"in an upwards only fashion" rent review

Tom99

I read it as an automatic increase with no need for notice as the method of calculating the next years rent is already defined in the agreement. Depending how close to a review date the monthly RPI figures are produced will determine how far in advance of the review date the new rent can be calculated.

AnotherJoe

Unless you really like the property I’d insist on it being removed. It’s entirely superfluous as written since it’s contradictory, confusing and in theory you could even take action against the landlord if he decided to raise the rent by 1% rather than 3% since he’s breaching his own conditions !

In practice it’s more likely to mean an annual tussle whereby they raise the rent by at least 3% and you point out rents have fallen and they point out they can’t fall and you threaten to leave, (except that has a cost to you as well), etc etc

davidmcn

RedDwarf82 wrote: »

Basically while "review" makes some people unsure, or say it's optional, the use of "_will_ review" and specially the "minimum" and "in an upwards only fashion" moves any doubt on the basis of the implicit intention of the writer.

Yes, perhaps "rent review" is jargon and it should really be "rent increase" - "review" suggests some chin-stroking or potential for debate, but here it's just a mechanical bit of arithmetic to be done.

Now, if the intention of the writer is putting love and hard work in writing a very specific piece of legal text... on the basis that the landlord can always ignore it and propose a 2%... I guess people do more strange things than that.

The landlord can give concessions in the same way that they could choose to ignore any other clause in the lease (where it would benefit the tenant).

my only remaining problem is with the lack of a clause in the agreement specifying how a rent increase needs to be notified. I mean, as far as I can see the landlord can send me a letter the day before saying only "this year the rent will increase the RPI"... and leave me with just a few hours to find out myself the RPI, calculate the new rent, and amend the standing order. Would you consider reasonable a request to include such a clause? (https://www.gov.uk/government/publications/model-agreement-for-a-shorthold-assured-tenancy includes it in B6.3)

But that's where the amount of the proposed new rent can't be predicted by the tenant. Here the method of calculation is already set out, so the tenant is just as able as the landlord to work out what the new rent is (subject only to possible rounding errors). It would of course make practical sense for the landlord to remind the tenant of the increase and how much they're expecting next month.

rtho782 wrote: »

Why would a landlord even want this clause, given that without it they can increase rent by as much or as little as they like anyway?

Only in the sense that they can propose a new rent and the tenant can choose to reject their proposal and continue the existing tenancy (at the risk of being kicked out at the earliest opportunity). Here both parties have already agreed what the increase will be.

RedDwarf82

davidmcn wrote: »

But that's where the amount of the proposed new rent can't be predicted by the tenant. Here the method of calculation is already set out, so the tenant is just as able as the landlord to work out what the new rent is (subject only to possible rounding errors). It would of course make practical sense for the landlord to remind the tenant of the increase and how much they're expecting next month.

I am talking under the suposition G_M, and the agent, is right when saying

this is a 'review', so as the agent says, the LL may decide not to increase at all.

So I will *not* know the new rent until they tell me if they have decided to increase it or not. There are two possible new rents: the same one, or an increased one. To start with this raises the question... if I don't get notice of a rent increase, does it mean the rent will not increase? And what I want to definitively avoid is getting a notice just the day before. I should be contractually protected from getting a rent increase notice with less than... a week?

davidmcn wrote: »

Only in the sense that they can propose a new rent and the tenant can choose to reject their proposal and continue the existing tenancy (at the risk of being kicked out at the earliest opportunity). Here both parties have already agreed what the increase will be.

They can always issue a Section 13 notice, no?

To be clear... the clause is quite silly.
No, I don't agree to a rent linked to the RPI. It would be stupid, the RPI is not designed to measure the rents in the local market. If I agree to this agreement it will be under the supposition the agent is right when saying the rent increase is optional. And that the landlord will try to agree to lower than 3% rent increases if that's the market value. The moment he stops doing this I will leave... I know it, he knows it.
At the end of the day all the tenants and landlords in the world do implicitly agree to a rent increase linked to the local market rents. There is no need to specify this in the tenancy agreement.
The landlord knows I will leave if he increases it too much. I know the landlord can kick me out with 2 months notice/at the end of the fixed period if I don't agree to a rent increase linked to the local market that I will pay anyway if I have to move to a different property.

davidmcn

RedDwarf82 wrote: »

I am talking under the suposition G_M, and the agent, is right when saying
So I will *not* know the new rent until they tell me if they have decided to increase it or not.

No, in this context "review" means it will happen (because the clause says that as a minimum it's going to up by 3%). And in practice I expect the landlord will tell you (at the very least immediately after you send them the "wrong" amount!).

At the end of the day all the tenants and landlords in the world do implicitly agree to a rent increase linked to the local market rents.

Not sure that's necessarily right - in a large proportion of cases the rent doesn't regularly increase during a tenancy and landlords only bother getting an uplift when the property is readvertised.

However I agree that a landlord expecting an RPI increase (particularly with a collar of 3%) is a bit unrealistic.

steampowered

I would ask to remove the minimum 3% annual increase as that is unreasonable in an environment where inflation is running at less than 3%.

I would leave the rest of the clause as it is - i.e. annual increase in line with RPI subject to a maximum of 7.5%. It is very common in longer leases to have rent review clauses like that which only allow the rent to stay the same or move upwards.

As others have pointed out, this type of clause is only really relevant in longer leases (such as 10 year or 20 year leases, which is more common for commercial property than residential). If either party can terminate the lease after 12 months anyway, the whole thing is open to negotiation after 12 months.

I suspect the landlord has found a lease agreement online, but mistakenly used a lease agreement for long term leases of 5years plus or a commercial property lease (rather than a lease for residential property).

RedDwarf82

steampowered wrote: »

I would leave the rest of the clause as it is - i.e. annual increase in line with RPI subject to a maximum of 7.5%. It is very common in longer leases to have rent review clauses like that which only allow the rent to stay the same or move upwards.

It's a 6 months lease. But unless after the 6 months the landlord agrees to a long lease (like 3+ years) I will just let it roll into a periodic tenancy, so the clause will still apply (but sure, anybody can leave)

steampowered wrote: »

I suspect the landlord has found a lease agreement online, but mistakenly used a lease agreement for long term leases of 5years plus or a commercial property lease (rather than a lease for residential property)

This agreement comes from one of the biggest estate agents in the zone (not that far from London). I have raised the complain and the both the Lettings Manager and Lettings Director (and co-founder) have insisted that the meaning of the clause is that the increase is optional. The Lettings Director said that she called their solicitors to confirm this. Their solicitors apparently come recommended by the Association of Residential Letting Agents.

Given that different people have conflicting opinions I will pass this to The Property Ombudsman. I have already reached the end of their complains procedure.

And to be clear, I have given them multiple alternatives. From removing the whole clause and let mutual agreements/Section 13 rule the rent increases to any of the three options from the Government model agreement (https://www.gov.uk/government/publications/model-agreement-for-a-shorthold-assured-tenancy)... or other alternatives they could propose. Their answer has always been that the clause says that it's optional, and that no changes will be done to the agreement... take it or leave.
It's one of the only two properties in the catchment area of the school we like, no matter what budget you have, and the other property is too small, so...