They say the average person thinks about sex every 3 seconds. The average landlord thinks about increasing rent every 2 seconds.
There’s going to be a time when every established landlord has to increase rent. Why? Inflation, fluctuating interest rates, newly introduced legal legislations that come with a price tag (e.g. tenancy deposit scheme)
or personal greed.
When can a landlord increase rent?
Check your Tenancy Agreement, because there may be a rent increase clause in there which would have been agreed and signed at the start of the tenancy. The procedure in the agreement should be followed.
If the tenancy agreement makes no provisions for the landlord to make rent increases, then the landlord has two options to increase rent:
- Renew the tenancy agreement at the end of the fixed term but with an increased rent.
- Landlord and tenant can mutually agree on the rent increase, which should be agreed on paper, so there is evidence. Write down the newly agreed rate, and both tenant and landlord should sign the document for the record. This is often referred to as a Rent Increase Agreement.
- Serve a section 13 notice if the tenancy is periodic
Note, the rent cannot be increased during the first fixed term stipulated in the tenancy agreement if there is no rent review clause.
If the tenant disputes the increase, then the landlord can serve a Section 13(2) Notice of the Housing Act 1988, proposing an increase in rent, at the end of the fixed term.
If the tenant is still unhappy with the increase, the landlord can serve a Section 21- Notice of Possession Order Form. This is the legal way for a landlord to gain possession of the property after the fixed term has expired; effectively the tenant is told to vacate.
What is a rent increase form (Section 13)?
The simplest way to make a rent increase is to make a Rent Increase Agreement or by renewing the tenancy agreement. However, failing this, serving a Section 13 Rent Increase Notice would be the next step.
How much can the landlord increase rent by?
Simply, landlords cannot increase rent to any amount- the increase must be “fair” The best way to ensure a fair rate is by keeping it in line with similar properties in the same area. You can do this by talking to local letting agents or looking at the asking prices on property portals like Rightmove.
Section 13 Notice
The Housing Act 1988 provides for a Section 13 Notice to be issued by the Landlord to the Tenant in order to increase the rent after the initial fixed period has expired and the tenancy is in the statutory periodic tenancy, it cannot be used to increase the rent during the fixed term of a tenancy.
It’s also important to note that it cannot be used until 12 months after the start of the tenancy and cannot be used to increase the rent more often than every 12 months.
This route is not available in those cases where the Tenancy Agreement already provides stipulated terms for rent increases.
The Section 13 Notice must provide the following details:
- Details of the Landlord and/or his Agent
- Details of the Tenant
- Details of the Property
- The amount of the increased rent and any other increased charges
- The proposed commencement date
When can the increase begin?
The landlord must serve the section 13 to the tenant, giving the Tenant at least 1 months’ notice where the rent is paid on a weekly or a monthly basis. For a yearly tenancy, a period of six months’ notice is required before the increase can be put into effect.
The rent increase must begin on the same day of the month that the tenancy started. So for example, if the rent for the tenancy is due on the 3rd of every month then the new increased rent should also be due on the 3rd of every month.
Before increasing rent
Increasing rent can cause a lot of problems between tenant and landlord, so be careful before making any irrational decisions. Moreover, the increase MUST be fair; more explained on Increasing Rent.
The Tenant’s options
The amount of increase should be considered in relation to the rental charges for other similar properties in the same area. If increases put the rent well above market rents, the tenant can challenge the increase by refering the case to the Residential Property Tribunal.
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