AST rent reviews

AST rent reviews

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

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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


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Comments

Industry Observer

11:45 AM, 25th October 2014, About 10 years ago

Let me tidy all this up

There are 5 ways to make a rent increase - rent escalator clause at start, mutual agreement during, s13 when periodic, commercial style rent review clause, renewal new agreement at end of fixed term.

Next what do you do on periodic? Nothing with the money all three schemes now say it is protected permanently, though with some you may have to pay another fee. Once the Deregulation Act comes in some periodic situations it may be the case that if you have done TDP initially that is it and you do not need to repeat. And you will get 90 days a la Localism Act and its 30 days to tidy up any not protected.

This relates to tenancies going periodic after the TDP came in, as per Superstrike.

But be careful and wary there is still a lot of discussion going on about the exact clauses in DA and just what they will correct and give an amnesty for if tidied up within the 90 days. The outcome may not be as complete and clear and solve all problems as we would have liked.

Until the DA comes in, re-serve PI when going statutory periodic and a renewal has always necessitated re-protection (depends what your scheme wants/demands in its rules) and re-serve PI.

On the actual query and why DPS are saying what they are, they are correct to - but only recently!! This is because they amended their initial requirements in the latest July 2014 version of their Scheme Rules so once lodged with them it is always lodged and there is no need to do anything. Mind with DPS you never did need to do anything re the money, but they have now enshrined this in their rules.

Same for The Dispute Service

While browsing through them as your week-end reading have a look at new rule 24C

With Mydepositssome other schemes you still have to press buttons, tell them of the periodic start date

Romain Garcin

13:45 PM, 25th October 2014, About 10 years ago

Reply to the comment left by "Industry Observer " at "25/10/2014 - 11:45":

"With Mydepositssome other schemes you still have to press buttons, tell them of the periodic start date"

Which means that if you don't within 30 days you're done for. Same if you do not pay any required fee on time.

Ie. it is not protected permanently by all schemes and you do have to do something.

Industry Observer

14:12 PM, 25th October 2014, About 10 years ago

As I said Romain as far as re-registering the deposit is concerned it depends what the scheme wants. Far as I am aware you don't even have to put the date it went periodic on for Mydeposits but as I don't believe in any of the insured schemes just DPS Custodial I am not as familiar with their requirements.

Romain Garcin

15:49 PM, 25th October 2014, About 10 years ago

Reply to the comment left by "Industry Observer " at "25/10/2014 - 14:12":

My point is that the legal requirement is not to "re-register", it is to comply with the scheme's initial requirements.
So if a scheme says that when a fixed term AST ends and is replaced by a statutory periodic AST the landlord must update a status on their website or pay a fee, to me that an initial requirement (which, if not complied with will lead to the protection to lapse): If this is not done within 30 days then the deposit will not be properly protected, hence up to 3x penalty and no s.21 notice until deposit is refunded.

Industry Observer

13:36 PM, 26th October 2014, About 10 years ago

I think we are in semantics land here Romain and really saying the same thing.

Two things must happen within the 30 days - compliance with initial requirements of the Scheme and service of PI.

Because the Statute requires compliance with scheme rules then I'd say that is a legal requirement as to comply with the Statute you also have to comply with scheme rules.

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