How Do I Raise the Rent
Fixed Term AST
You can only raise the rent in a fixed term contract if the AST either specifies an increase or includes a rent-change mechanism. A RCM is a formula that specifies how future increases will be calculated - for example it may indicate that rent will be increased on the yearly anniversary at RPI plus 2 percentage points.
Statutory Periodic Tenancy
If you and your tenant want the tenancy to continue long-term, then it is often simplest to negotiate a new tenancy agreement at a revised rent. However, you can not impose a new tenancy agreement upon your tenants, so this option is only viable if you can agree a new rent.
If you can not agree a new rent, or you do not want to commit to a new Fixed Term tenancy, then you will have to rely upon any Rent Change Mechanism specified in your tenancy agreement.
If, and only if, there is no RCM, then you will have to give your tenants at least a months notice under section 13 of the 1988 Housing Act. This must be done on a specific form (form 4b), which notifies the tenants of their options if they disagree with the increase. Basically, these options are to leave, or refer the increase to a Rent Assessment Committee. A section 13 notice can only be utilised once every 52 weeks.
The tenants options are:
1. This notice proposes that you should pay a new rent from the date in paragraph 4 of the notice. If you are in any doubt or need advice about any aspect of this notice, you should immediately either discuss it with your landlord or take it to a citizens' advice bureau, a housing advice centre, a law centre or a solicitor.
2. If you accept the proposed new rent, please make arrangements to pay it. If you pay by standing order through your bank, you should inform them that the amount has changed. You should also notify your Housing Benefit office if you are claiming benefit. If you are worried that you might not be able to pay your rent, you should seek advice from a citizens' advice bureau or housing advice centre.
3. If you do not accept the proposed new rent, and do not wish to discuss it with your landlord, you can refer this notice to your local rent assessment committee. You must do this before the starting date of the proposed new rent in paragraph 4 of the notice. You should notify your landlord that you are doing so, otherwise he or she may assume that you have agreed to pay the proposed new rent.
4. To refer the notice to the local rent assessment committee, you must use the form Application referring a notice proposing a new rent under an Assured Periodic Tenancy or Agricultural Occupancy to a Rent Assessment Committee. You can obtain this from a rent assessment panel, housing advice centre or legal stationer (details can be found in the telephone directory).
5. The rent assessment committee will consider your application and decide what the maximum rent for your home should be. In setting a rent, the committee must decide what rent the landlord could reasonably expect for the property if it were let on the open market under a new tenancy on the same terms. The committee may therefore set a rent that is higher, lower or the same as the proposed new rent.
None of the above prevents you negotiating and agreeing a new rent with your tenant - but all the above will stand up in court if you need to prove the increased rent in future.