Rent increases - for landlords & tenants
There are a number of ways your landlord can increase your rent, as long as they follow the correct procedure; and if you are unhappy with the new rent, you can challenge it.
For private tenants, the easiest and most informal way you can increase the rent, as the landlord, is by agreement with your tenant. You can simply inform your tenant in writing or verbally (without any formal procedure), and if your tenant agrees, then the new rent starts from the date agreed. Agreeing to the new rent does not necessarily mean that your tenant must inform you that they have agreed to the new rent. Once the tenant has made the first payment of the new rent, then they have agreed to it, regardless of whether they are unhappy about it, and perhaps intended to challenge it later.
Alternatively, if the tenancy is a periodic one (because the fixed term has ended, or otherwise), you can give your tenant a new tenancy agreement that has the new rent. If the tenant signs the new agreement, then the new rent starts as stated in the agreement. If the tenant refuses to sign the new agreement, you may explore other options including evicting the tenant.
Where the tenant is still within their fixed term contract and the contract has a rent review clause, which sets out the procedure for rent increase, then you must follow that procedure to increase the rent. In some cases, even if the fixed term contract has expired, you may still have to follow the rent review procedure.
As the tenant, you can challenge the rent increase if the landlord has failed to follow the rent review procedure.
The rules for increasing rent are different if you are a protected or 'regulated' tenant. It is based on a 'fair rent'. We have discussed this in a different article.
By statutory notice
You can give the tenant formal notice to increase rent known as a 'section 13' notice. But this only applies to periodic assured or assured shorthold tenants, or where the tenancy agreement does not have a rent review clause or the clause is no longer effective. There are strict rules regarding a section 13 notice, and it is extremely important that you comply fully with the rules, otherwise, as the tenant, you can challenge the rent increase on the basis that the notice is not valid. We would normally advise that you seek specialist legal advice before serving a section 13 notice.
Challenging a section 13 notice
As stated above, you can challenge a section 13 notice on the basis that it is not valid. You can also challenge it if you generally disagree with the new rent, for instance, because it is too high. You must do so by applying to the First-Tier Tribunal within a certain strict deadline. The Tribunal will either make a decision on paper (without a hearing) on at a hearing, and their role is to determine whether the rent can be increased, and if it can, what will be the appropriate rent.
A note of warning if you are challenging a section 13 notice; we have dealt with cases where the Tribunal has granted a higher rent than the new rent being proposed by the landlord. This is because the Tribunal considers a number of factors including the market rent in the general locality before making a decision. We would therefore advise that you seek specialist legal advice if you have received a section 13 notice
If you are unhappy with the decision of the First-Tier Tribunal, in some cases, you may be able to appeal to the Upper Tribunal. This can be very complex and would require specialist legal advice.
How we can help
Our specialist solicitors with many years experience can advise both landlords and tenants with regards to either increasing rent or defending such increase, including cases involving protected or regulated tenants. We can help you negotiate a rent increase or represent you at the Tribunal if necessary. We offer an initial free consultation.
However, we would advise that you contact us before you make any move to either increase the rent or challenge it, so that you don't get it wrong and complicate your case with unnecessary cost implication.