Renting your property at the correct price is key to making it work for you, however, it is quite common that as a landlord, you may have fallen into the trap of letting your property to friends or family at much lower than market value, changed your mortgage deal or had some other change in personal circumstances. Alternatively, you may have been managing the property yourself and now wish to use a letting agency like KeyRing Lettings Fully Managed Service. Whatever your reasons for needing to increase your rent there are some points you need to consider before you approach your tenants:
With all Assured Shorthold Tenancies, landlords can increase the rent after the initial fixed period if it is stated in the tenancy agreement or if the tenant agrees (in writing) to the increase.
Check if there is a rent increase clause in the tenancy agreement which would have been agreed and signed at the start of the tenancy.
However, if the increase is not stated in the agreement and the tenants dispute the increase, then landlords are required to follow certain procedures if they wish to increase the rent on the property called a Section 13 notice.
A landlord is required to give the tenant proper notice before a rent increase is to take effect.
For a monthly, weekly or fortnightly tenancy one month’s notice of the intended increase is required. For a yearly tenancy, a period of six months’ notice is required before the increase can be put into effect.
The new rent amount does not change the frequency or due date of the new amount. For example, if the rent for the tenancy is due on the 28th of every month then the new increased rent should also be due on the 28th of the month.
A landlord may not increase a tenant’s rent using Section 13 notice any more than once per 12 month period and no earlier than 12 months after the tenancy started.
What is a Section 13 notice?
- The Housing Act 1988 requires a landlord to issue the tenant with a Section 13 notice if the proposed increase in rent is not stated in the tenancy agreement and the tenant refuses to agree to the increase.
- The form giving notice of an increase in rent is required to be completed by the landlord and contains information on the rent increase and the starting date for the new rent proposed.
- If a landlord decides to increase the rent but does not issue a Section 13 notice then the tenant is not obliged to pay the increase in rent, unless stated in the tenancy agreement.
- If a landlord later tries to gain possession and evict the tenants based on unpaid rent arrears due to the increase, then the rent increases may not be accepted by the courts should it get that far.
A landlord can increase the rent if they wish to after the initial fixed period, providing:
- The tenancy agreement contains information on the procedure for a rent increase
- The landlord gives the tenant the required notice of the intended rent increase
- The landlord provides the tenant with written notice that a change will be made to the terms of the tenancy agreement
- Landlords are unable to increase the rent before the end of the initial fixed period unless this is stated in the tenancy agreement, or both the tenant and landlord agree to the increase in rent.
To find out more about how we can help you manage your property call 01749 681356