Section 13 Rent Increase

Durban

One of my young family members has been renting a property for the past 3 years 

The fixed tenancy will expire at the end of June and it will go onto a contractual periodic tenancy 

For the past couple of years , about 2 months before the end of the tenancy the agent will ask them to sign  a new fixed tenancy agreement with a rent increase which they have been happy to do. 

However , this year they will be moving out at the end of October. 

The agent will pressurise them to sign a new fixed agreement and I have advised them not to be pressured and let it go periodic and when it’s time to move out in October, give them the one months contractual notice that they need to give. 

I am a landlord myself and have read through the tenancy agreement and the only way the rent can be increased is with a section 13 notice after the fixed period at the end of June or with their agreement. 

The landlord has not been a good one and wants to spend as little money as possible and questions every single repair and always raises the rent by quite a bit each year 

My question is this. Can a tenant refuse to pay the Section 13 rent increase even if the form and notice is served correctly and just carry on paying the old rent ? 

Getting a Section 21 at the end of June will be fine as they are moving at the end of October anyway so that does not worry them

What worries them is an even bigger rent increase at the end of June as they are refusing to sign a new AST and then having to pay this big increase for the few months that they have left that they can I’ll afford

I know about the rent tribunal but that won’t be an option as no matter how big the increase it will probably still be market related as the rents have shot up in  area where they are 

So, in a nutshell, can they just carry on paying their old rent until they move out or is it binding ? 

Many thanks 

canaldumidi

Durban said:

One of my young family members has been renting a property for the past 3 years 

The fixed tenancy will expire at the end of June and it will go onto a contractual periodic tenancy 

For the past couple of years , about 2 months before the end of the tenancy the agent will ask them to sign  a new fixed tenancy agreement with a rent increase which they have been happy to do. 

However , this year they will be moving out at the end of October. 

The agent will pressurise them to sign a new fixed agreement and I have advised them not to be pressured and let it go periodic and when it’s time to move out in October, give them the one months contractual notice that they need to give.

Excellent advice.

I am a landlord myself and have read through the tenancy agreement and the only way the rent can be increased is with a section 13 notice after the fixed period at the end of June or with their agreement. 

The landlord has not been a good one and wants to spend as little money as possible and questions every single repair and always raises the rent by quite a bit each year 

My question is this. Can a tenant refuse to pay the Section 13 rent increase even if the form and notice is served correctly and just carry on paying the old rent ?

Of course the T can refuse, provided they understand they will be in rent arrears......

Getting a Section 21 at the end of June will be fine as they are moving at the end of October anyway so that does not worry them

What worries them is an even bigger rent increase at the end of June as they are refusing to sign a new AST and then having to pay this big increase for the few months that they have left that they can I’ll afford

A S13 notice served as soon as the periodic tenancy started (beginning of July) would not take effect till a month later (start of August).
I know about the rent tribunal but that won’t be an option as no matter how big the increase it will probably still be market related as the rents have shot up in  area where they are 

So, in a nutshell, can they just carry on paying their old rent until they move out or is it binding ? 

Many thanks 

Yes it is binding provided served correctly and not challenged at Tribunal.

See notes 14 - 18 on the Section 13 Notice

theartfullodger

They should definitely challenge increase.  Should waste some time and hopefully p**s off any greedy useless landlord.

Durban

Thank you Canaldumidi , that is good to know that it definitely is binding. I wasn’t sure about that , I thought that if they didn’t agree to it still the landlord would possibly give them a Section 21 which wouldn’t matter to them. 

The tenancy will end on the 28th June so the agent needs to be on the ball and serve it correctly on the 29th June so at worst they will pay 3 months of increased rent. I guess if they serve it a day late they will only have to pay 2 months of the increased rent ? 

Artful - yes it is tempting but it is highly unlikely that the tribunal will throw out the rent increase and they will still have to pay it from the time it was due to take effect anyway not the date of the tribunal’s decision

Edit
Also , can the Section 13 be served within the fixed period but only to take place after the fixed period ie served 29th May so rent increase to be paid from the 29th June which will be the first day of the periodic tenancy or can it only be served AFTER the fixed tenancy has ended? 

Thanks very much both of you 

Robbo66

Durban said:

T

Also , can the Section 13 be served within the fixed period but only to take place after the fixed period ie served 29th May so rent increase to be paid from the 29th June which will be the first day of the periodic tenancy or can it only be served AFTER the fixed tenancy has ended? 

yes it can providing the rent increase takes effect after the

• tenancy has become statutory periodic, and

• 'minimum period' following service of the notice has expired

It is quite unusual for a Section 13 to be used for contractual periodic tenancies. You say that your family member has to give a contractual 1 months notice, if contractual then Section 13 is not required only for Statutory periodic.

Does her fixed term become statutory periodic of contractual?

canaldumidi

Robbo66 said:

Durban said:

T

Also , can the Section 13 be served within the fixed period but only to take place after the fixed period ie served 29th May so rent increase to be paid from the 29th June which will be the first day of the periodic tenancy or can it only be served AFTER the fixed tenancy has ended? 

yes it can providing the rent increase takes effect after the

• tenancy has become statutory periodic, and

• 'minimum period' following service of the notice has expired

It is quite unusual for a Section 13 to be used for contractual periodic tenancies. You say that your family member has to give a contractual 1 months notice, if contractual then Section 13 is not required only for Statutory periodic.

Does her fixed term become statutory periodic of contractual?

Are you sure Robb66? I do not think a change can be made/proposed to a tenancy, in this case a CPT (possibly a SPT?) before it exists. For example a tenant cannot serve notice to end a periodic tenancy before that tenancy has started (ie during the fixed term). So similarly I believe the LL cannot serve a S13 during the fixed term.

Happy to be corrected if there is precedent or other evidence.

OP seems pretty sure it's a CPT:

I have advised them not to be pressured and let it go periodic and when it’s time to move out in October, give them the one months contractual notice that they need to give.

but I agree this may be in doubt.

OP - what is the exact wording in the contract?

I also agree that in most cases a CPT would make allowance for rent increases, but where it does not, a S13 can be used. OP said

I am a landlord myself and have read through the tenancy agreement and the only way the rent can be increased is with a section 13 notice after the fixed period at the end of June or with their agreement. 

So I assume either the contract is silent (hence OP says: "the only way the rent can be increased is with a section 13 notice"), or the contract makes specific reference to a S13 Notice.

OP - which is it?

Robbo66

canaldumidi said:

Robbo66 said:

Durban said:

T

Also , can the Section 13 be served within the fixed period but only to take place after the fixed period ie served 29th May so rent increase to be paid from the 29th June which will be the first day of the periodic tenancy or can it only be served AFTER the fixed tenancy has ended? 

yes it can providing the rent increase takes effect after the

• tenancy has become statutory periodic, and

• 'minimum period' following service of the notice has expired

It is quite unusual for a Section 13 to be used for contractual periodic tenancies. You say that your family member has to give a contractual 1 months notice, if contractual then Section 13 is not required only for Statutory periodic.

Does her fixed term become statutory periodic of contractual?

Are you sure Robb66? I do not think a change can be made/proposed to a tenancy, in this case a CPT (possibly a SPT?) before it exists. For example a tenant cannot serve notice to end a periodic tenancy before that tenancy has started (ie during the fixed term). So similarly I believe the LL cannot serve a S13 during the fixed term.

Happy to be corrected if there is precedent or other evidence.

OP seems pretty sure it's a CPT:

I have advised them not to be pressured and let it go periodic and when it’s time to move out in October, give them the one months contractual notice that they need to give.

but I agree this may be in doubt.

OP - what is the exact wording in the contract?

I also agree that in most cases a CPT would make allowance for rent increases, but where it does not, a S13 can be used. OP said

I am a landlord myself and have read through the tenancy agreement and the only way the rent can be increased is with a section 13 notice after the fixed period at the end of June or with their agreement. 

So I assume either the contract is silent (hence OP says: "the only way the rent can be increased is with a section 13 notice"), or the contract makes specific reference to a S13 Notice.

OP - which is it?

according to shelter yes unless i misunderstood what they are saying

https://england.shelter.org.uk/professional_resources/legal/costs_of_renting/rents_and_rent_increases/rents_and_rent_increases_for_assured_and_assured_shorthold_tenancies#title-5

canaldumidi

Robbo66 said:

canaldumidi said:

Robbo66 said:

Durban said:

T

Also , can the Section 13 be served within the fixed period but only to take place after the fixed period ie served 29th May so rent increase to be paid from the 29th June which will be the first day of the periodic tenancy or can it only be served AFTER the fixed tenancy has ended? 

yes it can providing the rent increase takes effect after the

• tenancy has become statutory periodic, and

• 'minimum period' following service of the notice has expired

It is quite unusual for a Section 13 to be used for contractual periodic tenancies. You say that your family member has to give a contractual 1 months notice, if contractual then Section 13 is not required only for Statutory periodic.

Does her fixed term become statutory periodic of contractual?

Are you sure Robb66? I do not think a change can be made/proposed to a tenancy, in this case a CPT (possibly a SPT?) before it exists. For example a tenant cannot serve notice to end a periodic tenancy before that tenancy has started (ie during the fixed term). So similarly I believe the LL cannot serve a S13 during the fixed term.

Happy to be corrected if there is precedent or other evidence.

OP seems pretty sure it's a CPT:

I have advised them not to be pressured and let it go periodic and when it’s time to move out in October, give them the one months contractual notice that they need to give.

but I agree this may be in doubt.

OP - what is the exact wording in the contract?

I also agree that in most cases a CPT would make allowance for rent increases, but where it does not, a S13 can be used. OP said

I am a landlord myself and have read through the tenancy agreement and the only way the rent can be increased is with a section 13 notice after the fixed period at the end of June or with their agreement. 

So I assume either the contract is silent (hence OP says: "the only way the rent can be increased is with a section 13 notice"), or the contract makes specific reference to a S13 Notice.

OP - which is it?

according to shelter yes unless i misunderstood what they are saying

https://england.shelter.org.uk/professional_resources/legal/costs_of_renting/rents_and_rent_increases/rents_and_rent_increases_for_assured_and_assured_shorthold_tenancies#title-5

Hmmm... thanks for that Robbo. Shelter does indeed say:

• a notice of increase can be served during the fixed term of an assured or assured shorthold tenancy, but the rent increase must take effect after the:[10]

  • tenancy has become statutory periodic, and

  • 'minimum period' following service of the notice has expired

(but not contractual periodic? which this may or may not be...). But I'm still dubious.

For example, Shelter also says:

To be enforceable, a rent review clause need only contain the mechanism for increasing the rent. It does not need to specify by how much and when the rent will increase.[5] Thus, a non-specific clause such as 'the rent will be reviewed by the landlord in April of each year, and the landlord will give the tenant four weeks' notice of the revised amount payable' will suffice.

and I'd take issue with that too! I agree that "a rent review clause need only contain the mechanism for increasing the rent" but I do not agree that " 'the rent will be reviewed by the landlord in April of each year," is a 'mechanism'! The clause should either specify the amount of increase, or specify a quantifiable mechanism which allows both parties to calculate and anticipate the increase eg by reference to the CPI, RPI or some other fixed amount.

If Shelter can be wrong about this, they may be wrong about the S13 during the fixed term........

Or maybe I need to re-think my whole uderstanding of tenancy law (which would make the stickie even worse than time is making it....)

theartfullodger

IMHO it can be served in fixed term but not take effect before 12 months from start of fixed term.

Just challenge it!  Free!

canaldumidi

theartfullodger said:

IMHO it can be served in fixed term but not take effect before 12 months from start of fixed term.

Just challenge it!  Free!

and then let us (me) know!

Robbo66

@ canaldumidi

I am in agreement with you, if a contractual periodic I believe a section 13 would be invalid and cannot be relied on for a rent increase, Section 13s are for statutory periodics only, the OP does mention a contractual 1 months notice and s13 so this needs clarifying for the correct advice to be given

@ theartfullodger

absolutely yes, the OP should challenge the rent increase but if it is contractual they would have already agreed to a rent increase when they signed the tenancy, providing of course its a decent agreement and not like the absolute shocker i had in front of me last week