RENT INCREASE

[SPEEDTWIN]

Does anyone know if you have to issue a new AST if you do a rent increase. Can you leave a tenant on a periodic tenanacy and still do the increase.

its always nice to know you can issue a section 21 at any time (even if your not planning to)

[Trenners]

If you have lapsed into a Periodic tenancy then you can issue a Section 13(2) notice to increase the rent. You need to give the tenant at least 1 months notice of the rent increase (from a rent day) so that the tenant has the right to terminate if they do not wish to pay the new rent.

Good luck,

Mark

[guildofresidentiallandlords]

Firstly, I agree with the last post that the Section 13 notice is the best way to increase the rent. However, just a little word of warning when establishing the date of the rent increase.

It did used to be the general thought that you always started the rent increase on the "rent day", however (as I have been preaching for many years now) this is not true!

Finally, there has been a case in the London Leasehold Valuation Tribunal, 9th February 2006, dealing with this exact issue.

The case dealt with a rent increase on an Assured tenant.

It gets rather complicated to explain, so please bear with me. Also I am still waiting from the Barrister who took the case on all the paperwork, but here goes.

Basically the first thing we need to do is look at "what are the periods of the tenancy?"

Section 5(3)(, 1988 Act, provides that the periods of a statutory periodic tenancy are “the same as those for which rent was last payable under the fixed term tenancy”. The word “last” in s.5(3)( qualifies the word “payable”. The period of a statutory periodic tenancy should not be construed by reference to the period for which the rent was payable under the fixed term but by reference to the period for which the rent was “last payable”. It was therefore necessary, in order to determine the period of a statutory periodic tenancy, to ascertain what payment of rent last fell due and the period covered by that payment. [Church Commissioners for England v Meya [2006] EWCA Civ 821].

An example of where this matters is if your agreement said rent of £90.00 per week, payable four weeks in advance. Previously it was the case that the £90.00 per week was the periods of the tenancy and the four weeks part was merely a convenient means of payment [Laine v Cadwallader CA 2001]. However this is no longer the case. The periods of the tenancy in the above example are now "four weekly".

The second and even more confusing part is as follows.

You do not look at the dates the rent is due. It has nothing to with the periods of the tenancy.

You should think of your tenancy as being two agreements. If you look at the fixed term and find the end date. This is when that agreement ended (at midnight), then a new agreement started 1 second after midnight (statutory periodic tenancy).

It is when this "new" agreement started that matters, not when the rent is due.

Example

AST - rent increase date

Tenancy fixed term - 10th March 2006 - 20th June 2006

Rent payable £400.00 per calendar month on the 10th of every month.

Fixed term ended on 20th June 2006, therefore new Statutory periodic tenancy commenced on 21st June 2006 - 20th July 2006, then next period is 21st July 2006 - 20th August 2006 ... and so on.

In the above example, the "beginning" day of a period of the tenancy is the 21st of the month and the "last" day of a period of the tenancy is the 20th of the month.

Section 13(2) HA 1988 requires that the notice take effect "at the beginning of a new period of the tenancy..." (Notice it does not say at the start of a new rent date).

Therefore, in this example your notice must be at least one month long and take effect on the 21st of the month.

In the case Miller v Thornton Berry, 2006 London Leasehold Valuation Tribunal, a landlord attempted to increase the rent on the "rent day" (in this example 10th of the month). He failed and he should have served it to take effect on (in this example) 21st of the month.

It is the Leasehold Valuation Tribunal that deal with all rent increases on Assured and Assured Shorthold Tenancies, so it is crucial to get it right.

It should also be noted that the same rules apply when serving a section 21 (2 months) notice. Though this judgment is not binding on a Court, it is now likely to be very persuasive and I think in any event it is what the Housing Act 1988 states as being the correct way.

Sorry it is complicated, it is very difficult to put all this into simple terms and in writing!

Hope this helps

Adrian Thompson

Guild of Residential landlords.

[SPEEDTWIN]

Thanks for that it was very helpfull.

Next question, where can i get a section 13(2) form???

[guildofresidentiallandlords]

If you go to this website, you need form No. 4. Not sure how you will copy it across though, as the link is to the actual regulations that state what the notice must contain etc.

http://www.opsi.gov.uk/si/si1997/97019405.htm

If you could get hold of a proper copy, it would be better. I am not aware of any amendments to the regulations so it should be upto date. (It looks the same as the ones we supply at a glance).

Hope this helps

Adrian Thompson

Guild of Residential Landlords