Opinion: The unaddressed issue in residential tenancies – part two

Opinion: The unaddressed issue in residential tenancies – part two

Pictured (L-R): John Stirling and Conner McConnell

John Stirling and Conner McConnell conclude their critique of housing legislation currently under consideration at Holyrood. See part one here.

In our article “The unaddressed issue in residential tenancies” published in Scottish Legal News last month, we drew attention to a deficiency in section 48 of the Private Housing (Tenancies) Scotland Act 2016. We highlighted that it was discriminatory on the basis of protected characteristics, in effect. In this article we discuss the proposals of the Housing (Scotland) Bill currently at stage one in the Scottish Parliament, and how these new amendments fail to thoroughly address the problem identified.

The bill does amend section 48 but does not resolve the discrimination. It adds a new section 48A to the 2016 Act. That allows a joint tenant to leave 1) after giving a prenotice of at least two months to their joint tenants and the landlord and 2) then serving a section 48(1) notice within twenty eight days of the expiry of the prenotice. Together, the notices extinguish the tenancy.

It’s a convoluted process. That is a problem in itself; complexity often discriminates indirectly against minority groups. Those living with a mental disability, for example, may struggle with complex processes. Beyond that, the balance struck between tenants and landlords is very different than before.

The new procedure ends the tenancy for all of the joint tenants. A joint tenant can no longer veto a departure. Now all are precarious. The amended provision still allows joint tenants to force others into an unwanted situation. If a landlord takes joint tenants, the number who can give notice is increased.

Part one of this article noted that security of possession was a pendulum issue and that changes had unintended consequences. The problem with section 48 was raised with the Scottish government by Willie Rennie MSP in 2021. The Directorate for Housing and Social Justice responded:

“One of the overall aims of introducing the [2016 Act], which brought in the new private residential tenancy, is to improve security of tenure for tenants. For this reason, the private residential tenancy was designed so that one joint tenant cannot terminate a joint tenancy on behalf of all the joint tenants, as this could result in a tenant who wished to stay in the let property being made homeless when a joint tenant chooses to leave….

“Ultimately, it is a choice for a tenant to make with regards to what property they choose and whether the tenancy option provided for that property meets their needs. I appreciate this is not helpful to your constituent in relation to her current circumstances, however the policy intention of improved security, as introduced in the 2016 Act, is being achieved.”

The pendulum has swung, the policy of the 2016 Act is to be reversed. If the bill is passed, tenant security will be much reduced. That is a significant change. The policy memorandum that accompanied the bill suggests that the position will revert to the pre 2016 Act position. That is not so. Short Assured Tenancies were then the norm and all tenancies had to have an end date. Many grounds of recovery were mandatory. To compare the two regimes is to compare apples to pears.

There are consequences not considered by the policy memorandum. Landlords may well now choose not to contract with all the occupants of a property if they want security of income. That leaves the lead tenant with increased exposure to the rent and any breaches of the lease. Alternatively, in today’s world of rent controls a landlord might choose to contract with all occupiers to increase his chance of a new lease at a new market rent (if outside a rent control area). There is scope for manipulation by landlords of tenants and by joint tenants of each other.

The directorate’s 2021 words ring hollow. The rental market has been interrupted by government action. All are not equally free to make choices and negotiate terms that suit them. All those points aside: the new provisions will also likely operate in a potentially discriminatory way. A Scottish resident may choose to give a prenotice to avoid a summer’s rent, which might not suit an overseas student. For the joint tenant with asthma, caused by the property, looking to end the tenancy, three months is a significant period of time. A spouse’s financial exposure to rent is now reduced to a little over three months’ rent if they move out or three months of risk if they can’t afford to. In practice, females are at greater risk than males. The potential for an exclusion order or a transfer of tenancy under the Matrimonial Homes (Family Protection) (Scotland) Act 1981 or the Civil Partnership Act 2004 would not resolve the problem. These options involve a judge with a discretion and potentially the ability to afford the joint tenant’s share of the rent. However, their existence materially helps mitigate the potential for indirect discrimination.

The right not to be discriminated against on the basis of protected characteristics such as sex and disability is not absolute. A balance must be struck. Does the bill strike the right one? We are all for remedies at the hands of the parties. Courts are difficult to access and imply delay, cost and risk, which can be both a barrier to justice and indirectly discriminatory. However, there is something precious to protect here and legal aid is still available to individuals. We suggest the current proposals would be improved with further protections against abuse and a way of shortening the waiting period and / or interim relief where a protected characteristic is impinged or there’s a vulnerable tenant (even if there is no protected characteristic impinged). An interim remedy to prevent the joint tenants being forced out and a means of regulating the rent payment burden would be helpful. An ability to back-date and vary payment obligations would be helpful, too, where there is evidence of abuse. We think this is probably a court process.

The authors are grateful to Professor Andrew Steven and Malcolm Combe for their comments on part one of the article.

John Stirling is a partner and Conner McConnell is an associate at Gillespie Macandrew

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