Last month we published a blog summarising the consequences of the Coronavirus (Scotland) Act 2020 for the real estate sector. The Scottish Government has now published its next significant set of legislative proposals in response to the Coronavirus pandemic: the Coronavirus (Scotland) (No. 2) Bill.
The Bill is still subject to further amendment and parliamentary scrutiny, but in its current form the Bill proposes that:
- Student Lettings – tenants under "student residential tenancies" will be entitled to terminate their lease for a reason relating to Coronavirus by giving their landlord just seven days' notice. This applies to existing leases and those entered into before the Bill becomes law. 28 days' notice must be given under tenancies put in place after the Bill becomes law. The Bill does not expand on what a "reason relating to Coronavirus" must be.
"Student residential tenancies" are those tenancies granted by universities and purpose-built student accommodation providers (with planning permission for student accommodation and at least 30 beds) granting the tenant the right to occupy the let property while the tenant is a student.
Nominations agreements and lettings of whole-sale accommodation space to educational institutions themselves appear not to be affected by the Bill, albeit the associated downstream lettings to students will be.
The Scottish Government's formal commentary accompanying the Bill explains that these provisions are designed to assist students with tenancies of purpose-built student accommodation. Most private lettings to students (e.g. in the buy-to-let sector) are already capable of termination on 28 days' notice in terms of the Private Housing (Tenancies) (Scotland) Act 2016.
- Registered Social Landlords – the deadline within which Registered Social Landlords must provide their annual accounts to the Scottish Housing Regulator will be extended from six to nine months from the end of the landlord's financial year.
- Listed Building Consents – the validity period of any listed building consent which would otherwise expire between the Bill becoming law and 6 October 2020 will be automatically extended until 6 April 2021.
- Register of Inhibitions – this Register allows creditors to register inhibitions (in effect blocks) against a debtor dealing with their property without first discharging the inhibition. It had been closed to the majority of applications due to the closure of Registers of Scotland to paper applications. A digital system has been created and will become available for the electronic registration of inhibitions.
- Land and Buildings Transaction Tax – purchasers who bought residential property in the period between 24 September 2018 and 24 March 2020 and paid the Additional Dwelling Supplement will receive an additional 9 months to apply for a refund. Please see this blog post for full details.
- Business Rates – The Scottish Government will receive the power to offer back-dated business rates relief for the 2020-21 rates year. Whilst the Bill does not oblige the Government to exercise these powers, the inclusion of this provision in the Bill suggests that further rates relief may form part of the Government's Coronavirus financial support package in future.
Next Steps
The Bill has passed through the first of the three parliamentary stages through which it must travel before it becomes law. The final two stages (which include the Bill being approved by the Scottish Parliament) are expected to have been completed by 25 May 2020. It is expected that the Bill will receive Royal Ascent and become law shortly thereafter.
The provisions of the Bill will automatically expire on 30 September 2020, though the Scottish Government will have the power to extend this date by up to 12 months.
Please visit our Covid-19 Hub to see more commentary on the impact that steps being taken in response to Coronavirus will have on businesses and individuals.
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