Cost of Living (Tenant Protection) (Scotland) Act 2022 - 2nd proposed extension: statement of reasons

1. Introduction

1.1 The Cost of Living (Tenant Protection) (Scotland) Act 2022^[1] ("the Act") is a response to the impact of the cost crisis on those living in the rented sector. The Act introduced a temporary rent cap (initially set at 0%) and a temporary moratorium on the enforcement of evictions, along with simplifying the process for claiming unlawful eviction damages and increasing the level of damages that can be awarded.

1.2 The Act was initially due to expire on 31 March 2023, however Scottish Ministers used the powers available to them under section 7(3)(a) of the Act to extend Part 1 for a further period of 6 months to 30 September 2023.

1.3 In addition to being time limited, the Scottish Government has also made clear it will retain and use the provisions within the Act only for as long as they are necessary. As a result, where it has been possible to do so, provisions in the Act have been suspended or expired when they have fulfilled their purpose and the Scottish Government has examined available evidence and views and both supported a change in approach.

1.4 This Statement of Reasons is laid before the Scottish Parliament alongside a set of draft Regulations.^[2] This Statement sets out the evidence why the Scottish Government believes it is necessary and proportionate to extend Part 1 of the Act beyond 30 September 2023 for a further, and final, six month period. If approved, the applicable measures would be extended for a final six month period and would expire on 31 March 2024 (or before if they ceased to be necessary and proportionate). Further extension of Part 1 of the Act beyond 31 March 2024 could not subsequently be sought due to the sunset provisions in section 7(3)(b) of the Act. However, the accompanying documents published alongside the emergency Act acknowledged that suspension or expiry of the rent cap may lead to significant and unmanageable rent increases for tenants, if rents moved immediately back to open market rent. It was noted in these circumstances, the existing rent adjudication process, based on comparison to market rents for similar properties, would not provide a reasonable mechanism for determining a reasonable rent increase. The emergency Act therefore contains a power to modify the approach to adjudication of rent disputes on, or in anticipation of, the expiry or suspension of the temporary rent cap.

1.5 This Statement of Reasons replaces the need for a formal Report on the review of the operation of the provisions in Part 1 of the Act (per section 9(8)). Notwithstanding this, an updated overview of the Status and Operation of the provisions; stakeholder consultation undertaken (as per section 9(3) of the Act); and duty to provide information and advice for tenants are provided in this Statement of Reasons.