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Scotland

Type of tenancy

Before advising on rent increases it is first necessary to establish what type of tenancy is held. The tenancy could be contractual assured, statutory assured, short assured or a private residential tenancy. These tenancies are subject to 'market rents', which in theory should be regulated by market forces and the availability of other rented accommodation in the area.

This content applies to Scotland

Contractual assured tenancies

For assured tenancies the rent for the property is that agreed between landlord and tenant. During the lifetime of a contractual assured tenancy the rent cannot be changed other than by agreement of the parties or by operation of a rent review clause. [1]

The lifetime of a contract establishing an assured tenancy is the original term agreed, for example, one month. At the end of that term the contract continues by operation of the legal doctrine known as tacit relocation. Tacit relocation continues the contract, for example, for another month, unless the contract has been validly brought to an end. A contract validly brought to an end is one where a valid notice to quit has been served, or in some cases where an irritancy clause has operated to end the tenancy. [2]

During the lifetime of the contract the rent can be increased by agreement or by operation of a rent review clause. [3] A rent review clause is a clause in a tenancy agreement that determines how and when rent may be increased. [4] The exact nature of the clause will depend on the agreement, but rent review clauses in a contractual assured tenancy will continue to be valid during any statutory assured tenancy arising at the end of the contractual tenancy.

A 'rent review' clause may even control increases in any subsequent statutory periodic phase of the tenancy. Review clauses may govern the rate of increase, frequency of increase, or both. In addition there is nothing to stop a fixed-term tenant from agreeing to a new rent.

Statutory assured tenancies

Statutory assured tenancies arise when the contract has been brought to an end. [5] A notice to quit will normally have to be served. Only after a statutory assured tenancy is in place can the statutory scheme be used to increase the previously agreed rent. See the section on Assured tenants - rent increases.

Private residential tenancies

Rent can only be increase once in any 12 month period and the correct process must be used.  See the section on Private residential tenancy - rent increase

Last updated: 4 December 2017

Footnotes

  • [1]

    s.24 Housing (Scotland) Act 1988

  • [2]

    Royal Bank of Scotland v Boyle 1999 HLR 63

  • [3]

    s.24(5) Housing (Scotland) Act 1988

  • [4]

    s.24(5) Housing (Scotland) Act 1988

  • [5]

    s.16(1) Housing (Scotland) Act 1988