Rent and deposits

Increasing the rent

Under the private residential tenancy, you can only increase the rent once every 12 months. To increase the rent you have to give your tenant at least 3 months notice, using the prescribed ‘rent increase notice'. If the tenant agrees to the rent increase it will become payable when notice expires. However, if the tenant doesn't agree to the increase, they can refer the proposed increase to the local rent officer, this has to happen within 21 days of receiving the original notice.

The rent officer will make an order stating the rent payable and from which date that rent will come into force.

Deposits

A deposit is a sum of money paid at the start of a tenancy as a guarantee against:

damage to the property
cleaning bills if the left the property in poor condition
Unpaid bills, for example, fuel or telephone bills
unpaid rent.

The amount that can be charged as a deposit cannot be more than the equivalent of two months’ rent.

Tenancy deposits schemes

A landlord must register a deposit within 30 working days of the tenancy starting.

There are 3 tenancy deposit scheme providers in Scotland:

Once the deposit is registered you have to give your tenants the following information:

The amount of the deposit and the date you received it
The date the deposit was paid into the tenancy deposit scheme
The address of the property to which the deposit relates
A statement confirming that you're registered as a landlord with the local council in which the property is located
The name and contact details of the tenancy deposit scheme provider used.

If you don’t use a tenancy deposit scheme your tenant can apply to the First-tier Tribunal for Scotland (Housing and Property Chamber) either during the tenancy or up to 3 months after it has come to an end. The tribunal can order you to pay your tenant up to 3 times the amount of the deposit and to fulfil the requirements of the tenancy deposit scheme regulations.

Exemptions from the tenancy deposit schemes

Most landlords must register their tenant’s deposits. However, there are a few exemptions:

if the landlord and tenant are family members
life rents
holiday homes
properties used by religious organisations
supported accommodation
a house that is subject to control orders
agricultural and crofting tenancies
where the landlord is a resident
where the ownership of the property changes hands, such as when the property has been repossessed.

Returning the deposit

At the end of a tenancy, you will have to request the return of the deposit as soon as is reasonably possible. You will have to state the amount you think should be returned to yourself and your tenant.

Once the scheme provider receives your request, they will ask the tenant whether they agree with the amount to be returned to them. Tenants must write back within 30 working days to confirm whether they agree or disagree.

If the tenant does not reply to the scheme provider, their share of the deposit will stay in the scheme and you'll receive your share of the deposit.

You tenant can also request the return of the deposit, if they believe that you have applied for the deposit to be returned.

Problems with returning the deposit

A free dispute resolution service should be offered by the tenancy deposit scheme that you have the deposit registered with. You will have to prove why a deposit should be withheld. It’s not compulsory to use dispute resolution service in every case – you're still free to negotiate yourself. However, you’re required to use dispute resolution if it’s requested by a tenant.

If you request a dispute resolution then your tenant must agree to use the dispute resolution also. If they don’t agree to this within 30 working days, the deposit will be repaid in line with the landlord's recommendation.

Disputes will be determined by an independent adjudicator and during the dispute resolution process, the scheme provider will hold onto the deposit until the dispute is resolved. If you and your tenant come to an agreement during this process, the scheme provider will repay the deposit once they’ve received confirmation of the agreement. Once the adjudicator has come to a decision they will notify the landlord, tenant and scheme provider. The scheme will then pay the deposit to each party after ten working days, subject to any review

Renting your property out

Disputes with tenants