How can I increase the rent?
Tue 16 Jun 2015
A common question asked by landlords is how do I increase the rent? There are four ways to increase the rent under an assured shorthold tenancy. Firstly by virtue of a valid rent review clause in the tenancy agreement. Such a clause must be fair and reasonable. Clauses which allow for large increase will usually be considered void by the courts. Such a clause could be challenged by referring it to the rent assessment committee.
The second option is to obtain agreement with the tenant. Any such agreement should be recorded in writing and signed by all parties. Such an increase will be less open to challenge if the tenant has received something in return eg. been allowed to stay longer in the property or double glazing or central heating has been installed. It is important that the tenant agrees to the new increase. The landlord cannot simply write to the tenant telling them that the rent will be increasing.
The third option is to use a formal procedure set out in section 13 of the Housing Act 1988. A prescribed form must be used and served on the tenant. At least one months notice must be given. There is no need for the tenant to reply to this notice, the rent increase will automatically take effect. This option can only be used once every 12 months and only after the fixed term has ended. If the tenant feels that the rent increase is too high they can refer the matter to the rent assessment committee.
The final option is to end the existing tenancy agreement and sign a new one with the new proposed rent. This can only be done once the fixed term has come to an end.
Good communication is very important when considering any rent increase. Landlords should ensure that the tenant is fully aware of what is happening and the reasons for the proposed rent increase.
January 2015View older stories >
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