Rent increase procedure with no clause in AST?

by Readers Question

15:23 PM, 26th June 2017
About A year ago

Rent increase procedure with no clause in AST?

Make Text Bigger
Rent increase procedure with no clause in AST?

I have discussed an increase in rent with one of my tenants. They have verbally agreed (and are indeed very happy as they thought the increase would be more!) This particular tenant has been with me for 5 years and I have not increased the rent during that time. There is no clause relating to rent increase in the AST (which was drawn up by the original managing agent).

The NLA suggests a letter detailing the increase, signed by myself and the tenant, with a copy given to the tenant, will suffice, but I’m also aware there are forms that can be used.

Is there any risk in simply using a letter, as opposed to one of the government forms?

Many Thanks!

Ann



Comments

Neil Patterson

15:27 PM, 26th June 2017
About A year ago

Hi Ann,

From the .Gov site >> https://www.gov.uk/private-renting/rent-increases

" 5. Rent increases

Your tenancy agreement should include how and when the rent will be reviewed.

There are special rules for increasing protected (sometimes known as ‘regulated’) tenancy rents.
When your landlord can increase rent

For a periodic tenancy (rolling on a week-by-week or month-by-month basis) your landlord can’t normally increase the rent more than once a year without your agreement.

For a fixed-term tenancy (running for a set period) your landlord can only increase the rent if you agree. If you don’t agree, the rent can only be increased when the fixed term ends.

General rules around rent increases

For any tenancy:

your landlord must get your permission if they want to increase the rent by more than previously agreed
the rent increase must be fair and realistic, ie in line with average local rents

How your landlord must propose a rent increase

If the tenancy agreement lays down a procedure for increasing rent, your landlord must stick to this. Otherwise, your landlord can:

renew your tenancy agreement at the end of the fixed term, but with an increased rent
agree a rent increase with you and produce a written record of the agreement that you both sign
use a ‘Landlord’s notice proposing a new rent’ form, which increases the rent after the fixed term has ended

Your landlord must give you a minimum of one month’s notice (if you pay rent weekly or monthly). If you have a yearly tenancy, they must give you 6 months’ notice."

Annie Landlord

16:28 PM, 26th June 2017
About A year ago

Thanks Neil. I had already seen that. Hence my question: is there any risk in using one or the other? i.e a simple letter, or the Gov form? As I've never raised a rent for a tenant in situ I thought fellow landlords who have might share their experiences of one method over another.
Ta!

Gunga Din

11:14 AM, 27th June 2017
About A year ago

Up until recently I had only done this twice in situ in many years. After writing to the tenant explaining and justifying the increase (sounds as if you're past this stage), I send the official form (Form 4?) as belt and braces, to formalise the agreement, and ask them to sign a copy to return to me (in an accompanying stamped addressed envelope). I also send a revised standing order form for them to give their bank.

Gunga Din

Lyndon Whitehouse

14:43 PM, 27th June 2017
About A year ago

Hi Ann
If you're a member of NLA they actually have their own forms on line to use. They're quite straight forward to use

Ian Cognito

17:21 PM, 27th June 2017
About A year ago

I issue a new 12 month AST every year, which is when I might increase the rent. The mechanism for calculating an increase is clearly set-out within the existing Agreement.

In practice, I find it useful to be able to refer to the mechanism when needed, even though I often increase the rent by less or not at all.

Of course, the tenant can choose not to accept the increase, and I can choose not to renew the Agreement.

Annie Landlord

17:46 PM, 27th June 2017
About A year ago

Reply to the comment left by "Lyndon Whitehouse" at "27/06/2017 - 14:43":

Thanks Lyndon. Yes, I think the form on the NLA website is the best way to go. I do find the form confusing though. Point 3 asks for 'the first rent increase date after 18th April 2003' and point 4 asks for 'the starting date for the new rent will be'. Surely those dates will be the same? The guidance notes are slightly confusing!

Thanks also Ian, but I don't wish to issue a new ast

Mervin SX

1:36 AM, 28th June 2017
About A year ago

Reply to the comment left by "Annie Landlord" at "26/06/2017 - 16:28":

Annie,

Following the Section 24 changes, I have had to raise rents for in-situ tenants who were in 'periodic tenancy' - i.e. they were outside the fixed terms specified in the tenancy agreement. In this instance, I used Form 4 from the GOV website - https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/471846/Form_4_-_Eng.docx

I used the same date as the answers to questions 'The first rent increase date after 11th February 2003' and 'The starting date for the new rent will be'.

Hope this helps.


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

HS2 accelerating Birmingham's potential into its grand future

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