Rent increases for private residential tenancies

A specific procedure must be followed when a landlord wants to increase the rent in a private residential tenancy. The rent may only be increased in accordance with the legislation.

This content applies to Scotland

Procedure

Section 22 of the Private Housing (Tenancies) (Scotland) Act 2016 defines rent increase procedures:

  • The landlord must serve a Rent-increase Notice and this must be in the prescribed form [1]

  • The notice must specify the rent that will be payable when the notice takes affect

  • The day on which the increase is to take effect.

  • The date specified must be at least three 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.

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.

Determination of open market rent

In deciding whether to challenge a rent increase it is useful to be aware of how an open market rent is defined. Any determination is made on the basis 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: [2]

  • 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 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 First Tier Tribunal rent decisions must be made publicly available along with details of the rents they have considered when making decisions. [3] It may be wise to consult this information along with local sources of rent values before deciding whether to refer the rent. Rent officers and the First Tier Tribunal have the power to both to increase or decrease the rent payable.

See the Rent officer - Private residential tenancy - rent decisions.

See the First Tier Tribunal - rent decisions.

Tenants considering whether to challenge a rent increased should be made aware that they may be found liable for the increased amount (or potentially even a higher amount). It may be prudent therefore to put an amount covering the increase aside whilst awaiting the outcome of any challenge.

Referral to rent officer

A tenant who decides to challenge the proposed rent increase can refer the matter to the rent officer based at Rent Service Scotland. [4] (Unless the property is in a rent pressure zone. You can use the Scottish Government- rent pressure zone checker to see if this is the case.)

The referral to the rent officer must be made within 21 days of the receipt of the Rent-increase Notice and must be made on the prescribed form. The prescribed form can be found on the Scottish Government website - Referral by tenant to rent officer

When a referral is received by the rent officer they must first issue a provisional order stating the rent which the rent officer proposes, including any sum attributable to services. [5]

Both landlord and tenant have 14 days from the date this is issued to request a reconsideration. If this is requested then the rent office 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: [6]

  • 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. [7]

Appeals to the First Tier Tribunal

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. [8]

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: [9]

  • 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.

Effect of the tribunal determination

The tribunal must determine the open market rent (as described in the relevant section above) and will make an order stating the amount payable and the effective date. [10] 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.

Liability for over or underpaid rent

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: [11]

  • 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 only 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.

Reviews and appeals

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. [12]

Last updated: 8 May 2019

Footnotes

  • [1]

    s.22(1) Private Housing (Tenancies) (Scotland) Act 2016 and s.3 of The Private Residential Tenancies (Prescribed Notices and Forms) (Scotland) Regulations 2017 - SSI 2017/297

  • [2]

    s.32 Private Housing (Tenancies) (Scotland) Act 2016

  • [3]

    s.34 Private Housing (Tenancies) (Scotland) Act 2016

  • [4]

    s.24 Private Housing (Tenancies) (Scotland) Act 2016

  • [5]

    s.26 Private Housing (Tenancies) (Scotland) Act 2016

  • [6]

    s.25(2) Private Housing (Tenancies) (Scotland) Act 2016

  • [7]

    s.27 Private Housing (Tenancies) (Scotland) Act 2016

  • [8]

    s.28(1) Private Housing (Tenancies) (Scotland) Act 2016

  • [9]

    para.108 First Tier Tribunal for Scotland Housing and Property Chamber (Procedure) Regulations 2017 - SSI 2017/328

  • [10]

    s.29 Private Housing (Tenancies) (Scotland) Act 2016

  • [11]

    s.31. Private Housing (Tenancies) (Scotland) Act 2016

  • [12]

    s.30 Private Housing (Tenancies) (Scotland) Act 2016