Chamber and committees

Indeed. The proposal will not only close a gap between the social and private rented sectors—by making provision that is permanent in the social rented sector permanent in the private rented sector—but will normalise what, as it made clear in its evidence, the Scottish Association of Landlords considers to be best practice. That is consistent with the general direction of travel; we are looking to close the gap in outcomes generally between the public and private rented sectors, so that outcomes do not depend on where people rent, and we want to raise standards across the board. The measure has received support across the board because it is clear that it will achieve that objective.

Good morning. I am grateful for the opportunity to say a few words about the tenancy provisions in the bill.

I thank everyone—individuals and organisations—who engaged in the consultation process, which helped to inform the development of the bill, or who provided comments in response to the committee’s call for evidence.

Before I turn to the detail of the tenancy provisions, I will give a general overview of the bill. The Scottish Government’s priorities are to continue to lead Scotland safely through and out of the Covid pandemic and to address the inequalities that have been made worse by Covid, progressing towards a wellbeing economy and accelerating inclusive person-centred public services.

As part of the process of learning lessons from the pandemic, the Government is committed to reviewing the impact of Covid on the Scottish statute book. The bill extends to around 30 different topics, most of which are being scrutinised by the COVID-19 Recovery Committee or other subject committees.

I turn to the tenancy provisions in particular. Part 4 relates to eviction from properties in the private rented sector. The effects of the coronavirus pandemic have undoubtedly led to a reduction in income for many households across Scotland. We already know that some of our most financially vulnerable citizens live in the private rented sector, and the impacts of the pandemic—immediately and in the longer term—mean that some private tenants are finding themselves in significant financial difficulty.

In recognition of that, the two emergency coronavirus acts—the Coronavirus (Scotland) Act 2020 and the Coronavirus (Scotland) (No 2) Act 2020—introduced a number of key provisions to protect tenants, and we are now seeking to introduce two of those on a permanent basis, because they have improved fairness in the system and better balanced the needs of tenants and landlords, and they explicitly give tenants support when it is most needed. The first concerns the private landlord pre-action protocol in relation to evictions on the grounds of rent arrears, while the second is to ensure that all eviction cases that go before the housing and property chamber of the First-tier Tribunal are considered on a discretionary basis, when previously some eviction grounds would have resulted in a mandatory eviction order being issued.

I will address the pre-action protocol provisions first. They formalise the steps that a private landlord should take as early as possible to support a tenant who has fallen into rent arrears. That aims to ensure that all steps have been taken to sustain a tenancy before the landlord takes action to evict.

The protocol sets out three key areas of action a landlord should take to support a tenant in rent arrears. The first action is for landlords to give tenants clear information relating to their rights in relation to eviction, how they can access information on financial support and debt management and an overview of their tenancy agreement; the second action is for landlords to make reasonable efforts to agree with the tenant a reasonable repayment; and the third action is for the landlord to give reasonable consideration to the steps that the tenant has taken. The tribunal must take into account the landlord’s compliance with the pre-action protocol when deciding whether to issue an eviction order.

Pre-action protocols have been in place in the social rented sector in Scotland for a number of years. Therefore, making the provision permanent for the private rented sector is an important step towards ensuring that there is a parity of rights across the rental sector in Scotland.

During the consultation on the bill, some private landlords and their representative bodies advised that they already take such action to support a tenant who has fallen into rent arrears. Therefore, the provision formalises what is already seen to be best practice by professional landlords within the private rented sector.

The second provision that we are seeking to make permanent is one to ensure that, in all cases that go before the First-tier Tribunal, eviction is ordered only where it is reasonable to do so. All eviction grounds would, therefore, become discretionary. Prior to the emergency legislation being introduced, if eviction was sought on certain grounds—such as the person being three or more consecutive months in rent arrears—the tribunal was obliged to issue an eviction order.

By ensuring that every ground for eviction is discretionary, we ensure that the tribunal is able to consider all relevant factors in eviction cases and determine whether eviction is reasonable. That would include consideration of whether a private landlord has undertaken all the steps that they should have taken as part of the pre-action protocol stage, or of any proactive steps that a tenant might be taking to reduce rent arrears. Again, it is worth highlighting that similar provisions have been in place in the social sector for many years.

I am aware from the responses that were received during the 12-week consultation period for the bill, and the responses that the committee received to its call for evidence, that diverging views exist on the tenancy provisions that we are seeking to make permanent. Tribunal discretion, in particular, is seen by some private landlords to create an unfair balance of rights between tenant and landlord. Private landlords argue that that provision will drive up costs, increase risk and dent investor confidence.

It is important to note that the tenancy provisions do not prevent a private landlord from seeking to recover possession of their property. Instead, the provisions introduce additional layers of protection to ensure that all avenues have been exhausted in sustaining a tenancy and that the eviction itself is reasonable, given the individual circumstances of the case. The fact that the tribunal has discretion allows it to take into account all the circumstances of the tenant and the landlord in order to come to a fair and appropriate conclusion.

Conversely, tenant representative groups have strongly welcomed our intention to introduce a private landlord pre-action protocol and tribunal discretion on a permanent basis. You will be aware that organisations such as Shelter Scotland, Citizens Advice Scotland, Living Rent, Public Health Scotland and Police Scotland support the move. They highlight that the negative financial impacts of Covid are on-going and that the tenancy provisions will help to deliver a recovery from the impacts of the pandemic. Indeed, Shelter Scotland specifically states that the tribunal discretion provisions will disproportionately impact people on lower incomes for the better and help to deliver a wellbeing economy.

Part 4 of the bill supports the Scottish Government’s Covid recovery strategy and its overall objective of addressing harms that have been caused by the pandemic and tackling systematic inequalities that have been made worse by the pandemic. It also supports the Scottish Government’s draft rented sector strategy, which, as you will be aware, we are currently consulting on. That aims to deliver a new deal for tenants, giving them more secure, stable and affordable tenancies, with improved standards of accommodation, new controls on rent and more flexibility to personalise homes. We have already committed to introducing a new housing bill in the second year of this parliamentary session in order to deliver on some of the legislative commitments that are contained in the strategy.

As I set out at the beginning of my statement, many of the people who live in the private rented sector are among the most financially vulnerable people in our society. In particular, that applies to people who have an income but are still living in poverty due to the longer-term impacts of the pandemic, coupled with ever-increasing living costs. I think that we are all painfully aware that that situation might continue to be exacerbated.

Making the tenancy provisions permanent will, therefore, provide an important extra layer of security for such households, as well as helping to ensure a parity of rights for renters, no matter whether they are in the private sector or the social rented sector. I also emphasise that the provisions will still enable landlords to recover possession of their property in circumstances in which a tenancy is genuinely unsustainable.

Yes. The grant fund is focused on helping tenants who are struggling financially. It is fair to say that, given the current circumstances, which apply more widely than to the operation of the private rented sector, we are all very conscious that the cost of living crisis is already severe and might continue to be exacerbated. Some of the actions that we can consider will go beyond my brief. I know that the Cabinet Secretary for Social Justice, Housing and Local Government wrote to councils in December—she followed up with them last week to reiterate it—to say that payments from the tenant hardship grant fund should be made to those who are in most financial need and who face the risk of homelessness, in particular people in the private rented sector who may be at risk of eviction. People in the social rented sector whose incomes were already low and have been hit hard by the pandemic can also get help through the scheme.

Under the pre-action protocol, landlords should make tenants who are at risk of losing their home as a result of rent arrears aware of all the forms of financial support that are available, and not just the tenant grant fund.

There will continue to be on-going debate across Parliament, and there will be discussions across a number of portfolios in Government, to ensure that we take the most ambitious approach that we can to supporting people through the cost of living crisis. That will apply to ministers who have a housing brief, but it will certainly go beyond that.

Most fundamentally, and to put it at the simplest level, that will allow the tribunal to consider all circumstances relating to the landlord and the tenant. If tribunal discretion is made permanent—if the committee agrees with our proposal—landlords will still be able to pursue eviction when they believe that it is necessary. The proposal will not fundamentally end or curtail the rights of landlords. However, being able to take into account individual circumstances, which include, but are not limited to, those that have been caused by the pandemic, will provide a far fairer balance of rights for everybody involved.

In the committee’s earlier evidence session, the example was given of a private tenant who had to be moved in order to escape an abusive or violent situation at home and faced additional costs because of the price of the property that they were moved into. Such circumstances need to be taken into account and understood. There will be other such circumstances that members from all parts of the country will recognise from their constituency and regional work. For example, in a rural area, there might be very little alternative housing available. Even if a landlord has a reasonable case to make, they will need to balance that against the experience of the tenant, if no alternative housing is available.

Individual circumstances need to be balanced and taken into account. We believe that giving discretion to take into account individual circumstances on all grounds will allow the proper balance to be struck—as it has been during the period when emergency legislation has been imposed.

I take on board the cautionary tale about Montreal. I will make a note not to seek to learn too many lessons from the circumstances there.

That said, the longer-term work, beyond these particular measures, will include looking at the issue of winter evictions. Again, across European countries, there are a range of approaches to that. We will consult on the options to recognise the particular circumstances in winter, including the increased financial costs that people face at that time of year, as well as the lack of access to services at short notice that people might experience during some parts of the season.

Of course, if there is a protected period for evictions during winter, there will be similar concerns about what happens when that comes to an end and whether there might be unintended consequences. Therefore, we want to understand everybody’s perspective on such proposals so that we can ensure that we design provisions that are right for Scotland’s circumstances.

With regard to the picture that you paint of the role of the private rented sector in relation to homelessness, we should be aspiring to a situation in which the private rented sector provides flexibility and gives people who are facing homelessness ways of resolving their issues and avoiding that risk but also gives people the opportunity to move out of homelessness and get a tenancy that will be right for them, will support them, is in the right place and is at an affordable price. That is what we should be aiming for, and it can do that. As I said earlier, at other times the private rented sector has been the biggest source of newly homeless people, and that is what we need to avoid.

The requirement for pre-action protocols is in line with what has already been acknowledged as being best practice by good landlords who want to avoid evictions. We should recognise the fact that good professional landlords do not like the idea of instability in their tenancies. They want stable tenancies that work, and having that goal of avoiding eviction and trying to reach a way of sustaining a tenancy, where possible, through discussion with the tenant and pointing them in the direction of money advice services and financial support is a clear way of ensuring that we avoid a situation in which people are evicted into homelessness, where that is avoidable. The tribunal having the discretion to take into account the circumstances in which the landlord has attempted to go through the steps of the pre-action protocol is part of that.

Those steps will not be a magic bullet—no one is suggesting that this is the only thing that we need to be doing—but they will clearly be positive and beneficial with regard to our attempts to prevent homelessness, and are very much in line with the work of the groups that you mentioned that are concerned with these issues.

In some circumstances, the awareness-raising work is important in that regard. As we said earlier, the diversity of the private rented sector is significant. There will be landlords—perhaps those who are more likely to join organisations such as the Scottish Association of Landlords—who are aware of best practice and of the range of places where they can signpost a tenant for additional support if they need it. There will also be landlords who might not necessarily have encountered that before—they might not have intended to become a professional landlord and they might never have had a tenant before, let alone one who is in difficulty. If that is a new experience for them, they need to have access to information about how they can support their tenant as well as being aware of the requirement and expectation that they should try to do so.

I mentioned earlier some of the ways in which the Scottish Government funds, supports and works with organisations in the public and voluntary sector to provide those services, but we also have to ensure that landlords and tenants are aware of those sources of support, can confidently engage with the steps that we describe in the pre-action protocol, know what is required of them and are aware of where they can get additional help if they need it.

Again, I recall some of the discussion that you had on this with the earlier panel this morning. I noticed that some of the discussion on whether the permanence of the provisions should be considered in the year 2 housing bill considered the current course of action almost in isolation, instead of comparing it with the alternative course of action.

If we were to consider implementing the provisions in the year 2 housing bill, we would in effect have a situation where the provisions apply in the social rented sector but not in the private rented sector. Then you would bring them in, then let them lapse and then bring them in again. I think that that would lead to significant confusion—almost bewilderment, to be honest—for tenants and landlords and to a significant risk of confusion at tribunal level about precisely how the tribunal is supposed to treat each individual case at various times.

The evidence and experience that we have had from the operation of those two specific temporary provisions indicate that they are both proportionate means of achieving a legitimate objective of the Government, and that they have demonstrated a wider long-term value that transcends the particular circumstances of the pandemic. Having that in-out, in-out approach of letting them lapse and then bringing them back in again would, I think, cause far more confusion than any additional clarity that would come from consultation. I would reinforce the fact that the strong support for those measures—in particular, from organisations that are concerned with the rights and interests of tenants as well as the prevention of homelessness—gives us confidence that the measures will have a positive effect.

Yes, indeed. We are seeking to make our temporary provisions permanent and currently have a live consultation, with the introduction of a housing bill expected in year 2 of the current session of Parliament. That gives us the opportunity not only to continue the current system that was put in place temporarily, but to gather evidence and to gain understanding, and to learn from our experience of the system’s operation. That will inform our consideration of proposals to refine or adjust the system in the year 2 housing bill.

The new deal for tenants consultation, which was launched in December, made it clear that we have more work to do to strengthen tenants’ rights and improve quality in the private rented sector. It included the two changes that we are considering, which are consistent with the broader direction of travel towards having rights in the private rented sector that are more comparable to those in the social rented sector.

To have the provisions in place now and to fail to make them permanent would create confusion for landlords and tenants if we revisited the question in the year 2 housing bill. The learning from the exercise of the provisions on a temporary basis is that they give additional protection.

Any negative consequences are extremely slight and entirely reasonable. The costs are pretty low if the tribunal takes a little longer to consider the circumstances of an individual case when there is discretion that previously had not applied.

Any negative consequences are extremely slight in comparison with the strong advantages of having the additional protection. The clear argument is to make the provisions permanent now rather than to allow them to lapse, then consider reintroducing them in the year 2 bill.

Raising awareness is an extremely significant issue that will never go away. We know that landlords in the private rented sector ebb and flow over the years—they move into and out of the sector, and tenants move into and out of the sector all the time. For a great many younger people, their first home might be in the private rented sector. Given that, there will always be a need to ensure a high level of awareness of rights and the law, to protect people in the private rented sector.

We are part way through a tenant rights awareness-raising campaign, which has been an important way to give people basic facts in the top-line messages and to point them in the direction of much more significant and detailed information, should they need it. We also work closely with organisations such as Crisis and Shelter Scotland, which work much more closely with tenants who need the additional support that those organisations provide.

The issue of awareness will never go away. We will always need to keep ensuring that people who move into the private rented sector as landlords and as tenants become aware of their rights and obligations.

The requirement to comply with the pre-action protocol rests with the landlord, who is required to take reasonable steps. If they do so and are then met with a tenant who will not engage, they have clearly still met the test of taking reasonable steps and making the effort to, for example, make information available, explore repayment schedules and so on. If they have made such efforts, they will have met the test, which will be taken into account at the tribunal’s discretion.