The Renters’ Rights Bill – what will it mean for Scottish renters? 

By Malcolm Combe - Posted on 23 September 2024

Introduction 

The regulation of housing in Scotland is generally within the remit of the Scottish Parliament. It would be fair to say that Holyrood has been relatively active when it comes to the law around Scottish residential tenancies since devolution. Every so often though, a development at the UK Parliament can have an impact for the Scottish private rented sector. The new Renters’ Rights Bill is such a development. 

As will be explained in this post, the Renters’ Rights Bill will have a targeted impact in Scotland (and in Wales), but in the main its effects will be felt in England. To explain that English context (and the timing of this Bill), private renters in England have been waiting for reform to improve their lot – and indeed their let – for a while. A particular bone of contention is the possibility of so-called “no fault evictions” for many tenants. Successive governments have committed to removing these essentially fixed-term tenancies of a home, which allow a landlord to evict people from their home on the expiry of the let irrespective of how well behaved they been. That became the baseline position in the Scottish, English and Welsh private rented sectors after legal reform in 1988. England is now the last part of Great Britain to move away from this situation. It has taken a while though. Intentionally or otherwise, successive governments have dragged their feet on the way out. Theresa May called for an end to ‘these unfair evictions’ back in 2019. Then, despite a manifesto commitment, the previous UK Government allowed its promised ending of no-fault evictions to be jettisoned before it sank at the General Election. 

The Renters Reform Bill – as it was known before it fell when Parliament was prorogued – was the legislative vehicle which would have made this change. That was not all it would have done though. In addition to various changes of application only to England, viewers in Scotland and Wales were also interested in the Bill owing to reforms it would have made around the selection process for new tenants. These would have outlawed discrimination against prospective tenants on the basis of their benefits status (that is, being in receipt of social security) or because they had children. Owing to the retention of certain powers to the UK Parliament, particularly around equality matters, such changes fell to be legislated for in London rather than Edinburgh or Cardiff. Owing to the vagaries of Westminster’s legislative timetable and then the General Election, the first cut of these changes fell with the first Bill. These changes have now resurfaced in the Renters’ Rights Bill. It is those changes that this blog post will consider, from a Scots law perspective. 

The Scottish clauses compared 

Anyone who had already mugged up on these proposed reforms will be relieved that the relevant provisions of the Renters’ Rights Bill basically match the text found in the Renters Reform Bill in its last incarnation (when it was brought from the Commons on 1 May 2024). Any differences between the two sets of clauses are inconsequential, but for completeness it can be noted that as compared to the defunct Renters Reform Bill: the operative clauses have been shunted along a couple of positions (starting at number 49 rather than 47); the headings and subheadings found in Part 1, Chapter 5 have been tweaked; and the self-references have (understandably) changed to reflect the new short title. 

The Scottish clauses in context 

The clauses in the Renters Rights’ Bill sit under a heading of “Discrimination in the rental market: Scotland” and a subheading of “Discrimination and discriminatory terms: children and benefits status”. For anyone who might be surprised or indeed shocked that other forms of discrimination are not targeted here, this can be quickly explained by the rules that are already in place across Great Britain to forbid the most egregious tenant-selection processes. As explained in the leading Scots monograph on the topic, these rules (now consolidated into the Equality Act 2010) mean that a landlord cannot refuse to let premises to a person on the basis of a protected characteristic, and also cannot let out premises to a person with a protected characteristic on less favourable terms than would otherwise be the applied (see Rennie with Blair, Brymer, McCarthy and Mullen, Leases (2015) at paragraph 16-50). This means that infamous signage or stipulations in adverts such as “No Blacks, No Dogs, No Irish” (or any other permutation of that order) would not survive contact with a lawsuit today (although the “No Dogs” element will be returned to below).  

The specific Scottish clauses 

Discriminating in relation to children 

Turning to the text of the Bill, the first aspect of this reform amends Private Housing (Tenancies) (Scotland) Act 2016. The 2016 Act is the statute that gave Scotland its prevailing private sector letting vehicle, namely the private residential tenancy (or PRT). When the amendment kicks in, a new section 6A of the 2016 Act will make it an offence for a prospective landlord (or anyone acting for them) to prevent someone from doing one of four things where the prospective landlord believes that the property they plan to let would be used by a child were they to enter into a tenancy with that other individual.  

The four activities that a prospective landlord must not prevent in such circumstances are someone (i) enquiring whether the property is available for let; (ii) accessing information about the property; (iii) viewing the property in order to consider whether to seek to rent it, and (iv) entering into a tenancy of the property. Also forbidden is the application of a provision, criterion or practice in order to make people who would allow the property to be used by a child less likely to enter into a tenancy of the property than people who would not be accompanied by a child. 

There are some clarifications in the Bill, for example in relation to what is not an offence (e.g. someone simply publishing an advert or disseminating information, or facilitating communications between potential counterparties). Another clarification explains that a property is to be taken as used by a child where a child lives with or visits a person at the property. “Child” means a person under the age of 18: family lawyers can add this to the multiplicity of definitions of that term. 

What of prospective landlords who are concerned that the property they hope to let is not suitable for children? This is catered for by the provision of a defence, which comes into play when the conduct is a proportionate means of achieving a legitimate aim. Online guidance notes clarify when this might apply, under a heading “What about if properties aren’t suitable for children?” These notes ask landlords and agent to consider applicants on their individual circumstances, giving the following example. 

A 1-bedroom flat for example might be suitable for a mother with a baby but not for a parent with 2 teenage children, where this level of occupancy would mean that rules on overcrowding were breached. 

The notes then explain it will be for those letting properties to consider “whether excluding prospective tenants with children represents a proportionate means of achieving a legitimate aim” and that each decision would need to be evidenced on a case-by-case basis. 

A second defence can apply when the property is insured under what the Bill calls “an excluded contract of insurance”, such that the conduct that would ordinarily be discriminatory is actually to prevent someone from breaching the terms of their insurance. This is a defence with a limited shelf-life, which will only apply to insurance contracts entered into before (and not renewed since) the new rules come into force. A separate clause in the Bill negates any such clauses in new insurance contracts or at the point of renewal of existing policies. 

Discriminating in relation to benefits status 

The second discriminatory activity that will be outlawed relates to prejudice against those who rely on social security. It is worth recalling that there have been various successful challenges of discrimination against someone who is in receipt of benefits, plus reports of out of court (or out of tribunal) settlements when litigation was threatened, albeit such challenges have tended to hook in discrimination on other bases (notably in relation to the protected characteristics of sex and disability, owing to those factors interplaying (indirectly) with the need to claim benefits). Nevertheless, having a statutory rule that specifically addresses those who would discriminate against people who rely on social security sends a powerful signal to society, not to mention it may simplify or even stave off future litigation. 

The “Offence of discriminating in relation to benefits status” is to be introduced by a new section 6B of the 2016 Act. It largely tracks the offence and also one defence for discriminating in relation to children. The defence that is mirrored relates to any insurance conditions that may apply (in the short term), but there is decidedly no defence in relation to a landlord being able to demonstrate that their pickiness is a proportionate means of achieving a legitimate aim. 

Other provisions of the Bill define “benefits claimant” (being a person who (a) is entitled to payments (including payments made directly to a landlord) under or by virtue of benefits and welfare legislation, or (b) is entitled, by virtue of section 80 of the Local Government Finance Act 1992, to a reduction in the amount of council tax payable in respect of the property), and “benefits and welfare legislation” (being: the Social Security Contributions and Benefits Act 1992; the Jobseekers Act 1995; the State Pension Credit Act 2002; the Tax Credits Act 2002; the Welfare Reform Act 2007; the Welfare Reform Act 2012; the Pensions Act 2014; and the Social Security (Scotland) Act 2018). 

Enforcement and other considerations for new PRTs 

The aforementioned online guidance notes also have this to say about the rental discrimination provisions. 

Which nations do the rental discrimination provisions apply to?

We are introducing these protections in England and have worked closely with the Welsh and Scottish Governments to extend the rental discrimination provisions to Wales and Scotland through the Renters’ Rights Bill.

As housing is devolved and enforcement mechanisms vary, the penalty for a breach of rental discrimination provisions in Wales and Scotland will be a criminal offence in line with the wider housing framework of the devolved administrations. 

This contrasts with England, where local councils will get powers to impose civil penalties on landlords of up to £7,000 for breaches (with the possibility of an appeal against the penalty at the First-tier Tribunal). Anyone convicted of a new Scottish offence (owing to discrimination against those with children or on benefits) is liable on summary conviction to a fine not exceeding level 3 on the standard scale (which is currently £1000); that is, bigger financial but non-criminal penalties might be applicable in England.  

Another point of interest is the new section 6D of the 2016 Act, which clarifies there will be no prohibition on taking a person’s income into account when considering whether that person would be able to afford to pay rent under a private residential tenancy. That is to say, a prospective landlord cannot discriminate against someone for being a single parent, but can weigh up the (possibly suppressed by society) income that a single parent actually earns. 

One final point to mention relates to any existing PRTs that incorporate terms that are to be classed as discriminatory under the new regime. A new section 6C will render these of no effect, unless they are fortified by a subsisting clause in an insurance contract that is in point.  

Other tenancy reform 

Older letting vehicles are also catered for, but only in the sense of nullifying any existing terms in subsisting tenancies (much like terms in existing PRTs are targeted). This reform is required as any pre-PRT tenancies which have been ticking along since they were entered into (prior to December 2017) are still governed by whichever pre-2016 Act regime applies to them and absent such provision any discriminatory terms which happen to exist could similarly tick along.  

Other legal effects – insurance contracts and standard securities 

I’ve already alluded to the reform of insurance contracts, which will make it impossible for an insurance contract relative to a dwelling to contain a provision (however expressed) requiring the insured to prohibit a tenant from having a child live or visit there or to prohibit a benefits claimants from living there (see clause 51). This Bill doesn’t just affect leases and insurance contracts though. A new clause 50 reforms the law around standard securities (i.e. encumbrances over land to secure payment of a debt, often known as mortgages). This will render any term of a standard security over land that consists of or includes a dwelling of no effect where the term requires the debtor in the standard security to prohibit or otherwise make things awkward for any tenants to have a child live with or visit them there, or requires the debtor in the standard security to not have a benefits claimant as a tenant. 

No Dogs? 

The Renters’ Rights Bill will afford English renters a right to request the landlord’s consent to keep a pet, and such consent is not to be unreasonably refused by the landlord. Why doesn’t the Bill make similar provision for Scottish renters?

Fear not, Scottish animal lovers: a separate law reform measure along similar lines is catered for by the Housing (Scotland) Bill that is currently before Holyrood. Further analysis of that planned reform can be found in an earlier blog post by the present author.  

Conclusion 

The Renters’ Rights Bill is clearly an important step in rebalancing the rights of tenants and landlords. Given the majority of its terms relate to matters in England, not to mention how eye-catching some of those provisions are, it seems safe to imagine that the provisions that affect Scotland and Wales are not likely to face too much in the way of scrutiny as the Bill progresses through the Houses of Parliament. The political balance in the House of Commons should also mean that that this Government-backed Bill will make steady progress. Not to tempt fate, it accordingly seems likely that new renters’ rights will indeed be coming to Scotland, and it may be prudent for Scottish landlords to review their selection practices now to ensure they will not fall foul of the new rules.

The fact the new Scottish provisions in the Renters' Rights Bill basically mirror what was in the Renters Reform Bill should not be taken as an indication that the new Bill is also unchanged as far as its impact on English law is concerned, with notable differences between the two Bills relating to more stringent habitability standards in the private sector and the outlawing of bidding wars between tenants. This might lead to another dynamic for Scotland to consider, namely whether features that the Bill will introduce in England that are not currently in play in Scotland should also be introduced north of the border. The proposed requirement for landlords to state the rent for a property and to avoid rental bidding, found in clause 55 of the Bill, may provide a notable example of this. The Housing (Scotland) Bill that is currently before Holyrood contains provisions about new rent control areas, but there are no rules there or indeed elsewhere around competitive bidding between tenants seeking to secure a particular sought-after Scottish property. If such rules do indeed find their way into English law, a clamour for something similar to be introduced into Scots law may follow.