty much oot the windae. The only previously turbo ground that has been spared any particular change is the ground about the tenant not occupying the property, with this still needing 28 days. In fact, this ground has actually been facilitated, by saying that the period is 28 days in ALL circumstances, whereas in non-COVID-19 times you would only be able to access this shorter period in the first six months of a tenant’s occupation. Given the circumstances of the outbreak, this has to make sense, as a tenant in these circumstances warrants no particular protection (and in fact is denying someone else what could be a socially isolated home).
The grounds that could previously be dealt with in a shorter period now must wait for an extended time period. For information, in non-COVID-19 times these shorter period grounds were: 1. tenant in rent arrears for three or more consecutive months; 2. tenant in breach of a non-rent obligation; 3. tenant has a relevant conviction; 4. tenant has engaged in relevant anti-social behaviour; or 5. tenant associates in the let property with a person who has a relevant conviction or has engaged in relevant anti-social behaviour.
Please note that it is not actually the case that these previously short period grounds have simply migrated to the new intermediate time period. Instead, that three month period only applies in relation to seven grounds, namely: 1. the landlord or 2. a member of the landlord’s family intends to live in the let property; 3. the tenant has a relevant conviction; 4. the tenant has engaged in relevant anti-social behaviour; 5. the tenant associates in the let property with a person who has a relevant conviction or has engaged in relevant anti-social behaviour; 6. the landlord is not registered by the relevant local authority as a private landlord; or 7. the let property or associated living accommodation is in multiple occupation and not appropriately licensed.
Anything else needs six months. Accordingly, a tenant in rent arrears or in breach of another obligation of the lease should be afforded six months before being evicted. For information, it can be noted that the underlying rent arrears ground for eviction is still that “the tenant has been in rent arrears for three or more consecutive months”, it is just that the landlord has to wait six months to get this before the FTT (when it is sitting).
That deals with PRTs. Similar changes are made in relation to assured tenancies and protected tenancies under the 1988 Act and 1984 Act respectively. At this point, I should really tip my hat the various draftspeople who have slogged away at this. There was a heck of a lot to get through just in relation to the private rented sector, and they have addressed so much more than that. Quite an effort, really.
Here’s a thought though, and it represents something that was said to me in response to my last blog post which can essentially be boiled down as follows: won’t somebody think of the landlords?
I suspect many readers of this post won’t feel instant sympathy for landlords, but – as Lord Hope reminded us in his judgment in Salvesen v Riddell – landlords have rights too. There will be some landlords who could find themselves in a sticky situation if the mortgage holidays that secured lenders have been talking about do not fully emerge. Furthermore, existing rules about the enforcement of standard securities (i.e. mortgages, in terms of the Conveyancing and Feudal Reform (Scotland) Act 1970) do afford some protection to residential debtors (owing to reforms made by the Home Owner and Debtor Protection (Scotland) Act 2010), but these do not extend to non-resident landlords. Rapacious landlords might be in the line of sights of some people, but it might be that secured lenders also need to be considered. This is definitely something to monitor.
Moving away from the rented sector but staying in the housing market, as noted there are no changes to the protections of residents who could be facing mortgage debt issues (save of course the strange new protection of civil justice grinding to a halt). There are however some changes in relation to bankruptcy legislation that might help home owners who are faced with non-mortgage-related debt enforcement action.
What else does the Coronavirus Bill do? An awful lot indeed. I see it proposes something not at all controversial about jury trials. Hmm.
I’ll conclude with a much more controversial point: in a Scots law context I tend to spell “dwellinghouse” as a compound word, but the Coronavirus Bill uses a hyphen. Crazy times indeed.