Chamber and committees

As are the members who lodged the amendments in this group, the Government is determined to bring forward a system of rent control that supports the stabilisation of rents for tenants while ensuring that there is a balanced approach that provides appropriate protection for the property rights of landlords and supports investment in the development of rented homes. Although some amendments do not quite strike the balance that is needed, I absolutely recognise the importance of the issues that have been raised—in particular, those that have been raised by Maggie Chapman and Emma Roddick—about the need for tenants to understand their rights and be able to enact those should they so wish. I understand in particular the importance of allowing sufficient time for tenants to challenge a rent increase that they feel is not in line with the rules, as Emma Roddick set out.

That is why we lodged Government amendments 399 and 400, in the name of Paul McLennan, which would affect tenants in properties that are not covered by rent control. Those amendments would increase from 21 days to 30 days the period during which a tenant in an area that is not rent controlled or in an exempt property can refer a proposed increase to the rent officer. The amendments are designed to assist tenants to make use of their rights to challenge a rent increase that they see as excessive. I consider that extending the window to 30 days is a proportionate means of achieving that.

I turn to the amendments that have been lodged by members.

Emma Roddick and Maggie Chapman have set out very strong points on that.

Amendment 138, in the name of Emma Roddick, and amendments 161, 162, 201 and 202, in the name of Maggie Chapman, would extend the length of the period in which a tenant can challenge a rent increase notice. Amendment 138 would give the tenant up to 42 days to notify the landlord that they intend to refer a rent increase to the rent officer, and amendments 161 and 162 would give the tenant up to one year to notify the landlord of an intended referral to the rent officer or tribunal. Amendments 201 and 202 would give the tenant another year to make a referral.

If some of those amendments are agreed to, the tenant would have up to two years to challenge a rent increase notice. That would leave landlords and tenants facing a long period of uncertainty regarding the rent that is applied. Although I agree with the principle that tenants should have sufficient time to challenge an increase, extending the period beyond the current combined period of 63 days could create significant uncertainty for landlords and tenants.

However, I recognise the concerns that members have raised, and I accept that we have perhaps not quite got that balance correct yet, as Emma Roddick has set out. I am happy to discuss with members what might be necessary to ensure that tenants have enough time to challenge the increase but in a way that does not create undue uncertainty for tenants and landlords. Given the Government’s willingness to work through that process with Ms Roddick and Ms Chapman, I ask them not to move their amendments.

Rachael Hamilton’s amendments 218, 219 and 228 would change the provisions that regulate how frequently the rent may be increased for a property in a rent control area. Where a property in a rent control area is not a previously let property, it is not subject to the rent cap at the start of the tenancy. For those tenancies, the landlord is prevented from increasing the rent in the first 12 months.

The bill sets out a power for ministers to prescribe circumstances in which increases in the first 12 months would be permitted. Amendments 218, 219 and 228 would expand that power to prescribe the circumstances in which the landlord could increase the rent more frequently than once a year, including in circumstances that are considered to be an emergency. The amendments could result in some tenants in a rent control area being subjected to more rent increases more frequently than other tenants. I consider that allowing more frequent rent increases would undermine the intention of the bill’s rent control measures. I therefore urge Rachael Hamilton, or Alexander Stewart on her behalf, not to press amendment 218 or move amendments 219 and 228. If he does so, I urge members not to support them.

Amendment 565, in the name of Mark Griffin, would disapply the rules on rent control for any tenancy in which the landlord is a registered social landlord, a subsidiary of the registered social landlord or any one of three named corporate bodies. I very much recognise that the intention is to exempt mid-market rents, which we have spoken about in relation to amendments in previous groups. Although I acknowledge the need to protect the delivery of such tenancies, that is best done through the consultation that we have previously discussed in committee. For that reason, I cannot support Mr Griffin’s amendment 565, but I encourage the mid-market rent providers to make that exact point in the consultation, because Mr Griffin’s points require further airing during that process.

Absolutely. Mid-market rent and build to rent are among the areas of key focus for other stakeholders, in particular tenants and their representatives, that we have discussed. I assure Meghan Gallacher that work to encourage those exact points to be made is on-going.

Amendment 220, in the name of Rachael Hamilton, would require that rent increase notices for private residential tenancies in rent control areas set out the reasons for the proposed rent increase. It is not clear what benefit that would provide for tenants. Under the Private Housing (Tenancies) (Scotland) Act 2016, a tenant with a private residential tenancy can refer a proposed rent increase to a rent officer for adjudication, and the rent officer will determine the rent with reference to the factors that are set out in the relevant sections of the act. Those factors do not include consideration of the reason for the rent increase.

I am of the view that requiring all landlords with private residential tenancies to provide that information to tenants when increasing the rent would be an unnecessary intrusion into the landlord’s privacy with no obvious benefit to tenants, and there would clearly be an increase in the bureaucracy and requirements for private landlords. In addition, there would be significant resource implications in relation to the administration of such information. I urge her not to move the amendment.

Amendments 494 to 496, in the name of Maggie Chapman, seek to introduce an adjudication process that would include consideration of market rents and property quality when a tenant in a rent control area challenges an increase. Currently, rent increases in rent control areas will be limited in line with the cap, and the reference in the bill to the rent officer is to confirm that that is the case. Ms Chapman’s amendments 497 to 499 are similar to amendments 494 to 496 but would apply in cases in which a landlord or a tenant requests a review of a rent officer’s determination of a proposed increase.

The amendments effectively seek to override the rent cap and would instead create a subjective process that goes beyond the rent cap and the current process of applying open market rent for properties outwith rent control areas. The current proposals are the correct approach and provide clarity to investors and landlords, and I therefore cannot support the amendments.

I thank all members who have lodged amendments in the group for the discussions that I have had with them in the run-up to today, which have informed the Government’s thinking greatly. I apologise in advance for the length of my speaking note on the group, but it covers a number of amendments that have been lodged by different members, so I ask colleagues to bear with me.

I will first address amendment 231, in the name of Paul McLennan, which will enable Awaab’s law to be introduced in Scotland. I will also comment on the related amendments that have been lodged by Graham Simpson and Emma Roddick.

The Scottish Government is committed to delivering Awaab’s law in Scotland, and I consider that amendment 231, coupled with the use of powers in existing legislation to make provision for the private sector, will achieve that aim. The amendment will enable the Government to implement the equivalent of Awaab’s law in Scotland in the social rented sector, so that social landlords must deal with issues such as damp and mould in tenants’ homes in a timely manner. The amendment will expand existing powers in the Housing (Scotland) Act 2001 to give ministers the ability to impose timeframes on social landlords to investigate disrepair and commence repairs.

For context, I note that Awaab’s law in England will have 28 defined hazards. The UK Government has been taking a phased approach since Awaab’s law was introduced, in July 2023. We want to ensure that landlords and tenants are clear about their respective rights and duties, which is why we will have further engagement with stakeholders later this year to fully understand the types of repairs that should be included, as well as appropriate timescales for investigating and commencing those repairs. Members have rightly referred to damp and mould, but other hazards will also be addressed in the consultation.

As well as placing requirements on social landlords, Scottish ministers are committed to bringing forward equivalent requirements in the private rented sector after further consultation. Those can be delivered under existing powers via the repairing standard in the Housing (Scotland) Act 2006, which is why no similar amendment has been lodged for the private rented sector. However, I stress that we are consulting not on the “if” but on the “how”, as per social rented sector amendments that we will then take forward.

The issues that have arisen in England, which have been raised in the consultation, demonstrate why consultation is required. It is an exceptionally complex situation. To take just one issue, we want to make sure that the timescales are as stringent as possible but we do not want to set unrealistic timetables that a good landlord would be genuinely unable to meet. If you will forgive me, Maggie, I hope that the rest of my speaking note will deal with some of the details. If it does not, I will certainly be happy to discuss the matter further with you.

I cannot support the related amendments that have been lodged by Graham Simpson and Emma Roddick. Mr Simpson’s amendment 231A would change amendment 231 so that the power to make regulations would become a duty. That would require the Scottish ministers to make regulations on every issue in section 27(3) of the 2001 act, although it may be necessary to cover only some of those issues. A technical point is that it is not entirely within the gift of Scottish ministers to make regulations that are subject to the affirmative procedure, as those regulations first have to be approved by the Parliament.

Mr Simpson’s amendment 231B is already catered for by amendment 231, which enables provisions to be made in connection with the right of a tenant to have qualifying repairs carried out, including provision that may require the inspection and approval of any repairs to address issues relating to damp or mould. However, from my conversations with Mr Simpson—for which I thank him—I appreciate that he remains concerned that there is still a gap in the Government’s amendments. I am convinced that there is not, but I believe that there is room for discussion, because he and I are very much on the same page of wanting to make sure that the system is as robust as possible. I am therefore happy to work with him in the run-up to stage 3 if I cannot convince him that no change is required.

Amendment 443, in the name of Graham Simpson, would oblige the Scottish ministers to lay draft regulations under section 27 of the 2001 act within six months of amendment 231 coming into force. That would remove Scottish ministers’ discretion, thereby restricting our ability to consult meaningfully with stakeholders and engage with the UK Government. I believe that there would be a great danger of making poor regulations as a result of a lack of meaningful and robust consultation.

Amendments 444 and 446, in the name of Graham Simpson, would oblige the Scottish ministers to make regulations to ensure that, in relation to damp or mould, private landlords would be under repairing obligations equivalent to those of social landlords. Emma Roddick’s amendment 444A would require those regulations to include a process whereby a private landlord would have to make a compensatory payment to tenants if they had failed to meet their repairing obligations. Amendments 444, 444A and 446 are not necessary, as powers in the Housing (Scotland) Act 1987 and the 2006 act already enable existing private sector standards to be modified, enabling the introduction of Awaab’s law. The repairing standard can already be enforced via a rent relief order, which compensates a tenant with a rent reduction if their house fails the repairing standards.

I appreciate that I have already spoken for some time. I reassure Graham Simpson that I very much support the policy intent behind many of the amendments, but I do not think that they are required. There are other ways to achieve that policy intent. I would like to offer that slight caveat to the point that he has made.

I am particularly keen to work together in this area. I am in no way saying that Government drafting is perfect and, as the minister, I take responsibility for that, because it is for me to sign that off.

In relation to amendment 231, I think that we have the issue covered, but the discussions that we have had so far show that there is still disagreement about whether it is covered. Based on those discussions, I believe that we genuinely want to get to the same point, and I would be happy to work with Mr Simpson on that. If there are gaps, I am absolutely determined to close them before stage 3, because there is no point going through all this work if we do not get as robust a system as possible. I thank Mr Simpson for lodging his amendments so that we can absolutely test the proposals to breaking point to find out whether there are any gaps.

I thank the member for the interesting conversations that we have had on the matter. I reassure him that, as I understand it, a consultation on CPOs will start in September this year—I will get back to the member on the timing if I have not quite remembered it correctly.

The member has raised an interesting point about how the approach can go further, whether through compulsory sales orders or compulsory leasing orders, which have been discussed in other areas when we have looked at ways of tackling the housing emergency. All that is of interest to the Government.

I very much agree with the member that, although Glasgow has been at the forefront of using CPOs—indeed, a lot of local authorities can learn from what it has been doing—we can clearly do more in that area.

I am keen to work with Mr Sweeney on some of the points that have been raised in this discussion. I am not sure that the issue requires legislation, but his points about the best use of the current housing stock, and particularly about growing that housing stock, are exceptionally telling regarding his interest in Glasgow and will also have benefits further afield. I am keen to carry on discussions about what more can be done.

In a rent control area, a landlord will be prevented from increasing the rent under a private residential tenancy for the property more than once in a 12-month period, even if a new tenancy is granted in that time. Accordingly, tenants who are considering entering into a lease in a rent control area should have the information that they need to make informed decisions about renting a property. Therefore, the Scottish Government has lodged amendments 354 to 361 in relation to information that landlords must include in rental adverts for properties in rent control areas, unless those properties are exempt from rent control.

Together, amendments 355 and 358 will ensure that information about rent increases in the previous 12-month period and the most recent rent payable for the property is available to tenants who are looking to rent in a rent control area. That will help tenants to understand the earliest date on which the rent can be increased, which is an essential part of ensuring that the rent is applied correctly between tenancies. Amendment 360 will help a landlord to understand whether a previous rent increase is a relevant rent increase for the purposes of these advertisement requirements. That will also support the provision of the correct information in adverts.

Amendments 356, 357 and 359 require the advert to highlight to prospective tenants that the rent at the start of the lease may be different from the rent specified in the advert if there is a variation in the percentage change in the consumer prices index before the start of the lease. That change is necessary as a consequence of the amendments to set out a CPI-based rent cap formula in the bill, which were debated in group 5. These amendments will enhance the effective operation of the rent control measures in the bill and will ensure that tenants have the information that they need in order to exercise their rights and make informed decisions about taking on a tenancy.

Amendment 422, in the name of Mark Griffin, would require the provision of an inventory to all tenants before a tenancy commences. The provision of inventories is already common practice in the private rented sector, and, in instances in which a letting agent deals with a tenancy check-in, it is a requirement under the code of practice unless otherwise agreed in writing with the landlord. The Scottish Government’s easy-read notes, which must accompany the PRT model tenancy agreement, encourage landlords and tenants to create a detailed written inventory and schedule of condition at tenancy commencement. Therefore, the need for a statutory requirement is unclear. In addition, although it is in the best interests of tenants and landlords for an inventory to be completed, there would be difficulties involved in enforcing any mandatory requirement. I therefore ask the member not to move the amendment

Amendments 247 and 248, in the name of Daniel Johnson, would require private landlords, under a private residential tenancy, and social landlords, under a social tenancy, to provide tenants with information on the rent that is payable in each of the previous 36 months. Although I recognise the calls for improved data on rent to be made available, these amendments are not necessary. For the private rented sector, information on the previous rent payable is required by tenants only where a rent control area is in place and would be unnecessary for other tenants. We have already made provision, as part of rent control measures and through our own amendments, to ensure that tenants have the information that they need to know, such as when the first rent increase might take place. That will allow people to consider whether they want to take a tenancy on.

Where a tenancy is not in a rent control area, increases in rent are restricted to once in a 12-month period, and my amendments would prevent rent increases within the first 12 months of the tenancy. In addition, section 11 of the 2016 act already allows ministers to impose a duty on landlords or prospective landlords to provide the tenant with information as specified in regulations, should that be required in the future.

In the social rented sector, information on rents is already publicly available to tenants and prospective tenants on the Scottish Housing Regulator’s website, through its landlord comparison tool. That enables a tenant or anyone with an interest to check the average rent of different sizes of landlords’ homes from 2014-15 onwards. Information on the regulator’s annual reports for each landlord also includes the average percentage increase in weekly rent for each year. Social rented sector tenants also have a right, under the 2001 act, to request information on their landlord’s policy and procedure in relation to the setting of rent and other charges, and the landlord has to provide that.

Therefore, amendments 247 and 248 are not required, and I ask the member not to press them.

Amendment 273, in the name of Maggie Chapman, seeks to introduce additional information that a landlord must provide to tenants alongside their written terms of tenancy before the day on which a new tenancy commences. I agree that it is vital that tenants are aware of and empowered to utilise their rights, including having access to relevant information that may affect their tenancy. Existing statutory requirements require specified information to be provided by the landlord free of charge to tenants at the point at which their tenancy commences. In addition, existing regulation-making powers in the 2016 act enable ministers to set out further information that must be provided by a landlord to a tenant. In my view, it is more appropriate to use those existing powers than to insert new requirements in the bill.

I have very little to say in winding up, but I recognise that we will need to raise awareness of new rights and changes and update tenancy documents and information as part of the implementation of the bill, should it be passed by the Parliament. Clearly, further signposting can be provided at this point. Although I do not agree with Maggie Chapman’s amendments, I think that she raises a very important point about ensuring that the tenant has the right information and that they obtain it in an appropriate timeframe. That is an important part of the work that we will need to look at in implementing the bill.

I press amendment 354.