How to ask agent to remove unfair rent review clause from 1year AST before signing

by Readers Question

7:08 AM, 28th January 2015
About 4 years ago

How to ask agent to remove unfair rent review clause from 1year AST before signing

Make Text Bigger
How to ask agent to remove unfair rent review clause from 1year AST before signing

I’ve just been sent a 1 year Assured Short hold Tenancy to review before we sign and move in 2 days. It has a 6 month rent review clause that I think is unfair and not just because its every 6 months. What is the best way to ask the agent to remove it? They know we don’t have time to find another house and so have us over a barrel.

“Rent Reviews
The landlord reserves the right to review the rent on a six monthly basis and /or when the tenancy is
renewed. The landlord may elect to increase the rent to bring it in line with the current market rent of
similar properties in the area.”

I think this clause is unfair. It’s the word “may” I have issue with. They “may” bring it into line with current market rent they “may” double it or triple it, there is no limit. It needs some min /max percentages in or something not mention it should be yearly at the end of the fixed term. There is no time limit either they can raise the rent in 6 months time and every 6 months after that.

This place was on the market for a long time before they reduced the price so I’ve a gut feeling the agency will want to put it back up asap. Especially as they charge fees for everything they can think of. We signed the for the annual £120 charge for a new contract every year when we gave the holding deposit and agreed to the list of fees but I think this means they’ll demand the fee every 6 months when they print a new contract with our new 6 monthly rent increase.

I want the clause removed. How do I go about it while avoiding being homeless in two days?

Any advice greatly appreciated

Jamesunfair



Comments

Sally T

9:49 AM, 28th January 2015
About 4 years ago

Ask the agent to change the 6 months to 12 months rent review (the landlord can increase the rent after this time anyway), if the property has been empty for a long time they will be keen to fill it so may agree straight away.
You don't have to agree to the new rent, you can negotiate, but once you've paid the new amount once you are bound to keep paying it.

Ian Narbeth

12:17 PM, 28th January 2015
About 4 years ago

In practice the Landlord can review after 12 months because that is when the tenancy ends.

If you have quoted the whole of the rent review clause, it is woefully defective from the Landlord's point of view. The phrase "on a six monthly basis" is not very precise. The phrase "and /or when the tenancy is renewed" is otiose because if the lease is renewed a new tenancy will be signed. There is no mechanism for implementing the review, for giving notice of any proposed increase. There are no assumptions - are you valuing new 12 month tenancies? There is no mechanism for disputes to be determined. All in all, not a great piece of drafting.

Are you paying a rent substantially below market rent? If not, it is unlikely that rents will double in 6 months. That said, the uncertainty is not nice to have.

As Sally T proposes, try to negotiate a 12 month review. Alternatively, ask for a break clause for a period of 21 days after the new rent is agreed or determined. Failing that, if you have to sign the lease as is, you have some legal points you can take if the agents try to implement the review.

Ian Cognito

12:29 PM, 28th January 2015
About 4 years ago

Hi James.

This is the sort of practice that gives organisations, such as Shelter, ammunition to fire at landlords.

As there is no standard AST, a draft should ideally be sent out to genuine prospective tenants BEFORE requesting the commitment of a holding deposit. In practice, this is not always workable and, of course, a naive landlord could be strung along by someone wanting to keep their options open.

When I last let a property to a new tenant, the holding deposit (1 weeks rent, returnable in the event of a failed reference) was transferred directly to me the same day. Had the prospective tenant objected to any terms within the agreement, I would have taken a view as to whether or not the deposit should be returned and a new tenant found.

As to offering you advice, a few things spring to mind.

1) Ask the agent if the 6-month rent-review term can be taken out. If not, sign the agreement anyway.

2) Is a damages deposit being taken and, if so, will check-in be done professionally with a proper inventory? If you have any doubts, make sure you take your own photos and notes. Also, DO NOT sign the inventory without reading and checking that it's an accurate description of what you're renting.

3) Once you are moved in, contact either ether Citizens' Advice or Shelter and talk to them about your experience.

4) Assuming that you do not feel comfortable with the managing agent and/or the agreement you have signed, start looking for a new property no later than 2 months before the 6-month break clause or 12-month end of agreement.

Good luck, and remember that you're searching for a good landlord and/or managing agent and not just a good property.

All BankersAreBarstewards Smith

12:49 PM, 28th January 2015
About 4 years ago

since you are only 2 days away from signing - cross out the relevant clause, sign it clearly alongside the crossed out clause - send it back.. this then puts the ball firmly in the landlords/agents court...... they wont want to lose you as a tenant if the property has been on the market for a long time

i bet they wont even notice you have done it.....

if they then sign it.... that signifies that they agreed to your alteration.....

Romain Garcin

18:51 PM, 28th January 2015
About 4 years ago

Another vote for crossing out the clause. If it was not discusses and agreed before then it has nothing to do in the agreement anyway.
I also agree that this kind of strong-arm tactic gives a bad name to landlords/agents.

That being said, IMHO that clause is most likely completely ineffective.

James MacDonald

20:01 PM, 28th January 2015
About 4 years ago

Thanks for all your replies.

The clause is copy pasted exactly as is. The agency is the main brand of the 3rd largest property group in the UK. So its not some cowboy, it's an industry leader.

On a side note the "independent" referencing company also belongs to that group and so does the contents insurance company who magically rang us up the day after we put down a holding deposit and tried to strong arm my girlfriend into a policy. They knew our names, the house address and the address of the agency, moving date, everything. Rang the agency to complain and they denied all knowledge and blamed the reference company for selling our details. I didn't know then that they're all the same huge property group and we're now on some central database somewhere. If I were a hacker I'd forget the tech companies like Sony and Microsoft. I'd go for one of these property groups. I bet their security is a lot weaker and they have scans of passports, driving licenses, proof of address and all the financial details for a full credit check.

Similar property rents in the postcode are between £965 and £1350. We're nearer the low end but I think it was on before for £200 more before they reduced it. Of course they won't double the rent. I was just saying theoretically the way the clause is worded they could. I'm just worried landlord obviously thinks its worth more as it was advertised for more before and in 6 months time we'll find ourselves paying the 20% more he thinks it is worth instead of what the market (me) has just agreed to rent it for. Like those introductory credit card rates lower for the first few months to get you in the door and then they bump it back up.

Anyway, re the rent clause. I replied yesterday to the email that we were happy with all but that one clause. I said it was worded ambiguously and biased towards the landlord. Note that we can't negotiate a "decrease" if markets go down, there is no notice period. I found a guidance document called "Office of fair trading Guidance on unfair terms in tenancy agreements" quoted bits of that and some bits I found on the gov.uk and ARLA websites. Reasonable arguments as to why it should not be included and is an unfair clause.

Especially as they have already told us they won't let us roll into a periodic tenancy and will renegotiate the contract every year and have told us the fee already. It just seems a bit of a pointless clause.

They've not replied yet. I guess if its still there when we sign I'll cross it out and initial it. I have the emails to say we didn't agree to it before signing and despite repeated requests for a copy the contract they sent it too late for us to find any alternative.

Thanks again. I'll post if they remove it or not.

All BankersAreBarstewards Smith

21:28 PM, 28th January 2015
About 4 years ago

in the depths of my brain I seem to think that it is only legally possible to increase rent once every year......

All BankersAreBarstewards Smith

21:36 PM, 28th January 2015
About 4 years ago

""For a monthly, weekly or fortnightly tenancy one month’s notice of the intended increase is required. For a yearly tenancy, a period of six months' notice is required before the increase can be put into effect.

The date on which the new rent is required must not be earlier than a year after the date when the rent was last increased using a section 13 notice. If a new tenancy is in place then the date should not be any earlier than a year after the date when the tenancy started. ""

copy and pasted from https://www.tenancyagreementservice.co.uk/rent-increases

Gary Nock

8:58 AM, 31st January 2015
About 4 years ago

Won't let you roll into a Statutory Periodic Tenancy from an AST? Well I don't think so. If you want to remain on an SPT you can BUT you lose security of tenure as you then are subject of Section 21 Notice procedure (two months notice) As stated above a Section 13 Notice of Rent Increase is required for the increase. I quite like the striking out of the offending clause. But be careful of the dubious practice of substituting another unaltered page for the one where you have struck out the clause. If the agent doesn't ask you to ensure you initial the altered clause AND the bottom right of each page.

Ian Cognito

11:00 AM, 31st January 2015
About 4 years ago

Reply to the comment left by "Gary Nock" at "31/01/2015 - 08:58":

Hi Gary

To help prevent "page substitution" I insure that all pages are numbered and the bottom of every of page is signed by tenant and landlord.

I always sign against changes as initialing is so open to abuse (though the rest of the world seems fine with it!.).

1 2

Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

RLA call on banks to end Benefits discrimination

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More