Market conditions change, and sometimes increasing the rent on your property becomes necessary. However, landlords in England can't simply raise the rent whenever or by however much they like. There are specific legal rules and procedures that must be followed. Getting it wrong can lead to disputes and render the increase invalid.
Rules for Increasing Rent:
The method for increasing rent depends on the type of tenancy and what your agreement says:
- During a Fixed-Term Tenancy:
- You can only increase the rent if the tenant agrees to it (signing a new agreement or addendum).
- OR if there is a specific rent review clause in the original tenancy agreement that outlines how and when the rent can be increased. A vaguely worded clause may not be enforceable. Legalmaster agreements can incorporate clear, fair rent review clauses if selected.
- During a Periodic Tenancy (Rolling Month-to-Month):
- Agreement: Landlord and tenant can mutually agree on a rent increase, ideally documented in writing.
- Section 13 Notice: If agreement isn't reached, the landlord can formally propose an increase using a specific legal form called a "Section 13 notice".
- You can usually only use this method once per year.
- You must give the tenant at least one month's notice (or longer if the rental period is longer, e.g., quarterly).
- The proposed rent increase must be fair and realistic (in line with local market rates). Tenants can challenge excessive increases at a tribunal.
Important Considerations:
- Fairness: Increases must be reasonable and align with market rates. Unfair increases can be challenged.
- Notice Periods: Adhere strictly to the required notice periods.
- Documentation: Keep clear records of any rent increase agreements or Section 13 notices served.
How Your Legalmaster Agreement Helps:
- Clarity on Initial Rent: Establishes the starting rent amount and payment terms clearly.
- Rent Review Clauses: Allows for the inclusion of compliant rent review clauses if you want the option to review rent during a fixed term.
- Foundation for Section 13: Provides the clear tenancy start dates and terms needed as a basis if you need to use the formal Section 13 procedure later.
Increasing rent requires careful handling to remain compliant. Always follow the correct legal procedure for your tenancy type. Using a robust tenancy agreement from Legalmaster ensures the foundational terms, including any rent review clauses, are clearly and correctly documented from the start.
