Six months' notice of rent increase on a 12-month AST

gelato_cat

Hello, I'm a bit confused about what I've been reading about rent increases.

I've read that if you have a fixed term AST, then the rent stays the same throughout unless there's a rent review clause in there, and even then only if you agree to a rent increase.  At the end of the contract, you either move out, negotiate a new contract (which could be at a different amount of rent) or move onto a periodic tenancy at the same rent until the LL wants to increase it.

However, I've also read that if you are on a 12-month contract, then the landlord needs to give you six months' notice of any rent increase.

Does there have to be a rent review clause in the contract for them to be able to do this?

Say you sign a 12-month AST that begins on 1st January and ends on 31st January, when can the landlord give you the six months' notice that they want to increase the rent?  Can they do this at any time after the contract begins?

Or have I misunderstood all of this completely?  (I was reading the info on gov.uk, the Shelter website and the Citizen's Advice site.)

theartfullodger

Are you agent, tenant, landlord, solicitor?? Does this question involve you??  Which country (eg Wales, England, NI...)

Without seeing (please don't post) the full EXACT wording of the AST it might be difficult to answer your query.

See for general guidance this freely available "sticky" on this sub-forum....
https://forums.moneysavingexpert.com/discussion/comment/67759920#Comment_67759920

gelato_cat

The country is England.

I read the sticky - thanks.  It doesn't mention the six-month notice.

Here's one of the pages I was reading that mentions the six-month notice.

https://www.citizensadvice.org.uk/housing/renting-privately/during-your-tenancy/dealing-with-a-rent-increase/

theartfullodger

Thanks.  May I humbly suggest CaB & Shelter websites (especially Shelter legal website) and browsing through them. Shelter also run excellent courses...

Sadly with over 100 acts and regulations that may impact landlord/tenant matters it's sometimes complicated finding details.  Plus thanks to parliament, ministers and court cases it's always changing!

gelato_cat

I have already looked through those, like I said.  No worries if you can't give me the answer.

saajan_12

Suzey said:

Hello, I'm a bit confused about what I've been reading about rent increases.

I've read that if you have a fixed term AST, then the rent stays the same throughout unless there's a rent review clause in there, and even then only if you agree to a rent increase. - well lets be precise.. DURING the fixed term, rent review clauses are rare but would be enforceable if it specifies a determinable rent increase (eg rent will increase by £x or x% or RPI change between x and y date), no need for the T to agree. If it says nothing or something more vague eg rent may be increased between x% and y% then that's not a precise number, so rent would be fixed unless both sides agree to otherwise.  
At the end of the contract, you either move out, negotiate a new contract (which could be at a different amount of rent) or move onto a periodic tenancy at the same rent until the LL wants to increase it. - AFTER the fixed term, the rent may increase automatically if there's a deterministic rent review clause (eg rent will increase by £x or x% or RPI change between x and y date). If there's nothing or something more vague, then rent may be increased if both sides agree or if the LL serves a S13 notice. 

However, I've also read that if you are on a 12-month contract, then the landlord needs to give you six months' notice of any rent increase. - you're mixing up a 12 month fixed term and 12monthly periodic tenancy (ie your contract is quoted as £rent per year whcih you pay at the start of each year. These days monthly tenancies are more common, so after the fixed term your rent is £rent per month, notice to increase rent is 1 month. 

Does there have to be a rent review clause in the contract for them to be able to do this? - no, during the periodic tenancy, if the last contract is silent on rent increases then the LL can serve a S13 to increase rent, subject to referral to a tribunal if hte T chooses, to ensure the rent is in line with the market. 

Say you sign a 12-month AST that begins on 1st January and ends on 31st January, - do you mean 31st Dec? when can the landlord give you the six months' notice that they want to increase the rent?  Can they do this at any time after the contract begins?- see above.. if a deterministic increase is written into the contract then that applies without notice. If not then the rent remains fixed, and the LL can serve 1 months notice after the 31st Dec. 

Or have I misunderstood all of this completely?  (I was reading the info on gov.uk, the Shelter website and the Citizen's Advice site.) - yes, the 6 months thing is irrelevant in 99% of cases. 

Comments in line.. 
1.  During the fixed term, rent reviews are uncommon unless its a 2-3 year fixed term. However if there was a deterministic rent increase clause, then that would be binding without further notices or agreement beyond what the contract says. 
2.  After the fixed term, if a new fixed term is signed then the terms of that apply as per (1). 
3.  If not, but if the last contract specifies a Contractual Periodic Tenancy with terms about what happens after the fixed term, then that applies, including any deterministic rent increase terms and termination notice clauses. If there's a vague term eg giving a range of potential increases, then it would still need a notice which can be referred to tribunal or agreement from both sides. 
3.  If not, then the tenancy becoems a Statutory Periodic Tenancy, at the same rent initially. The LL may serve a S13 notice giving the appropraite notice (1 month for a monthly periodic tenancy). 

gelato_cat

Thanks @saajan_12!  That helps a lot, I understand it now.  Bookmarking this thread for future ref.

Yes, I did mean 31st December - sorry.

And yes, looks like I got mixed up between a 12-month fixed term and a 12-monthly periodic tenancy!

propertyrental

Suzey said:

And yes, looks like I got mixed up between a 12-month fixed term and a 12-monthly periodic tenancy!

12 monthly periodic tenancies, especially residential ASTs (as opposed to commercial tenancies) are almost as rare as golden eggs. Each 'period' would last 12 months and then roll over into a new 12 month period.

Did you mean a 12 month periodic tenancy? (ie each 'period' lasts one month with a cut-off after 12 months when the tenancy ends), Which by definition cannot exist since periodic tenancies continue forever, or until ended by the tenant, a court, or mutual agreement between T & LL.

propertyrental

Yes- a bit confused. See bold below.

Suzey said:

Hello, I'm a bit confused about what I've been reading about rent increases.

I've read that if you have a fixed term AST, then the rent stays the same throughout unless there's a rent review clause in there,
Correct (and provided the clause is valid).
and even then only if you agree to a rent increase. 
You already agreed by signing the tenancy agreement. You agreed to all the clauses.
 At the end of the contract, you either move out, negotiate a new contract (which could be at a different amount of rent) or move onto a periodic tenancy at the same rent until the LL wants to increase it.
Correct

However, I've also read that if you are on a 12-month contract, then the landlord needs to give you six months' notice of any rent increase.
Read where? Please provide a link. Maybe the government sneaked in a new law I missed (doubtful!)!

Does there have to be a rent review clause in the contract for them to be able to do this?
To increase the rent during the fixed term? Yes. Since on signing the TA, the LL & T agreed both the Term (12 months), and the rent (£X.00 per week/month/quarter), unless they also agreed  within the TA a rent review process.

Say you sign a 12-month AST that begins on 1st January and ends on 31st January December, when can the landlord give you the six months' notice that they want to increase the rent?  Can they do this at any time after the contract begins?
Yes LL can give you notice that they want to increase the rent at any time. T can choose to ignore it and LL cannot enforce.

Or have I misunderstood all of this completely?  (I was reading the info on gov.uk, the Shelter website and the Citizen's Advice site.)

Yes

Mrframed

My landlord gave me 1 month rent increase notice in January and issued short term 6 months contract. I contacted agency and explained that I am not moving in as stated in new contract as I already living at the address. I asked to amend dates and make it monthly periodic tenancy. They haven't. I didn't signed anything just changed standing order. End of it.