When I approach my tenants (via email) about a rent increase, should I copy in their guarantors?
And can anyone advise on the wording of any document that we might sign? Or is it the case (as I have seen in the forum), that nothing needs to be signed – they just need to agree (via email) and amend their direct debits?
Thanks!
They just need to start paying the agreed increase and its then binding. If you think they wont, then serve a s13 notice.
Thanks, David. I’ve seen before that this is what you advise. But shall I include the guarantors in any correspondence? Thanks.
Yes, I think you should do that. You might also check the wording of your guarantee to make sure its still valid after a rent increase.
The Open Rent AST says the guarantors remain responsible (“including any variations to increase the Rent whether by agreement between the Landlord and the Tenant or pursuant to a notice given by the Landlord under section 13 of the Housing Act 1988”).
Unfortunately (thanks to the government), the rent increase I propose is 20% (as a result of mortgage rate increases), which is a lot. But it would bring it up to average market rates in the area (which are rather over-inflated by new build luxury flats and a lot higher than in the borough as a whole).
I didn’t increase the rent during Covid and in fact reduced the entire amount by 28% for the lead tenant because she found it impossible to work at home with her flatmate also working at home – the flatmate left and she paid the lower amount on her own. (That was hard for me as I had no work – I work in the arts – but fortunately I received Covid grants to cover the period). Then she decided she couldn’t afford it and found a new flatmate and the rent went back to what it was.
I missed the opportunity then to increase the rent (I was more worried about energy price increases for all of us at that point), and told them both I would not increase the rent, but it would have to rise in March 2023 at the end of their new 6 mth contract. So they have had warning.
I mention this detail because I’m worried that they won’t agree to a 20% rise. If they don’t I will have to evict them, find new tenants – or put the property on the market (at not a very good time – but hey!).
If I serve a Section 13 on March 1st (when the AST goes periodic) and they don’t challenge it, they are required to pay the new rent on April 1st, which is a month’s delay.
If they choose to challenge it, it could be another few months before it is resolved at the FPT, whether in my favour (backdated to March 1st) or not. Quite a risk.
An Open Rent blog by Paul Shamplina suggests
that a Section 21 could be served at the same time as a Section 13. Why would he say that?
The mind boggles at the implications of this (but the thread is now closed to questions). Can you (or anyone) advise on that?
In the meantime I’ll politely present my lovely tenants with the rent rise – without any scary (and frankly, draconian and ill-drawn up) government forms, and see what they say.
They have very good salaries and may be OK with it – but for one it’ll represent 36% of their earnings after tax, and for the other 43%. And they both have student loans to pay off. This is not good.
36% and 43% of earnings. wow !! . am i glad I saved to buy early in life.
Good for you. No chance of doing that now.
I think I was about 25 when I bought my house of my landlady . She gave me a private mortgage . I have never forgotten her kindness… Without that kickstart I would be poorer
Funnily enough I’ve just been thinking about offering my tenants that option.
The funny thing is my first house was 4.5k I could not get a mortgage ( i have been S/E for 50 years) next home borrowing £15 k 10 years later no probs > Moving on to 20 years ago I bought an old mill farmhouse and could not believe how much money was thrown at me. The more money you have the more you can borrow. Not fair really because someone can be paying a lot in rent but cannot get a mortgage for the same repayment… 2 of my children rent so I know how hard it is for them to get a mortgage
Unfortunately, mortgage rates are such that it’s hardly an attractive option, even if the tenants have a good income, savings or can call on the bank of mumanddad. Even with a reduction in sale price.
From experience i would issue a section 13 for the rent increase regardless if the tenant agrees to it. Yes usually one would think that agreeing it and then tenant paying the new amount becomes legally binding, which i’m sure if argued in court will probably stand. However, to save the headache of arguing this i would just go with the section 13.
Thanks, Rach. Reading up about Section 13, I came to the conclusion that it couldn’t be served until the rolling periodic had started (in this case, March 1st). But I see the Shelter website says it can be served during a fixed term as long as the start date of the increase falls within the rolling periodic time. Is that the case?
Yes, that is correct
I’ve just read that a Section 13 can’t be served until a year after a new tenancy. Whilst the lead tenant signed her first AST over three years ago, the current 6 mth AST was also signed by a new tenant. Surely that would make it a ‘new tenancy’? And therefore I can’t serve a Section 13?
Can anyone confirm?
What’s a section 13 I’ve always made a new TA
Yes, if you’ve added people and they’ve all signed the agreement then its a brand new tenancy, (not a replacement tenancy) and you can’t serve a s13 notice in the first year I think.
Yes, it needs to be 12 months after the previous increase.
There hasn’t been an increase for over three years, due to Covid. The issue is that a new co-tenant triggered a new 6 mth AST in August 2022.