Landlords and tenants agree a rent at the start of a tenancy which is stated on the tenancy agreement. Sometimes this agreement contains provisions for rent increases during the term. This allows both parties the security of knowing the rent throughout the period of the assured tenancy. But what happens at the end of that term? A new rent can be agreed if a new tenancy agreement is signed. However, if the tenant remains in the property on a periodic tenancy, do the rent increase provisions in the tenancy agreement still apply?
You may expect that they do. After all, the current rent and other terms of the original tenancy agreement ‘roll over’ into the periodic tenancy. However, this is not the case. A tenant may agree to a rent increase by negotiation, in which case their agreement should be documented. If they do not agree, under Section 13 of the Housing Act 1988 landlords who wish to increase the rent must serve a prescribed notice on the tenant, specifying the new rent and the date on which it commences, giving at least one months notice. This increase will then take effect as notified unless the tenant wishes to apply for assessment. This was held to be the case, even where the tenancy agreement specified an annual increase, and the landlord wished to impose a greater increase. A notice must therefore be served on a periodic tenant, whether or not there were provisions for rent increase in the tenancy agreement.
A template notice is available from the government here.
If you require any assistance in negotiating rent increases, completing or serving section 13 notices or any further advice, please email me.