Help - Rent increase rules

MisterB1959

i have just agreed a rent increase with a tenant via emails. its the first rent increase in the 18 months they have been there, there is a clause in the lease that mentions rent increase,


The rental amount will be reviewed annually but fixed at the amounts stated above during the term of this Assured Shorthold Tenancy.


they asked for a 12 month tenancy and I asked for a 1.6 % rise = £11.60 per month, from April which was (very quickly) accepted by the tenant.


the point is that had the tenant not accepted, or challenged its legality I would simply have not agreed a new 12 month lease and issued a section 21 to start to gain possession.


so ANY tenant has an option, to put it harshly, its stay or pay, which sadly IS open to exploitation

G_M

MisterB1959 wrote: »

i have just agreed a rent increase with a tenant via emails. its the first rent increase in the 18 months they have been there, there is a clause in the lease that mentions rent increase,


The rental amount will be reviewed annually but fixed at the amounts stated above during the term of this Assured Shorthold Tenancy.

Your point regarding S21 and evicition is well made.

Your clause in the contract is completely unenforcible. To be useful it must make clear how much the rent will increase as well as how often, eithr by reference to an amount (£X.00 pm) or a rate (eg RPI)

G_M

You could also contest the timing:

will increase each year from the first Rent Due Date more than 364 days after the commencement of the Term,

so it can only increase on the anniversary of the tenancy start date - Sept.

But as already discussed, that again raises the issue of whether the increase can be automatic (so you are in arrears) or needs to be notified before it applies (as I contend).

jjlandlord

G_M wrote: »

But as already discussed, that again raises the issue of whether the increase can be automatic (so you are in arrears) or needs to be notified before it applies (as I contend).

Why would the tenant need to be notified if the clause clearly states when the increase occurs and by how much?

It may be a good idea for the landlord to remind the tenant that the increase is about to occur, but that reminder is not what triggers the increase.

kinger101

If I was the tenant, given the landlord hasn't raised rent in the past, I'd be inclined to just accept the £25 rent increase which in my opinion seems more than fair. OK, it's more than July 2014 RPI, but it's probably much less that I might have been paying had the landlord raised my rent every year.

To not accept the raise might provoke the LL to

(a) start the eviction process; or
(b) start claiming for potential arrears; or
(c) make sure the follow the contract to the word and raise your rent every year by RPI

I can see they are concerned about another potential raise in September 2015, but as this really seems more of a belated adjustment for prior years, this is somewhat misplaced argument. And see my point (c) above.

Pixie5740

MisterB1959 wrote: »

so ANY tenant has an option, to put it harshly, its stay or pay, which sadly IS open to exploitation

It's not that open to exploitation. Yes a LL can increase the rent or issue a Section 21 but even with the increase the rent still has to be in line with other rents in the area for similar properties. There's a point at which if my LL increased the rent beyond I would vote with my feet and leave him to a void period and possibly LA tenant finder fees too.

MisterB1959

Pixie5740 wrote: »

It's not that open to exploitation. Yes a LL can increase the rent or issue a Section 21 but even with the increase the rent still has to be in line with other rents in the area for similar properties. There's a point at which if my LL increased the rent beyond I would vote with my feet and leave him to a void period and possibly LA tenant finder fees too.

of course you could vote with your feet, but there is a cost of moving, in monetary terms, including new deposit (as youre unlikely to get any current deposit back BEFORE you have moved and it could be several days after) which will need to be paid before you move in. there is also the issue of 'hassle' and inconvenience.


things break when being moved, inc washing machine bearings etc so it could become quite expensive for both sides !!


as for my 'clause', I know its probably un-enforceable, if the tenant said no, it only gives me the same issue as if the clause was enforceable and they said no to the rise and they intend (eventually) moving out so as not to pay it


I am a private landlord, my rents are just above HB prices and the properties are well maintained, with two being completely renovated ( a council support worker even asked why I did them to the standard I did when they were being rented!) and I have a waiting list if any of them become vacant.


to me the most important thing is communication, I explain the clause, tell them it will be based on CPI, I notify them of the amount of rise 3 months before its due and so far (albeit for only a couple of years) haven't had any issues yet

Argghhh

i thought your post was very well put, its ok to say that the tenant does not have to agree and they can walk away - fine - someone else will rent it from you, the rent can be increased slightly more to cover any void period and the new tenant will be paying for it
you can always offer a xmas goodwill reduction to the new tenant if they pay over the odds than you required

Pixie5740

MisterB1959 wrote: »

of course you could vote with your feet, but there is a cost of moving, in monetary terms, including new deposit (as youre unlikely to get any current deposit back BEFORE you have moved and it could be several days after) which will need to be paid before you move in. there is also the issue of 'hassle' and inconvenience.


things break when being moved, inc washing machine bearings etc so it could become quite expensive for both sides !!

Tenants always need another deposit in the chamber since we never know when we'll next have to move. Thankfully I live in a more civilised part of the UK where letting agencies aren't allowed to charge us fees.

I've never rented a flat, or seen one to rent in the places I've lived that does include white goods such as washing machines so I've never had to move one. I've got moving down yo a fine art now anyway after voting with my feet after a crappy couple of landlords.

My point was that there's only so much rent a landlord can charge either by increasing the current tenant's rent or for charging more rent to new tenants.

My landlords are providing me with a service and if I'm not happy with that service they're not getting my money.

thoughtful_fox

jjlandlord wrote: »

Why would the tenant need to be notified if the clause clearly states when the increase occurs and by how much?

It may be a good idea for the landlord to remind the tenant that the increase is about to occur, but that reminder is not what triggers the increase.

I'm not sure it is cut and dried. Are you sure it is permitted under the law to put an automatic rent increase into a tenancy agreement?

Even so, if there has been no attempt to enforce the clause then it has clearly been waived - the LA/LL have continued to accept the lower amount for months. The following is from a solicitor's website:
"For a waiver to come into existence, the person who forfeits legal rights must do so in an informed way, without duress and through words (verbal and written) or through conduct implying a waiver has come into existence."


In general, I am prepared to accept fair increases in rent. I'm reluctant in this case because maintenance of the property has been poor. The LL takes no interest in the upkeep and does the bare minimum. The rent is currently in line with the market in this area. Although arguably other properties I have seen at the same price should be more expensive as they have central heating.

Also, I believe the increase is not at the request of the LL, but is the agent's idea. The agent described how they were increasing the rent on every property they manage by the same amount and at the same time - not assessing each property individually. Hence my comment that it is an arbitrary increase. The LL is very 'hands off' - which is fine.

I'm going to pay the increase but I want to protect us from future increases not in line with the agreement.