Rents deposits and utilities

You need to be aware of the rules governing rent increases and deposits, including the "ring-fencing" of tenants' deposits so that they have to be kept separate from your regular rental income.
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The rent will be the market rent for similar properties in the local area.

The tenancy agreement will fix the rent for an initial period and the rent cannot be increased during this time.

Each rent demand given to the tenant must specify the name and address of the Landlord.

The rent cannot be increased during the initial fixed period.

If you want to increase the rent at a later date in line with market conditions, you can end the tenancy unless the tenant agrees to an increase.

If the tenant does not agree, you can either accept the position or end the tenancy by issuing a Section 21 (Form 6A) notice if the property is located in England or a Section 21 notice for Wales if the property is located in Wales.

If you’re a landlord in Scotland with a private residential tenancy, you can only increase rent once per year. To do so, you must give at least three months notice and use the correct form. If your tenant thinks the increase is unfair, they can apply to the Private Renting Housing Panel to set a fair rent. A private residential tenancy can only be terminated if one of the 18 grounds for eviction apply.

It is a good idea to ask the tenant to pay a deposit at the start of the tenancy to cover cleaning, breakage and damage that may occur during the tenancy.

England

The maximum level of tenancy deposit you can ask a tenant to pay depends on the total annual rent for the property:

  • up to five weeks’ rent if the total annual rent for the property is less than £50,000

  • up to six week’s rent if the total annual rent for the property is £50,000 or above

In England & Wales, deposits taken by landlords of assured shorthold tenancies (with rent up to £100,000 per annum) must comply with the tenancy deposit protection scheme.

The government-backed schemes are:

The schemes contain an Alternative Dispute Resolution (ADR) service which is free of charge. A dispute will only go to court if both landlord and tenant cannot agree to use the ADR service.

Scotland

In Scotland a deposit must not be more than two months' rent.

In Scotland, if you take a deposit from your tenant, it must be paid into an approved deposit protection scheme. This must be done within 30 working days of the tenancy start date. The government-approved schemes are:

Collecting the rent and any additional outgoings will be set out in the tenancy agreement but some practical steps you should consider include:

  • Insurance - ensure that you have suitable cover for letting under both the buildings and the contents insurance. Failure to inform your insurers may invalidate your policy.
  • Bills - arrange your outgoings such as service charges, maintenance contracts and so on, to be paid by direct debit or standing order.
  • Council tax and utilities - arrange for the transfer of the council tax and utility bills to the tenant; take gas and electricity meter readings to ensure that utilities have been paid to date.
  • Telephone - you will probably also want to transfer the telephone into the tenant’s name.
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