Upward only rent review

AliC999

I got some great help on another thread on here. Thank you to everyone who responded. I have another issue (like buses!). 

The following clause refers: 

9. Rent Review: It is agreed that the rental as defined in Clause B8 of this agreement will be reviewed in an upwards only fashion every year on the anniversary of the tenancy start date and in line with the CPI (Consumer Price Index) increases for the previous 12 months and subject to a minimum of 3% and a maximum of 10%.

I dispute with the agent that this is fair because of two reasons:

1) Issues with the house: We have just been 5 weeks without a bathroom due to damage and previously been without a shower and toilets for the duration, due to poor installation. It seems unfair to increase the rent given all the disruption.

2) Rentals in the area are dropping significantly. A similar size property within 1 mile just decreased asking price by £550. Any rental increase at present does not seem fair or reasonable. 

Does the above clause qualify as a rental review, (like the clause title says it is) and can it therefore be challenged or submitted for a rent tribunal?

Thank you again for your help. Such stressful times. 

Emmia

AliC999 said:

I got some great help on another thread on here. Thank you to everyone who responded. I have another issue (like buses!). 

The following clause refers: 

9. Rent Review: It is agreed that the rental as defined in Clause B8 of this agreement will be reviewed in an upwards only fashion every year on the anniversary of the tenancy start date and in line with the CPI (Consumer Price Index) increases for the previous 12 months and subject to a minimum of 3% and a maximum of 10%.

I dispute with the agent that this is fair because of two reasons:

1) Issues with the house: We have just been 5 weeks without a bathroom due to damage and previously been without a shower and toilets for the duration, due to poor installation. It seems unfair to increase the rent given all the disruption.

2) Rentals in the area are dropping significantly. A similar size property within 1 mile just decreased asking price by £550. Any rental increase at present does not seem fair or reasonable. 

Does the above clause qualify as a rental review, (like the clause title says it is) and can it therefore be challenged or submitted for a rent tribunal?

Thank you again for your help. Such stressful times. 

I think perhaps you should find another rental, what's going for this one (other than avoiding moving hassle)

Mr.Generous

Ali I have a rental that I renewed about 10 months ago and the agent has switched to an online portal where loads of stuff including the Tenancy Agreement was done on a template that included that exact wording. As a landlord I wouldn't increase the rent in the circumstances you describe no matter what the AST said. I've already contacted my tenant to let them know rent will be £10 higher per month (about 1.4% increase) - rents in theNorth West are still rising, but at about 8% now, down from 10-12% a few months ago. I let this about £50 per month less than the going rate so a smidge more rent is justified I think. The landlord may not increase the rent and might think the clause in the AST is stupid, but you can't take anything out! I think the AST has a clause in about sweeping the chimney every year, and the house doesn't have one. If the agent is pushing it could you talk to the LL?

propertyrental

1) is a sepatrate issue of enforcing repairs. I assume this is in hand?

2) you can always renegotiate the rent. If you/LL agree you can reduce the rent and sign a new TA on that basis.

Or you could move to a periodic tenancy at the same rent as at present.

Post 4: Ending/renewing an AST: what happens when a fixed term ends? How can a LL or tenant end a tenancy? What is a periodic tenancy?

Post 5: Rent increases: when & how can rent be increased?

AliC999

Mr.Generous said:

Ali I have a rental that I renewed about 10 months ago and the agent has switched to an online portal where loads of stuff including the Tenancy Agreement was done on a template that included that exact wording. As a landlord I wouldn't increase the rent in the circumstances you describe no matter what the AST said. I've already contacted my tenant to let them know rent will be £10 higher per month (about 1.4% increase) - rents in theNorth West are still rising, but at about 8% now, down from 10-12% a few months ago. I let this about £50 per month less than the going rate so a smidge more rent is justified I think. The landlord may not increase the rent and might think the clause in the AST is stupid, but you can't take anything out! I think the AST has a clause in about sweeping the chimney every year, and the house doesn't have one. If the agent is pushing it could you talk to the LL?

Thank You - Yes that is the exact Tenancy Agreement template! Worrying it is being used by a national chain of estate agents. I think we are just going to just accept the upheaval and move. It's a good point about talking to the landlord as they will definitely lose out. They won't get the current rent that is being paid and will have 2-3 months of no tenants. I very much appreciate your comments on both my posts

saajan_12

AliC999 said:

I got some great help on another thread on here. Thank you to everyone who responded. I have another issue (like buses!). 

The following clause refers: 

9. Rent Review: It is agreed that the rental as defined in Clause B8 of this agreement will be reviewed in an upwards only fashion every year on the anniversary of the tenancy start date and in line with the CPI (Consumer Price Index) increases for the previous 12 months and subject to a minimum of 3% and a maximum of 10%.

I dispute with the agent that this is fair because of two reasons:

1) Issues with the house: We have just been 5 weeks without a bathroom due to damage and previously been without a shower and toilets for the duration, due to poor installation. It seems unfair to increase the rent given all the disruption. - that is a separate issue, and if it was really laughably installed without a normal level of skill them perhaps it's an argument for some % compensation for the lack of use in the first year. However that's not relevant to the contract fairness or next year's rent. "Fairness" in contracts is different.

2) Rentals in the area are dropping significantly. A similar size property within 1 mile just decreased asking price by £550. Any rental increase at present does not seem fair or reasonable. - again that's economic fairness , not legal fairness. Something can be overpriced and perfectly fair, your options would be to buy it or decline. Or, negotiate and argue that the local market price is lower and you'd just give notice, leaving the LL with a void and lower yielding property.

Does the above clause qualify as a rental review, (like the clause title says it is) and can it therefore be challenged or submitted for a rent tribunal? the tribunal is for if the LL unilaterally increases the rent via S13. In this case, although written casually, I'd say that clause fully specifies a rent increase (change in CPI, floored at 3% and capped at 10%). As such, it's agreed in the contract and would not be eligible for tribunal review

Thank you again for your help. Such stressful times. 

Comments in line. Basically the points you mention are really about economic fairness not about the principle of unfair contracts. Also I don't think the tribunal would apply as it's a pre-agreed increase via the contract, and not an arbitrary S13 increase. 

So I think you're left with negotiating (rather than demanding) your preferred outcome. If properties in the area are £500 cheaper (in absolute terms not just a decrease from an artificially high asking price). Then you say you would would like to bring the rent to be more in line with the market. If not, you would give notice and move out to one of those, while the LL would be left with a void and a property with that lower amount anyway. If you come to an agreement, you could sign a new fixed term or could sign an amendment to confirm the new rent and remove the review clause. 

gazfocus

We rented a house a while back that was already at the top of our budget (and on looking around at the time, was somewhat overpriced). On the 6 month inspection I recall the managing agent telling us that purely as a matter of course they increase the rent 2 years into the tenancy. That sealed the deal that we were going to move. 

I just don’t understand why landlords would increase the rent for no apparent reason. As a landlord now myself, I am comfortable with the rent I charge and will only ever increase it if costs start outweighing the return. 

RHemmings

gazfocus said:

We rented a house a while back that was already at the top of our budget (and on looking around at the time, was somewhat overpriced). On the 6 month inspection I recall the managing agent telling us that purely as a matter of course they increase the rent 2 years into the tenancy. That sealed the deal that we were going to move. 

I just don’t understand why landlords would increase the rent for no apparent reason. As a landlord now myself, I am comfortable with the rent I charge and will only ever increase it if costs start outweighing the return. 

It is possible to say no to a price increase. Then ask the landlord to issue a S21 if they want you gone. I can understand why you wouldn't want to do that, but as a general comment on this thread, tenants may have some negotiating power. Not much it seems right now, but some.