Fair rents bill published

Following a public consultation last year, Scottish Labour MSP Pauline McNeill has published a Members’ Bill in the Scottish Parliament to place a blanket restriction on mid-tenancy rent increases for Private Residential Tenancies (PRTs). The bill wording can be read here.

The bill proposes that:

• landlords of PRTs can only increase the rent by CPI + 1% each year
• tenants who feel their rent is too high can apply to the rent officer for a determination of a fair open market rent, they can do this at any time during a tenancy but no more frequently than 12 monthly
• landlords are required to provide information on the rent they charge when applying to register/renew their landlord registration, this is to develop better data on rent levels.

The bill does not propose introducing any restriction on the amount a landlord increases rent by, between tenancies.

SAL’s principal concern about the bill is that it will act as a disincentive to landlords considering reducing the rent below the open market level in order to attract new tenants or help existing tenants who are in financial difficulty, something that many members have been doing to help their tenants during the coronavirus crisis. This is because the cap on increases of CPI + 1% would prevent a landlord increasing the rent back up to the open market rental value during the tenancy.

Please email us with your thoughts on what is being proposed and the impact it might have on your rental business.

A Members’ Bill follows a 3-stage scrutiny process, during which it may be amended or rejected outright. If it is passed at the end of the process, it becomes an Act. The wording of the Bill sets out an expectation that, if approved by MSPs, it will come into force by May 2021. However, this might not be achievable as the timescale from publication of a Bill to any resultant legislation coming into force in Scotland is normally at least two years.

We will keep members informed as usual of this situation as it develops and once again SAL will focus our efforts on fighting unfair legislation which we believe would damage our sector.