A ‘coalition’ of landlord and rental agency representatives has sought expert legal advice on whether the bill violates the European Convention on Human Rights.
Patrick Harvie, the tenants’ rights minister, said he was confident the Bill was beyond challenge when it passed Holyrood.
Tenants’ union Living Rent said the move towards legal action demonstrated landlords’ “utter disregard” for tenants.
The bill was passed 89 to 27 at Holyrood last week and will see rents in the private and social sector frozen for at least six months, with the possibility of a further 12-month extension.
Landlords are still able to increase rents by up to 3% if they can demonstrate increased bills due to rising mortgage rates or other landlord-specific costs.
They are also able to evict tenants, despite the ban, if they can show they are in financial difficulty and need to sell or move into the property.
Social housing organizations do not seem to be part of the legal fight.
Those involved include the Scottish Association of Landlords (SAL), estate agent body Propertymark, the National Residential Landlords Association (NRLA) and Scottish Land and Estates.
Lord Davidson of Glen Clova KC has been commissioned by the group to provide an opinion on whether the legislation breaches the individual rights of landlords in Scotland, alongside a potential breach of the ECHR.
The group said it would consider “all legal options” available if the notice claimed there was a clear violation.
This would likely result in judicial review proceedings in the Court of Session.
John Blackwood, chief executive of SAL, said the move to a legal fight was their “last resort” as the owners “were not being listened to by the Scottish Government”.
He said: ‘This emergency legislation is noble in spirit, but lacks the kind of detail that landlords need reassurance. Uncertainty for landlords only creates ambiguity for tenants, and I don’t think the government appreciates the level of confusion it has now created.
“We have said repeatedly that we are all willing to work with the Scottish government and ministers. It’s a tough time, but that doesn’t excuse ill-conceived legislation that could be the last straw for the private rental sector.
“We are gravely concerned that, in a bid to do something to help tenants, the Scottish Government has overlooked the underlying tensions in the PRS that we have been warning about for years.”
Ben Beadle, Managing Director of NRLA, added: “Tenants across the country are already facing a supply crisis in the PRS. Far from improving matters, a rent freeze will mean less choice for tenants, making it harder for them to access the housing they need.
“A viable and thriving PRS is essential to a healthy housing market. Unfortunately, the actions of the Scottish Government undermine this objective and will ultimately hurt tenants the most.
Private rents in Scotland have risen by 10% for a two-bedroom house over the past year, 25% over the past five years and 43% over the past 10 years, and now stand at £915 per month, search by location Citylets real estate site.
In Edinburgh, a two-bedroom house is on the market for an average of £1,225 a month, up 17.7% year on year.
The equivalent in Glasgow is now £1,087 a month, up 14.9% on last year.
Aditi Jehangir, spokesperson for Living Rent, said the decision to reverse the freeze was a show of landlords thinking they have a “right to unchecked profit” and don’t care about their tenants.
They added: “When we see landlords and letting agents throwing their toys out of the pram when they can no longer continue to take advantage of renters without restraint, it confirms our belief that regulation is essential. We clearly cannot trust them to do the right thing.
As yesterday’s CityLets report shows, landlords’ pursuit of profit is pushing tenants to breaking point.
“Rent control needs to be in place as soon as the rent freeze ends, otherwise we have seen that landlords will simply raise rents the moment they cease to be regulated, pushing tenants into poverty.”
A Scottish Government spokesperson said: “The Cost of Living (Tenant Protection) Bill addresses the cost of living crisis by increasing protection for tenants, including student tenants, from evictions. and rent increases. The measures will initially apply until March next year. We will keep their impact on the broader real estate market under review during this time.
“The legislation has been carefully crafted to balance urgently needed protections for tenants with important safeguards for landlords who may also be hit by the cost crisis and face financial hardship.”