Fair Rents (Scotland) Bill

Closes 7 Dec 2020

Opened 12 Oct 2020

Overview

The Local Government and Communities Committee wants your views on a new Bill about private rented housing. The deadline is 7 December 2020.

Background

The Fair Rents (Scotland) Bill is a Member’s Bill introduced by Pauline McNeill MSP on 1 June 2020. A Member’s Bill is introduced by an individual MSP, not the Scottish Government. You can read the Bill and accompanying documents here.

The Bill aims to increase private tenants’ protection by limiting rent increases and to make private landlords enter the rents they charge in a public register to improve data on rent levels.  

Private rented housing

The proportion of households that are in private rented housing increased in 1999-2016 from 5% to 15%. It has stabilised since then at around 340,000 – about 14% of all Scottish households.

In recognition of the growing importance of the private rented sector in Scotland, there have been various reforms to tighten regulation. For instance, anyone wishing to rent out domestic property must apply to go on the Scottish Landlord Register and will be excluded if they are not a “fit and proper person”. And all tenancy deposits must now be placed in a government-backed scheme. 

In 2016, the Private Housing (Tenancies) (Scotland) Act was introduced. The 2016 Act introduced a new type of tenancy; the “private residential tenancy” which gives tenants additional legal protections. These include new rules on rent. The landlord can only increase rent once a year and must give three months’ notice. The tenant may also appeal an increase to a Rent Officer – a public employee working for Rent Services Scotland – and, ultimately, to the First-tier Tribunal for Scotland (Housing and Property Chamber). The Tribunal is a judicial body set up to decide on private landlord-tenant disputes.The case will be decided by reference to what the Officer or Tribunal determines is the “open market rent” for the property, and they have the power to increase as well as decrease the rent.

The 2016 Act also allows councils to apply to the Scottish Government to have an area declared a “rent pressure zone” for an area where rent increases are particularly marked and are causing housing problems. If granted, the council can impose a cap on rent increases on existing private residential tenancies in the area. There are not yet any rent pressure zones.

What the Bill aims to do

The Member in charge considers that more legal changes are needed to make private rents fairer and to create a better balance of power between landlords and tenants. She also wants to increase the amount of public data about rent levels. In pursuit of this, the Bill makes three main changes—

  • Section 1 prevents a landlord in a private residential tenancy from increasing rent in any year by more than the Consumer Price Index plus 1%. (This is the same as the minimum cap that could be imposed in a rent pressure zone.) There is a power in the Bill to modify the 1% amount up or down. The CPI is a measurement of changes in the price of a “basket” of goods and services and is used to calculate inflation.
     
  • Section 2 allows a tenant in a private residential tenancy to apply at any time to a Rent Officer for a ‘fair open market rent’ set for the property. The tenant may appeal a determination to the Tribunal. The Bill sets out criteria for determining a “fair open market rent”. This is based partly on the criteria for determining an “open market rent” under the 2016 Act but includes a list of further matters to which “paramount consideration” should be given in determining whether to reduce the rent. These include matters such as poor energy efficiency, inadequate internal décor and furniture, etc.
     
  • Section 3 requires landlords to enter additional information in the Scottish Landlord Register when they join the Register or re-register on it. (A landlord must re-register every three years.) As well as providing information about property they rent out (or wish to be able to rent), and any agent for the property, they would also have to state “the monthly rent charged, the number of occupiers, and the number of bedrooms and living apartments”. 
     
  • Finally, at section 4, the Bill places a duty on the Scottish Government to report on the impact of section 1 of the Bill on the affordability of rents for tenants and on the operation of section 2.

Next Steps

The call for views closes on 7 December.

Between now and the election next Spring, the Committee and the Parliament expect to have a very full work schedule, especially taking account of the ongoing impact of Covid-19.

Any proposal for new laws requires very careful consideration and there is a possibility the Bill might fall when the election is called. The Committee undertakes to consider carefully all  written submissions received on the Bill and to decide on next steps by early in the New Year.

Your Views

The Committee wants to hear what you think about the Bill. You can answer as many of the questions as you want. Please give reasons for your answers where possible, bearing in mind that it might be possible to make some changes to the Bill as it goes through the Scottish Parliament.

The Covid-19 crisis has massively impacted on every area of life, including housing. It’s relevant to take the current situation into account in expressing views. However, the Committee is also looking ahead to a point when the virus is hopefully contained. We want to know whether the Bill will be good for the long term.

  1. The Member in Charge thinks there is a need to make private rents fairer for tenants and to create a better balance of power between private landlords and tenants. Do you agree with this overall policy aim? If so, do you think the Bill will help achieve this outcome?
     
  2. Section 1 of the Bill it prevents a landlord of a private residential tenancy from increasing rent in any year by more than the Consumer Price Index plus 1%? Do you agree with this? Section 1 also gives the Scottish Government a power to vary the cap by order. Do you agree with this?
     
  3. Section 2 allows a tenant in a private residential tenancy to apply to have a “fair open market rent” determined by a Rent Officer. Do you agree with section 2?

In any answer to question 3, the Committee also welcomes your views on—

  1. The right set out in section 2 to appeal a Rent Officer’s determination to the First-tier Tribunal
     
  2. The matters set out in section 2 that must be taken into account in determining what is a “fair open market rent”
     
    1. Section 3 requires the following to be entered into the Scottish Landlord Register: the monthly rent charged for a property, the number of occupiers, and the number of bedrooms and living apartments. The MSP who introduced the Bill thinks this change will help ensure we have more public data about private rent levels. Do you agree with section 3?
       
    2. What financial impact do you think the Bill will have – on private tenants, on landlords in the private rented sector, on local authorities, on Rent Services Scotland, on the First-tier Tribunal, or on anyone else.
       
    3. We welcome any other comments you may have on the Bill that you think are relevant and important, including its likely impact (positive or negative) on equalities, human rights and quality of life issues.

How to submit your views

Please submit you views using the online submission form, linked to below.

We welcome written views in English, Gaelic, Scots or any other language. 

The call for views closes on 7 December.

Interests

  • Local Government