Definition of rent

Rent is compensation to the landlord for the possession of the property during the term of the agreement. It is also an acknowledgement made by the tenant of the landlord's title (to the property).

The level of rent may determine the kind of tenancy the occupier has and thus the rights of the tenant/occupant. For example, a tenancy with a rent of less than two thirds of the rateable value of the property is excluded from the security of the Rent (Scotland) Act 1984. Similarly, tenancies at a very low rent are excluded from being an assured tenancy under the Housing (Scotland) Act 1988.

It is important to know what payments are 'lawfully due' to the landlord as a term of the written or verbal tenancy agreement. If payments that are lawfully due are not made then there would be a breach of a term of the tenancy and the landlord may obtain possession and/or a claim for payment.

Rent is an essential element in the creation of a tenancy. If there is no provision for rent in an agreement, then the contract is not a lease. [1]

Rent must be an identifiable amount or be capable of being identified. This need not be a payment in money but may be a payment in kind, eg the giving of belongings or the performance of services. This definition must be compared with the meaning of rent for the purposes of the Rent (Scotland) Act 1984 and Housing (Scotland) Act 1988.

Rent is not defined in the legislation. In England it has been held that rent is the total monetary payment to be paid to the landlord as rent. This may include payments that can be attributed, for example to water rates, services or other amenities. [2] For the purposes of the Acts, rent has to be quantifiable in monetary terms. This may include payment to the landlord in goods and services if it has been agreed that they represent a certain monetary value. [3] The monetary payment must be intended as rent and not for some other purpose. For example in one case the court decided that payment for all the fuel consumed at a property shared with the owner was not rent. There was no express agreement stating that these payments were to be rent. [4]

If there is a written tenancy agreement it is important to check whether it contains any clauses about the rent. Some agreements define rent for that tenancy and may include other payments to the landlord such as maintenance charges or heating charges. If the rent is defined to include other payments, the total payment is the rent due to the landlord. Other payments are still payments due under the lease and can form the basis of an action for repossession as a breach of an obligation of the tenancy, albeit not rent arrears.