Short assured tenants - rent and terms

The Cost of Living Act [1] has temporarily repealed a short assured tenant's right to determine a reasonable rent [2] at the First-tier Tribunal for Scotland. The repeal lasts until 31 March 2024.

The advice on this page will only be relevant if the right is revived. Unless the Scottish Parliament legislate further, this right will revive on 1 April 2024.

A short assured tenant may refer the rent to the First Tier Tribunal Housing and Property Chamber for a determination of the rent that the landlord might reasonably be expected to obtain under the short assured tenancy. [3] Only one application can be made. [4]

However, when advising clients, advisers will need to be aware that given the limited security of a short assured tenant, the legislation may be of limited use. The landlord will be able to apply for a court order to recover possession at the end of term of the tenancy. [5]

The application must be made on a prescribed form. [6] Tribunal can only set a rent if it considers there are enough assured tenancies in the locality with which to compare the property, and if it feels that the existing rent is significantly higher than rents for other such properties. [7]

The First Tier Tribunal can refuse the application to determine a market rent on the basis that it cannot apply the criteria. The tribunal can determine a new rent that it considers could reasonably be obtained under the tenancy. [8] This may be lower than a rent for an assured tenancy, reflecting its more limited security. If a new rent is determined, the tribunal will decide the date from which it is to take effect.

From the date of the tribunal determination, the landlord will only be able to recover the amount set by them. After a year, the landlord can apply under section 24 of the Housing (Scotland) Act 1988 to increase the rent. If section 24 is not applicable (ie because the tenancy is still in the fixed term) then the landlord will not be able to increase the rent except by coming to a new agreement with the tenant.

The rent fixed by the First Tier Tribunal will take effect from a date decided by the tribunal, which cannot be earlier than the date of the application. [9]

This procedure is intended for use by landlords who need to change the terms of a tenancy once it has become a statutory tenancy. If the changes in the terms of the agreement merit a change in the rent then this can be proposed by the landlord or the tenant at the same time. Even if there is no proposal for a change in the rent, if the application goes to a First Tier Tribunal and the tribunal varies other terms of the tenancy, it can determine a new rent reflecting these. The rent could go up or down. [10]

The procedure can only be used in the first 12 months of the statutory assured tenancy. [11] The landlord or the tenant may serve a notice (AT1), [12] proposing a variation in the terms of the tenancy. The notice will take effect three months from its date of service, unless it is referred to the First Tier Tribunal.

Appeals to the First Tier Tribunals must be made on a prescribed form, AT3. [13] When making its determination. the tribunal must make decisions on any other proposed variations to the tenancy before determining a market rent. Any rent determined will then take into account those variations. Any rent increase will take effect from the date decided by the tribunal, but cannot be earlier than the date specified in the notice.

If a landlord proposes variations and a rent increase under section 24, the First Tier Tribunal can consider these together.

For more information, please see the page on the First Tier Tribunal Housing and Property Chamber.