Rent increases for private residential tenancies

From 1 April 2024 until 31 March 2025, there were temporary regulations for rent adjudication. [1]

While the regulations were in force, rent officers could not set rents higher than a landlord's proposed increase. The permitted increase was calculated based on a taper formula, up to a maximum of 12%.

The temporary regulations have now expired. After 31 March 2025, when a rent increase notice is referred to Rent Service Scotland, the rent officer will set the rent at the open market rate. This can be higher than the landlord's proposed increase.

The landlord must serve a Rent-increase Notice that:

• is in the prescribed form

• states the rent that will be payable when the notice takes effect

• states the day on which the increase is to take effect – this must be at least 3 months after the date the notice is received by the tenant

This procedure can only be used at 12-month intervals. It cannot be used within 12 months of the date a new increased rent took effect, either by virtue of a previous application of this procedure, or by agreement between the landlord and tenant. [2]

During the period of the notice and before the proposed new rent is due to take effect, the tenant and landlord can negotiate a different rent.

To challenge the proposed rent increase, a tenant can refer it to a rent officer by applying to Rent Service Scotland. [3]

This must be done within 21 days of the receipt of the Rent-increase Notice.

The rent officer must determine the rent payable based on the open market rent.

The rent officer must then issue a provisional order stating the rent which the rent officer proposes, including any sum attributable to services. [4]

Both landlord and tenant have 14 days from the date this is issued to request a reconsideration. If this is requested, the rent officer must reconsider before making the final order.

The rent officer will then issue an order stating the rent payable from the effective date.

The effective date is either: [5]

• where there is 14 or more days until the date the original increase was due, then the original date still applies

• where there is less than 14 days until the date the original increase was due, then the effective date is next rent date falling 14 days after the rent officer’s decision

The rent officer may, within 14 days of the final order, remake it for the purposes of correcting any errors. [6]

A rent officer or tribunal can determine an open market rent by comparing the property with those of a similar type in the vicinity. The legislation tells the decision maker to consider that the property in question would be let ‘by a willing landlord to a hypothetical willing tenant’ and that it: [7]

• would be a private residential tenancy

• beginning on the date the rent would have been increased

• under the same terms as the tenancy in question

The following must be disregarded:

• any positive effect on the rental value of the tenant’s or previous tenant’s improvements

• any negative effect on the rental value caused by the tenant failing to comply with terms of the tenancy

Rent officer and tribunal rent decisions must be made publicly available along with details of the rents they have considered when making decisions: [8]

• Rent officer decisions

• First Tier Tribunal rent decisions

Where either the landlord or tenant are unhappy with the rent set by the rent officer they may appeal to the First Tier Tribunal Housing and Property Chamber. [9]

The appeal must be made within 14 days of the date the order is made.  

The application can be made on Form H and it must state: [10]

• the name, address and registration number (if any) of the tenant or landlord

• the name, address and profession of any representative of the tenant or landlord

• the name and address of the other party to the private residential tenancy

• the reason why the applicant is appealing against the rent officer’s order

It must be accompanied by:

• a copy of the rent officer’s order

• a copy of the Rent-increase Notice

And be signed a dated by the tenant or landlord or their representative.

The tribunal must determine the open market rent and the rent payable according to the rent adjudication formula, and will make an order stating the amount payable and the effective date. [11] The effective date is:

• where the tribunal makes its order on or before the original effective date, then the original effective date; or

• the first payment date falling on or after the day on which the tribunal order is made.

The timing of the decision may mean that the matter is not resolved until after the original proposed date for the rent increase.  

The legislation sets down who is liable for any under or over payments: [12]

• if the new rent is less than the old rent then the landlord is liable to recompense the tenant for any over-payment accrued during the period of challenge

• if the new rent is more than the old rent then the tenant must pay this shortfall to the landlord

The tenant has 28 days from the effective date to make good any liability. If they fail to do so, any liability not yet repaid can be considered as arrears.

While awaiting the outcome of any challenge, tenants should put an amount covering the increase aside in case they are liable for the increased rent.

The right to review the tribunal decision is limited to where there is a need to correct a minor error in the order.

There is no right to appeal to the Upper Tribunal in private residential rent determination cases. [13]