Increasing Your Tenants Rent Legally
Has your tenant been on an assured periodic tenancy for some time now and you want to put up the rent? This is quite a common issue for landlords and which is why it prompted UK lawmakers to introduce a Section 13 Notice in the Housing Act (1988).
When coming up with a figure for the rent increase, landlords must bear in mind that the new rental figure must make the property in line with typical rents in the locale and for similar sized properties. This is described in the Housing Act as a ‘fair and realistic’ rent.
Other Ways a Landlord Can Increase Rents
There are two other methods a landlord can deploy to increase a tenant’s rent. The first is to speak to the tenant and where the rent can be agreed my mutual arrangement. The amount and the date at which the new rent is to start should be drawn up as an agreement on paper and both parties provided with a copy.
Rent Review Clause
A tenancy agreement can include a clause which states that the landlord has the right to increase the rent after a set period of time eg after 12 months on a two-year fixed tenancy. It can also be used in a contractual periodic tenancy (and in which case Section 13 can’t come in to play).
How to Serve a Section 13 Notice
In order to increase the rent without the agreement of your tenant then you have to serve a Section 13 on him or her. This means filling out Form 4 and giving it to the tenant.
You can only serve a Section 13 notice once a year and, only for a periodic tenancy. It can only be served once every 12 months. The minimum notice period for tenancies that are fortnightly or weekly is one month. For annual tenancies you will have to give six months’ notice.
The new rent figure must start on the beginning of a rental period so your tenant isn’t days – or worse – weeks, out.
Mistakes to Avoid (Form 4)
You only get one chance to fill out a Form 4 within a 12-month period, so make sure you do it properly – otherwise it can be thrown out. Some of the more common mistakes landlords make are:
- Applying for a second within 12 months of the first Section 13 Notice.
- Mis-spelling the names of the tenants
- Only one landlord signing and dating the Notice when there are joint landlords
- Using the wrong notice period
The Notice itself can be posted, hand delivered by the landlord or given by an Agent (unless otherwise stated).
What Happens Next?
If the tenant accepts the rent will go up and pays the new rate at the next due date then the matter is resolved.
If the tenant disagrees he or she can lodge this with the first-tier tribunal (Property Chamber). This must be done before the next rent is due. The tribunal can rule in the landlord’s favour, deem a different rent should be due or make the rent lower in the tenant’s favour.
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