Rent cap: private landlord guidance

Summary

The Cost of Living (Tenant Protection) (Scotland) Act 2022 (“the Act”) is in response to the emergency situation caused by the impact of the cost crisis on those living in the rented sector in Scotland. This Act introduces a temporary cap on in-tenancy rent increases for the majority of tenancies, a temporary moratorium on evictions, increased damages for unlawful evictions, until at least 31 March 2023,  and additional powers to temporarily reform rent adjudication in connection with the expiry of the rent freeze.

Whilst the measures in the Act can be extended beyond the 31 March 2023, any decision to continue them beyond that date will consider the cost of living situation as it develops and will be informed by engagement with tenants, landlords and other stakeholders.

For the period the measures are in force, landlords will not be able to increase rents for most existing tenancies, other than in line with the cap (if it is raised above 0%). The measures do not restrict rent changes between tenancies.

The over-arching aims of the Act are:

• protect tenants by stabilising their housing costs;
• where possible, during the cost crisis, reduce impacts on the health and wellbeing of tenants caused by being evicted and/or being made homeless by giving them more time to find alternative accommodation; and
• seek to avoid tenants being evicted from the rented sector by a landlord wanting to raise rents between tenancies during the temporary measures and reduce unlawful evictions, through the complementary measures of a moratorium on evictions and raising the level of damages that may be awarded.

In terms of the Rent Cap:

• The rent cap will initially be set at 0% and is expected to remain until at least 31 March 2023. The Act includes a duty for the Scottish Ministers to review the measures regularly to check that it is still necessary to keep them in place. [1]
• The level of the cap is subject to review[2] and the Scottish Ministers can vary the rate of the rent cap or remove it.
• The rent cap will apply to the majority of in-tenancy rent increases. Landlords will still be able to reset rents between tenancies.
• Safeguards have been built in to the rent cap measures to balance the rights of landlords and tenants in the context of the costs crisis.
• For the majority of tenancies, any rent increase notice served by a landlord on or after 6 September 2022 (the day on which the Programme for Government was announced by the First Minister) whilst the rent cap is at zero will have no effect (as they will not be valid).

Tenancy types covered by the rent cap

The rent cap applies to the majority of assured and short assured tenancies under the Housing Scotland Act 1988, Scottish secure and short Scottish secure tenancies under the Housing (Scotland) Act 2001 and private residential tenancies under the Private Housing (Tenancies) (Scotland) Act 2016.

The rent cap does not apply to:

• Existing tenancies under the Rent (Scotland) Act 1984.
• Housing Scotland Act 1988 - Assured Tenancies where rent increases are governed by contractual terms and the tenancy is still legally in force.
• Common Law tenancies - Tenancies that are not covered by statutory requirements on rent increases within housing legislation, with the exception of student tenancies.

The rent cap measure is complemented by a temporary moratorium on evictions (which seeks to avoid tenants being evicted by a landlord wanting to raise rents between tenancies during the temporary measures); and also by measures to reduce unlawful evictions by raising the level of damages which may be awarded. See here for more details.