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A subject dear to the heart.  Every tenancy agreement will fix the rent.  As time goes on the landlord will want an increase in line with market conditions.  How can this be achieved?

By agreement with the tenant

Normally the parties are free to agree a new rent.  This is the best course and it applies to both assured shorthold tenancies and assured tenancies.  But suppose the tenant will not agree.

Assured Shorthold Tenancies

Where a tenant is an assured shorthold tenant, the rent will be fixed for the initial fixed period of the tenancy and cannot be increased unless the tenant agrees.  Once the fixed period comes to an end however, the landlord can suggest that he will terminate the tenancy unless the tenant will agree an increase.  In practice if the tenant will not agree the landlord will either accept the position or terminate the tenancy by issuing a section 21 notice.

Assured  Tenancies (including assured shorthold tenancies)

If the tenant will not agree an increase the landlord can serve a notice of increase on the tenant under section 13(2) of the Housing Act 1988.  There is a specific notice for this purpose, which we will call a section 13 notice.

This can be used with assured tenancies (where the tenant has security of tenure).  However the section 13 notice procedure can also be used with assured shorthold tenancies as an alternative to terminating the tenancy (although this is unusual).

A copy of the notice is in Forms.  The form of notice is prescribed by law and a notice which does not comply will probably be held to be invalid and ineffective.  The notice must specify the date on which the increase is to take effect.  Considerable care is needed to complete the form properly but the guidance notes within the form itself are helpful.

The notice cannot take effect until after the first anniversary of the tenancy.  The notice must give at least the following notice of the increase:-

• If the tenancy is a yearly tenancy, not less than 6 month's notice.
• Where the period of the tenancy is less than a month (the usual example would be a weekly tenancy), not less than a month's notice.
• In any other case a period equal to the period of the tenancy.

The notice must not specify a date for the increase to start which is less than a year after the rent was last increased under these rules.

If the landlord seeks to increase rent without serving a section 13 notice then the tenant is not liable to pay the increased rent.  If the landlord later seeks possession based on the arrears of the increased rent, the court may not allow the landlord the increase.  Therefore there may be no arrears of rent and a possession action  based on rent arrears would fail.

If the tenant does not agree to the increased rent proposed in the notice, the tenant can refer the proposed new rent to a Rent Assessment Committee.  The application must be made by the tenant and received by the Rent Assessment Committee no later than the day before the date on which the new rent is due to start.  If the application is not received in time, or is not made at all, the landlord's proposed rent becomes the rent payable.

The Rent Assessment Committee is a statutory body consisting usually of a property valuer, a layman and a lawyer.  It will in some circumstances invite representations from landlords and tenants.  The committee will visit the property and, having carried out research into market rent levels in the area, will fix the rent.

Once the rent is fixed, then that is the maximum that the landlord can charge until the review procedure can be repeated.

Rent periods

The tenancy agreement should specify the rent payment dates.  If payment is monthly, payment should be on the same date each month.  The first is ideal because the tenant will just have been paid.  For weekly rent, specify a payment day.  For monthly rent, consider the use of a standing order.  You can only insist on this if the tenancy agreement says so.  If you do get the tenant to pay by standing order, be sure to check your bank statement soon after the due date so that you can act quickly if a payment is missed.  There is a form of standing order for monthly rent in Forms.