I’d like to increase the rent, how do I do it?
I have a long-term tenant in my property, who I have a good relationship with. We’ve discussed the need for a small rental increase, and they understand this, but how do I go about implementing it officially?
It’s great that you have had this discussion with our tenant, and really positive that they are understanding of the requirement to up the rent.
If you don’t have an official clause within your tenancy agreement, and the initial fixed period of your tenancy has expired and the tenancy has become periodic, you must issue a Section 13 in order to increase the rent. This is an official document giving your tenant notice of your intention to increase the rent.
Moving forwards, consider including a rent review clause in your tenancy agreement – this isn’t an unusual inclusion, and most tenants are happy with it. Any clause included must comply with the provisions of the Unfair Terms in Consumer Contracts Regulations and be fair – a simple way to make sure your review is fair is to justify it by a recognised factor, such as costs reflected in the Rental Prices Index. For example, ‘the tenancy shall be liable for a rental increase in line with the retail price index (RPI)’.
How much can I increase by?
It sounds like you are being reasonable but remember that the increase rate must be fair. It is advisable to keep your increase in line with other properties in the area. Rightmove and Zoopla are a great place to start to get an idea of what other properties in your neck of the woods are going for. Do bear in mind that condition, parking, location and furnished/unfurnished all must be considered – it’s not as simple as looking for other two-beds in your postcode!
When can I increase?
If you are using a Section 13 form, you are only able to increase the rent after the initial fixed term has been completed. The date in which you intent to collect the new rent cannot be earlier than a year after the date when you last increased the rent using a Section 13 notice. In your situation, with a long term tenant, this shouldn’t be a major concern, but it is worth keeping in mind for the future.
For a monthly, weekly or fortnightly tenancies, you must give your tenant one month’s notice of the intended increase. If rent is paid annually, a period of six months' notice is required before the increase can be put into effect. The increase must begin on the same day of the month that the tenancy started – you cannot use a Section 13 to change the day that rent is due.
So, what forms do I need, and what boxes must be ticked?
The Section 13 form differs slightly depending on where your property is located.
If your property is in England, you must use the Section 13 (2) –this can be downloaded here
If your property is in Wales, you must use the Section 13 (2) – Form D – this can be downloaded here.
It is important to remember that the Section 13 form should be service in the same language as the original tenancy agreement, unless agreed otherwise by both landlord and tenant. If agreed otherwise, it would be advisable to get this in writing.Once you have the correct form, you need to make sure that you include:
- Your/your agent’s details
- Details of your tenant
- Details of the property
- The amount that you intent to increase the rent to
- If you intend to increase any other charges, and if so, to how much
- The date upon which the changes will come into action
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