A Comprehensive Guide to Selling with a Tenant in Situ

If you’re a landlord in Scotland and you’ve been thinking about selling your rental property, especially one with a sitting tenant, now might be the right time to act with the help of an estate agent.

Tenants play a significant role in determining the attractiveness of your property to potential buyers, particularly during viewings, if they are under a tenancy agreement that offers stability. Properties with dependable, long-term tenants can often be more appealing, as they provide immediate rental income and reduce the risk of vacancy periods. It's essential to understand your tenants' rights and obligations, which can impact the selling process and your negotiations with buyers.

With the Scottish Government recently announcing the removal of the rent increase cap, many landlords are reviewing their options, including attracting potential buyers who may be interested in taking advantage of the current market conditions. Should you increase the rent for your tenants? Hold on and wait? Or sell now while the market is still strong?

A tenancy agreement, including the conditions of a lease, is a crucial document that establishes the terms and conditions between landlords and tenants. It outlines the responsibilities of both parties, including rent payments, duration of tenancy, and maintenance obligations. Having a comprehensive tenancy agreement in place can protect landlords and tenants from potential disputes, especially in times of legislative changes such as the removal of the rent increase cap. Ensuring that your tenancy agreements are up-to-date and compliant with current regulations is essential in safeguarding your property investment and maintaining a harmonious landlord-tenant relationship.

In this blog, we’ll explain what’s changing in the law, how it affects you, and how we can help you decide the best route for your situation - whether that’s selling with a tenant in situ or keeping the property and maximising your income.

What’s Changed in Rent Legislation?

As of 1st April 2025, the Scottish Government will remove the temporary rent cap that had been in place since the pandemic. This means:

• There is no longer a maximum limit on how much you can increase rent.
• If a tenant appeals to Rent Service Scotland (RSS) or the First Tier Tribunal (FTT), the rent will be set at open market value - even if that’s higher than what you’ve proposed.
• You must still give 3 full months' notice before a rent increase.
• Rent can only be increased once every 12 months per tenancy.

So, if your property has been under-rented due to previous restrictions, you now have an opportunity to bring it in line with current market value - potentially increasing your income significantly.