Nine months on from their introduction in October 2022, many landlords are still seeking advice on whether their circumstances will satisfy the ‘financial hardship’ eviction grounds, thus allowing them to avoid the eviction moratorium.
The relevant grounds are Ground 1A of the Housing (Scotland) Act 1988 and Grounds 1A and 4A of the Private Housing (Tenancies) (Scotland) Act 2016.
The Cost of Living (Tenant Protection) (Scotland) Act 2022 contains a non-exhaustive list of examples of what types of evidence might be submitted to prove a landlord is experiencing financial hardship. Those are:
(a) a letter of advice from an approved money advisor or a local authority debt advice service,
(b) a letter of advice from an independent financial advisor,
(c) a letter of advice from a chartered accountant,
(d) an affidavit stating that the landlord has that intention.
In the current economic climate, it is unsurprising that many landlords wish to take steps to sell their rented properties to prevent future financial hardship. However, unless the landlord is already experiencing financial hardship, it may be difficult to rely on the exempt grounds – despite those being introduced as a safeguard for landlords.
In the recent decision of Choudry v Petre (FTS/HPC/EV/23/0060), the Tribunal granted an eviction order under Ground 1A of the 2016 Act, on the basis that the landlord intended to sell the property to alleviate financial hardship. In that case, the Tribunal considered a letter from the landlord’s lender stating the mortgage balance of over £92,000 was overdue, required to be paid in full and stating the matter was ‘urgent’. It did not appear that any calling up notice had been served. Further correspondence indicated that the lender had not yet confirmed what steps they would take if the property was not sold. Nonetheless, the Tribunal in this case deemed the correspondence sufficient to evidence financial hardship and granted the eviction order.
On the face of it, the decision appears promising for landlords. However, it is worthy to note that the tenant in this case did not challenge why the landlord intended to sell the property. She also explained to the Tribunal that she would be given priority by the local authority only when an eviction order was granted against her.
Furthermore, a decision of the First-tier Tribunal does not bind another First-tier Tribunal, meaning different members remain able to reach their own decisions as to what evidence is required to constitute financial hardship.
Until the Upper Tier Tribunal consider the matter, each tribunal can take its own view on interpretation of the legislation. Landlords seeking to rely on the financial hardship grounds should continue to be prepared to disclose detailed financial information and be able to provide at least one of the above examples before proceeding to seek eviction to alleviate financial hardship.
For more information or advice, contact our team.
