Rent Rise on a Periodic Tenancy – Landlords Question

by Readers Question

18:46 PM, 1st March 2013
About 6 years ago

Rent Rise on a Periodic Tenancy – Landlords Question

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Rent Rise on a Periodic Tenancy – Landlords Question

Rent Rise on a Periodic tenancyMy letting agent is saying that I cannot request an increase in rent without switching the tenancy back to a fixed period tenancy from a periodic tenancy.

Is this true and why?

The tenant has been in the property about 3 years with no problems, and the tenancy started on a fixed term; it then went on a periodic basis as no rent increases were issued. I asked the agent to issue a rent increase (to still below market), but the tenant does not want to be on a fixed period tenancy and is obviously balking at the rent increase too!



Comments

20:35 PM, 1st March 2013
About 6 years ago

Quite simply No. Most of mine are periodic with rent reviews.

Mark Alexander

20:49 PM, 1st March 2013
About 6 years ago

Time to change your letting agent!

Of course you can increase your rent, Tessa Shepperson wrote a great article on how here >>> http://www.property118.com/index.php/how-to-increase-rent-the-proper-way/5298/

Mary Edbrooke

23:07 PM, 1st March 2013
About 6 years ago

Thank you Mark for your prompt action and speedy reply. I looked at Tessa Shepperson\'s article and it was very useful. I have been looking for a way to change my expensive agent and try one of your recommended on-line agents.The tenant is threatening to leave if the rent is raised, despite enjoying several years of no rent increases. The agent - really an administrator who handles renewals sitting in a head office far from the property - seems to have little idea about how to negotiate all this other than ask me what I want to do.My goal is to lower the cost of a fully managed let by getting a new lower-cost agent and keep the tenant on a periodic basis at a higher rent. I have to work out how to do this without breaking contracts. I might have to bite the bullet and give the tenant notice if they refuse to agree to a rent increase, but reluctant to do this due to high cost of changeover and void.Many thanks,Mary

Mark Alexander

23:22 PM, 1st March 2013
About 6 years ago

Hi Mary

I do hope you manage to get things sorted with your existing tenant as the risk of a void period and redecorating to get your property into tip top condition for re-letting needs to be seriously considered and weighed against the amount of rent increase you are considering. How many months would it take to recover lost rent and costs if your tenant was to move out?

Paying them a visit with a bunch of flowers often works wonders. Tell them about the problems you are having with your agent and explain that you are considering giving them notice. See what their reaction is to that first. Then go on to explain why you think a rent increase is justifiable. If possible show them evidence of what comparable properties are now fetching.

Make sure you check any exit arrangements on your contract with your letting agent before you serve notice though.

If you can't agree on a new rent level and you decide it is viable to serve notice on your tenants then do your best to keep them on-side. Explain that you will give them 2 months notice from the day before the next rent due date and also offer to refund their deposit plus £100 if you can re-let the property within a week and that you will need their help to achieve that.

If it does come to this and they agree to be helpful start marketing the property straight away and ask them whether they would mind you organising a viewing day in a few weeks time.

Stagger the viewing every 10 minutes and only allow one lot of people in at a time. Nobody ever turns up on time so make sure you have a second person to answer the door. This person can then explain that you are showing somebody else around and keep the next people waiting. DO NOT allow lots of prospective tenants to have roam free around the property as that's a recipe for disaster if something goes missing.

The above strategy will show that the property is in high demand and is also very time effective.

If you get lots of people who want the property, narrow it down to a few you like best, explain that you have lots of interest and ask them to make you their best offer, subject to full referencing of course.

I hope this helps.

Good luck and please keep us updated on how you get on.

1:17 AM, 3rd March 2013
About 6 years ago

The problem here is; if your tenant is not bothered about their credit rating they will just say f---- you; i won't be paying anymore rent and now you have a lengthy process to evict me.
If you do NOT have RGI the tenant is in control; not you.
This is where LL are fundamentally ignorant; they think they control the tenancy;.....................wrong the tenant does.
If however you have RGI on the tenant, the LL controls the tenancy.
I would terminate my relationship with the LA and self-manage and keep the rent the same.
You could of course obtain RGI on the tenant now and if they pass; you can propose a rent increase and if they refuse; you just say; fine I will be evicting you if you refuse to leave.
Tenant says no evict me then; you say OK, submit the RGI claim.
Tenant stays in until evicted, you get paid you rent by the RGI conmpany
Job done.
Possibly bother with a CCJ but register tenant with LRS.
With RGI you are in charge; without the tenant is!

Industry Observer

8:27 AM, 4th March 2013
About 6 years ago

@Paul

Be careful in your advice Paul however well meant and intentioned. Like all insurance you cannot just take it out and then make an immediate claim - try insuring your house and then burn it down next day and see what happens.

From memory on RGI it is 3 months before you can make a claim. Which is why RGI is useless on very short term tenancies.

Mary in terms of the rent increase if it is reasonable and justified which it must be if they have not had any increase in 3 years then why should the tenant object to it?

In terms of the agent they are talking complete and utter nonsense. A periodic tenancy if an AST has the rent increased by a 13(2) notice

16:47 PM, 4th March 2013
About 6 years ago

The advice received from your agent is incorrect. There is no need to enter into a new tenancy. What is needed is to serve a notice of increase under sec 13(2) of the Housing Act 1988. You have to use the statutory form and give the appropriate notice. If the tenant doesn't agree the increase they can refer the case to the local rent assessment committee.

9:29 AM, 5th March 2013
About 6 years ago

If you have a good tenant that pays the rent, be happy, is it worth losing them for a bit more rent?If they move out, or worse, stop paying, you may wish you had let it be, I very rarely increase rent on paying tenants.As of the 1st of April 2013 empty properties in North East Lincolnshire are exempt council tax for only 1 month, landlords are already offering the 1st months rent FREE, it’s going to be a bun fight in April, I think they are running out of things to tax.

5:08 AM, 6th March 2013
About 6 years ago

Industry Observer; yes absolutely agree with your contention.
My recent claim occurred after 3 months.
No policy excess as paid extra premium.
You make an important point about RGI claiming.
But my RGI company has a 90 day claim period.
So tenant moves in and pays rent and deposit.
The following month the tenant states they won't be paying rent anymore.
I say fine.
I submit the claim say 65 days later
This means a claim has been submitted 3 months after the AST has commenced.
I am based on your info going to check with my RGI company how long is allowed before I may submit a claim.
I don't think there is a 3 month period before a claim may be submitted; but you have raised an important point and I don't know the answer.
I don't like not knowing about that for the RGI company I use.
Thanks for highlighting the issue.


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