Assured Tenancies in Scotland - Your Rights and Responsibilities
PART 4: RENTS AND RENT ASSESSMENT COMMITTEES
36. What rent should be paid for an assured tenancy? In assured tenancies the level of rent is negotiated between tenant and landlord and will depend on a variety of factors including the type of house; where it is located; whether it is furnished or unfurnished; its general condition; the services provided by the landlord; and the demand for accommodation in the area. Basically, the rent will depend on what the tenant is prepared to pay and on what the landlord is prepared to accept. In other words, it will be market rent.
But some landlords, for example, housing associations, which will be subsidised, will be able to negotiate rents which are below other assured tenancy rents; in certain circumstances a rent assessment committee can be asked to determine what the market rent would be.
37. What is a market rent? A market rent is simply the level of rent that a landlord would accept and a tenant would pay for the tenancy of the house. It is likely to be close to the rent being charged for similar assured tenancies of similar houses, in similar locations.
38. Can a 'fair rent' be registered for an assured tenancy? No. The registration of 'fair rents' applies only to regulated tenancies, Part VII contracts and tenancies from registered housing associations commencing before 2 January 1989 (see question 3).
39. How can a landlord or tenant find out what the likely market rent is for a house in a particular area? Either landlord or tenant should be able to learn about the usual level of rents in the area by looking at the ,accommodation to let' section of the local newspaper and by making enquiries. In addition, the rent assessment committee keeps, and makes available to the public, information on rents charged for assured tenancies which it collects in performing its duty of determining market rents (see questions 48 and 58).
40. How often should rent be paid and by what method?
This is a matter for agreement between landlord and tenant. Rent may be paid weekly, monthly, annually or for some other period and by cash, cheque or by some other method. The important point is that both tenant and landlord should. be clear about when and how payments should be made. Tenants should be given some form of proof of payment.
41. Must the landlord provide a rent book?
Only if the rent is payable weekly. If the landlord of a tenant who pays rent weekly does not supply a rent book he is liable to a fine of up to £2,500.
42. Does the rent book have to be in a particular form?
No, but under the Assured Tenancies (Rent Book) (Scotland) Regulations 1988 it must contain a notice with the following information:
a. the landlord's name and address;
b. the amount of rent to be paid; and
c. a summary of the basic rights that a tenant has under the Housing (Scotland) Act 1988 as specified in the regulations.
43. Where can rent books be purchased by a landlord?
From law stationers and through most big stationery stores.
44. After a rent level is settled upon between landlord and tenant how can it be changed?
If they both agree, landlord and tenant can settle on a change in the rent at any time: no-one else needs to be involved although either landlord or tenant may wish to seek professional advice. Most written tenancy agreements covering tenancies for a year or more are likely to include a way of changing the rent after a stated period. For example, landlord and tenant might agree to increase rents annually, by the level of inflation or by a certain percentage.
45. Are there any other circumstances in which rents might be adjusted?
Yes. Not every tenadt and landlord will be able to agree on a method of increasing rents and some landlords and tenants may wish to change earlier agreements but cannot agree how this should be done. The 1988 Act therefore lays down three specific circumstances in which rent adjustments can be sought. These are:
A. Within one year of the creation of a statutory assured tenancy (see question 6) either landlord or tenant may propose new tenancy terms and, if he wishes, also an adjustment to the rent to reflect the new terms. A landlord should do so by serving a notice AT I (L) on his tenant. A tenant should do so by serving notice AT 1 (T) on his landlord.
B. The landlord may propose a rent increase to take effect at any time during a statutory assured tenancy though not more often than once a year by serving a notice AT2 on the tenant.
C. A tenant under a short assured tenancy may use form AT4 to apply to the rent assessment committee for a determination of a market rent. The rent assessment committee may then change the rent. Details of where to obtain notices and forms are given on page 32.
46. How much notice of a proposed change in the rent must be given?
A. If the adjustment is in circumstance (A) (adjustment to reflect change of other terms) then a landlord must give 3 months notice.
B. If the adjustment is proposed in circumstance (B) (rent increase during statutory assured tenancy) then the amount of notice depends on the length of the tenancy. If the tenancy is for 6 months or more, then the landlord must give 6 months notice. if the tenancy is for less than 6 months, then the landlord must give a period of notice equal to the full duration of the tenancy, but never less than one month.
C. In the case of circumstance (C) (determination of a rent for a short assured tenancy) the tenant does not have to notify the landlord that he has made an application. The rent assessment committee will ensure that both the landlord and the tenant are given an adequate opportunity to present their views. The rent assessment committee will determine the date on which any new rent is to come into effect.
47. When changes in the rent are being proposed in circumstances (A) and (B) is there an appeal to a third party?
Yes. If the tenant and the landlord cannot reach agreement on proposed changes in these two circumstances, either tenant or landlord has a right to apply to the rent assessment committee, which will fix a market rent.
A. In circumstance (A), the rent assessment committee will not change the rent unless it also agrees to a change in the terms of the tenancy.
48. How do 1 apply to the rent assessment committee?
A. In circumstance (A) if new terms and a rent change are proposed by a landlord the tenant should complete a form AT3(T) and send it to the rent assessment committee within 3 months of the date of the serving of notice AT I (L); if a tenant proposes new terms and a rent adjustment the landlord should complete a form AT3(L) and sent it to the committee within 3 months of the serving of notice AT 1 (T).
B. In circumstance (B) the tenant should complete a form AT4 and send it to the rent assessment committee. This must be done before the date at which it is proposed the rent increase should take effect: this date will be given in notice AT2.
C. In circumstance (C) (application for a market rent determination by a tenant of a short assured tenancy), details of how to apply to the rent assessment committee are given at question 45. Details of where to obtain forms AT3M, AT3 (L) and AT4 and the address of your local rent assessment committee are given on page 33.
49. Does a tenant of a short assured tenancy have a special right to apply to the rent assessment committee?
Yes (see question 45 under circumstance Q.
50. What is the rent assessment committee?
A rent assessment committee is an independent committee, normally of 3 people: a lawyer, professional surveyor and a lay person.
51. What action will the rent assessment committee take?
The rent assessment committee may decide on a market rent on the basis of your written application, and other written evidence, alone. But, more commonly, and certainly if tenant or landlord prefer, they will hold a hearing which is usually in public. The proceedings at a hearing are informal and both sides are given every opportunity to put their case. The committee may sometimes wish to visit the house.
52. How will the committee fix a market rent?
The market rent fixed by the committee will be one which a willing landlord might reasonably expect to obtain for the house if let on the open market on an assured tenancy. The committee will assume that the tenancy is beginning on the date specified in the notice proposing the rent adjustment and that the tenancy terms are as set out in the application to the committee.
In circumstances (A) and (B) the committee will disregard any effect on the rent of the granting of the tenancy to a sitting tenant.
In circumstance (B) the committee will also disregard any improvements carried out by the tenant (unless the improvements were carried out under a tenancy obligation) and any failure by the tenant to comply with any terms of the tenancy.
53. What happens when the committee have made their decision?
Both landlord and tenant will be sent a copy of the committee's decision on the rent. This will include their decision on when the new rent should take effect.
54. Will the rent assessment committee always fix a rent?
No. In circumstance (C) if a tenant in a short assured tenancy applies to the committee because he thinks his rent is too high, the committee will fix a market rent only if they think:
a. there are enough similar houses in the neighbourhood let on assured or short assured tenancies for them to be able to make comparisons; and
b. that the rent being charged by the landlord is significantly higher than he might reasonably be expected to obtain, given the rents for similar tenancies of similar houses in the area.
55. Is there a right of appeal against the committee's decision?
There is no right of appeal against actual rent fixed by the committee, but if you think that the committee's decision was wrong on a point of law you may be able to appeal to the Court of Session to have the decision set aside.
56. Must the landlord and tenant accept the rent assessment committee's decision about the rent?
A.&B. In circumstances A and B if the application to the rent assessment committee is from either a tenant or a landlord in response to proposals made by the other, the landlord and tenant may vary the rent determined by the committee. But neither landlord nor tenant can impose a variation without the other's agreement.
C. In circumstance C if the application to the committee is from the tenant of a short assured tenancy who wishes a rent determination, the market rent determined by the committee will be the maximum the landlord can charge.
57. Does it cost anything to apply to the rent assessment committee?
No.
58. Where can 1 get more information about the procedures of the rent assessment committee?
Full information on the committee's procedures is in a leaflet 'Rent Assessment Committees and Assured Tenancies' which can be obtained from any of the organisations listed on pages 35 and 36.
59. After a rent assessment committee has fixed a market rent what period must pass before a further increase?
One year.
60. Can assured tenants apply for help in paying the rent?
Yes. Any assured tenant who has difficulty in affording his rent may apply to his local authority for housing benefit. Leaflets about housing benefit can be obtained from your local authority. A landlord does not need to be told when a tenant applies for, or gets, housing benefit.