AST rent reviews

by Readers Question

10:15 AM, 20th October 2014
About 4 years ago

AST rent reviews

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AST rent reviews

Probably a straightforward question about rent reviews when a property is let under the usual AST:AST rent reviews

1. If the tenancy has moved into “periodic” mode after the initial lease period, is it possible to undertake a rent review without instigating a new lease?

2. When writing a new lease, is it possible to write in an annual rent review (say normally + 2%) into the lease, to take effect after the periodic period has started so that an annual review of rent always happens? I guess it’s possible that the review may go downwards as well as upwards. Or does one always need a new lease to change the rent?

Thanks

Tim Green



Comments

Mark Alexander

10:21 AM, 20th October 2014
About 4 years ago

Hi Tim

There are three ways to increase rent:-

1) By mutual consent between landlord and tenant - best to get this documented and both to sign. Best arranged over a cup of tea when inspecting a property and agreeing to put right any minor issues in my experience.
2) By serving a section 13 notice. This is very formal which I why I don't like it. You also need to give two months notice. If your relationship with your tenant isn't good enough for point one then you might as well just serve notice at the same time.
3) By starting a new AST. Remember, if you do this you need to reprotect the deposit and re-serve prescribed information.

You also asked whether an AST can include provisions for rent increases such as RPI linked or renbt rising by X% per annum. The answer is yes but you should seek professional advice when drafting such a clause so as not to fall foul of the Unfair Terms in Consumer Contract Regulations "UTCCR".
.

Ian Cognito

14:23 PM, 20th October 2014
About 4 years ago

Reply to the comment left by "Mark Alexander" at "20/10/2014 - 10:21":

With regard to starting a new AST, I'm not sure that your advice, Mark, is quite right. My understanding is that, whilst prescribed information must be re-served, the deposit does not require re-protecting. I have had this confirmed by DPS.

Mark Alexander

14:36 PM, 20th October 2014
About 4 years ago

Reply to the comment left by "Ian Cognito" at "20/10/2014 - 14:23":

I would want that in writing given that it would be a new AST with a new landlord.

The DPS advice may be right but certainly wouldn't be for members of an insured scheme such as MyDeposits or TDS.
.

Ian Cognito

15:18 PM, 20th October 2014
About 4 years ago

Reply to the comment left by "Mark Alexander" at "20/10/2014 - 14:36":

Thank you Mark. If there is a new agreement AND a new landlord, then I am sure it would be impossible NOT to re-register the deposit.

However, the DPS advice related to when an existing landlord (me!) agrees a new AST with an existing tenant, with the deposit held in the DPS Custodial Scheme.

As the advice was received verbally when visiting the DPS stand at The London Landlord & Letting Show, I have now taken your suggestion on board and asked for written confirmation.

Mark Alexander

15:27 PM, 20th October 2014
About 4 years ago

Reply to the comment left by "Ian Cognito" at "20/10/2014 - 15:18":

Hi Ian

I got confused by two similar threads I have been commenting on, the other was new landlord and new agreement due to a sale of a tenanted property.

I think the advice you have been given by DPS re new contract, same property, same landlord is correct. However, that advice would not be correct for the MyDeposits or TDS schemes which have different rules.

Still best to get confirmation in writing though, especially as I'm no expert on the DPS scheme.
.

Barry Moss

20:37 PM, 20th October 2014
About 4 years ago

Hi to all, I am a bit confused now. Are you saying that if a tenancy has gone periodic, then you have to start a new AST if you want to increase the rent? I thought that you could increase the rent, provided it was not more than once in every twelve months. Thanks to everyone, especially Mark, for all the helpful advice Barry Moss

Mark Alexander

9:12 AM, 21st October 2014
About 4 years ago

Reply to the comment left by "Barry Moss" at "20/10/2014 - 20:37":

Hi Barry

No that is not what is being said. Please re-read my initial reply.
.

Ian Cognito

15:44 PM, 24th October 2014
About 4 years ago

Reply to the comment left by "Mark Alexander" at "20/10/2014 - 15:27":

Hi Mark

I now have reply in writing from DPS:

Dear Mr

Thank you for your recent enquiry.

For your information, up until recently, when a tenancy came to an end and moved on to a rolling contract or the tenants signed a new contract, the deposit could just remain with us and no action needed to be taken.

There has recently been a ruling which essentially states that the deposit, in effect, has been returned when the tenancy ends, and that Tenancy Deposit Protection legislation should now apply.

We confirm that the deposit will still be protected, but we are unable to confirm that taking no action will be sufficient to ensure that current legislation is complied with.

We are unable to simply amend the start dates on the deposit or update any of the deposit details if a new tenancy agreement has been signed.

The deposit would need to be repaid and then resubmitted in order to update the tenancy information.

Please ensure that you check the property and confirm there are no breaches of tenancy when repaying and resubmitting the deposit. Any disputes or deductions will need to be agreed and repaid when the deposit is returned. The deposit can be repaid to the landlord to expedite the resubmission process.

You may wish to seek independent legal advice for further information in regards to Tenancy Deposit Legislation.

Yours sincerely
The Deposit Protection Service (The DPS)

As you can see, I am now being told that, to ensure compliance, the deposit will require paying out and then resubmitting..................which is what you said at the top of the thread and I disagreed with!

As a way around this nonsense, I propose discussing with my tenant and suggesting that they sign a short, simple and sensibly worded letter confirming that their deposit should remain securely held with DPS rather than being paid out and resubmitted.

Romain Garcin

16:17 PM, 24th October 2014
About 4 years ago

In my view this is a very convoluted way of suggesting that although the deposit will remain protected by them you may need to do something, ie. give the prescribed information to the tenant again.

However, there is no legal suggestion that the deposit should be paid back and (hopefully) received again.
It seems to be their way of saying that if you want to "re-protect" you would need to have the deposit released then submitted again.

I understand that they can't give legal advice, but as a deposit scheme they really ought to be clearly and more helpful...

Mark Alexander

17:30 PM, 24th October 2014
About 4 years ago

Reply to the comment left by "Romain " at "24/10/2014 - 16:17":

I concur
.

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