In a significant legal development, a senior judge has unequivocally determined that the Scottish Government’s rent freeze was not in violation of the law. This verdict comes in the wake of a keenly-contested appeal brought forth by private sector landlords.
Across Scotland, landlords launched a judicial review within the hallowed halls of the Court of Session. Their legal representatives passionately argued that they had been subjected to discrimination due to the implementation of what they deemed ‘unlawful’ legislation. This contentious legislation initially froze rents in September 2022, subsequently introducing a 3% cap. Notably, this emergency legislation remains in effect until March 2024, albeit with a provision allowing landlords to request a rental increase of up to 6% in exceptional circumstances.
In this landmark legal ruling, Lord Harrower, presiding over the case, has decreed that the challenge spearheaded by Lord Neil Davidson KC, acting on behalf of several organisations, including the Scottish Association of Landlords, will not be upheld. This decision bears significant implications for both the private sector landlords and the Scottish Government, as the legal landscape surrounding rental regulations continues to evolve.
He ruled many arguments made by the petitioners fell “far short” and were “premature”, including the claim that the emergency rent freeze would be continued for an “indeterminate period”.
Lord Harrower also rejected the argument that the legislation was introduced “under the guise of a supposed emergency situation, sought to impose upon landlords without proper consultation, a lasting set of rent controls”, adding: “I consider that the respondents were well-founded in describing this as a bad faith or ulterior purpose challenge to the legislation.
“In that event, the petitioners would have failed to meet the high standard of proof beyond reasonable doubt which is appropriate to the challenges of that nature.”
During an earlier hearing, Lord Davidson had argued the freeze was not “temporary” because the loss in income was, in many cases, permanent.
In the aftermath of the ruling, John Blackwood, the Chief Executive of the Scottish Association of Landlords, issued a compelling call to the ministers, imploring them not to ignore the underlying and pressing challenges that persist within the housing sector.
Sarah-Jane Laing, chief executive of co-petitioners Scottish Land and Estates, said: “We are understandably disappointed, but, given the negative impact of the legislation on private landlords and the supply of rural homes, we felt that legal challenge was our only option.
“This action was raised in a fast-moving situation amid genuine and widely-held concerns that the Scottish Government was not striking the right balance between the interests of tenants and landlords.”
But the Scottish Greens, whose Government minister Patrick Harvie brought forward the Cost of Living (Tenant Protection) Act 2022, said families who benefited from the cap will be “breathing a sigh of relief” following the ruling.
The party’s housing spokeswoman Ariane Burgess said: “We warmly welcome this ruling. It clearly endorses the urgent action we took to support families and tenants through the cost-of-living crisis, and will allow the Scottish Government to continue pushing ahead with further work.
“The decision also makes it abundantly clear that the case fell ‘far short’ in its arguments. I hope this clarity encourages those who represent landlord interests to engage constructively as we develop a longer term framework.”
A Scottish Government spokesperson said: “The Scottish Government welcomes the terms of the decision.
“The Cost of Living (Tenant Protection) (Scotland) Act was introduced as an emergency measure to protect tenants in response to exceptional economic circumstances.
“We continue to listen to and work hard with partners and stakeholders to develop and deliver rental sector reform, including through our New Deal for Tenants – Rented Sector Strategy.”
Chalmers Properties along with our landlords & peers within the industry are disappointed with the result of the hearing from a balanced perspective and find the points made by Micheal Gove last week “Rents in the private rented sector should be agreed between landlords and tenants, and it is not for government to intervene in this” particularly interesting and perhaps the polar opposite of Lord Harrower’s judgement.
The court’s decision can be read here
