Its much easier to do if you have a fixed term AST with a rent review clause. I always renegotiated the rent when I issued a Section 21 notice for repossession just over 2 full months before the end of contract (in normal times) which triggers the discussion as to whether they wish to renew their contract (at the new rental rate). This is often justified as your own costs increase as do market rates. There is also a clause in my contract stating that rent will be reviewed annually in line with inflation and local market rates. Bear in mind it is a much smaller window now for issuing Section 21 notices I.e. you canāt issue no fault repossession notices in first 4 months of the contract and you have to give 6 months notice under pandemic restrictions. This leaves month 5 & 6 for issuing Section 21 notices under 1 year fixed AST. So plenty of time to then negotiate the new contract. I give my long standing tenants two year contracts anyway and have an automatic 3% uplift in rent in the second year of the contract for which I send in a reminder when the uplift is due. However I would not raise rents during the pandemic on moral grounds.
I disagree that its easier with a fixed term contract. Not only do you have all the admin of a new agreement, but you also rule out serving a s21 notice for the duration of the term if the tenancy goes bad. Imo its always better to let the tenancy go periodic and handle the rent increase either through an email or more formally through a s13 notice.
We will politely have to agree to disagree. I run my own contract and its a matter of changing a couple of lines on the first 2 pages and both parties initialling each page and signing the declaration. One works from their own experience and Iāve had no issues raising rents modestly and find it better to settle this with a tenant before agreeing their new fixed term AST or continuing with the repossession and offering it to another tenant that is happy with the rental fee. This guarantees your rent increase for the duration of the contract rather than a Section 13 in a periodic where a disgruntled tenant who you have not had such an agreement with can give you notice a couple of months later.
The reality is that if the tenant tells you a couple of months after youāve signed your new tenancy agreement that they want to move out, you will let them go anyway, because it would be madness to do otherwise, So in practice, a replacement tenancy is all one sided. Extra security for the tenant. None for the landlord.
In practice they would be held to contract - and have been - and are jointly and severally liable if more than one, otherwise a contract is pointless. Like I said we will have to agree to disagree.
Iām not trying to persuade you as youāve clearly already made up your mind, but for the benefit of others who might be reading, my view is that when tenants say they need to move for work or because they can no longer afford the property or any other reason really, it is not sensible to just just say no and hold them to contract, partly because they frequently just stop paying and you have the hassle of trying to sue them for the rent and partly because you are potentially leaving an angry and reluctant tenant in charge of an asset worth hundreds of thousands of pounds and you may be discovering aspects of their revenge for years to come.
I agree with David if a tenant wants to break the contract early I honour it as I know I can easily let to someone else and I do not need the grief or stress, would rather move on! Also they are generally so grateful they leave the property in a good clean state.
Good ! You are right David122, I donāt need to make up my mind as what I do works for me and Iām trying to pass that on. Iāve been a Landlord for a long time and I choose to never run out to periodic. I have also never found a situation so far where Iāve reached agreement with a tenant on a rent increase prior to agreeing a contract and found them wanting to exit early. However it is pointless having a fixed term AST contract thatās not worth the paper its written on. If they have a new job or a genuine reason to end the tenancy that is clearly a situation forced on the tenant for which I am understanding but ask for evidence and if agreed it is on the basis of an early termination fee by way of some compensation and hassle in organizing a new tenancy, which they are happy to pay. However that situation is nothing to do with the original question which asked how rent increases can be managed which is my focus to assist the questioner. It is also unlikely that for the sake of an agreed reasonable rent increase prior to signing the AST that tenants cut their nose off to spite their face and go through another lengthy application and referencing and its additional costs in time and money in finding a new rental property without good reason. I have asked you to respect a different approach and opinion to yours and agree to disagree but you seem to want to leverage extraneous circumstances to support your original point if its set alongside other approaches, without considering othersā experience.
Mike22, I totally respect your choice to have a different approach to this and to disagree and as I said, Iām not trying to persuade you otherwise. Its just that this is a forum where people propose a variety of views and ideas and thatās how everyone learns. I think I made my point and anyone reading this thread now understands both sides of this and should be better informed. Best of luck to you.
Davidā¦then you need to present your view in such a way that offers an āalternativeā in certain circumstances not that your view trumps other Landlords methods. If you read back through the thread Iām afraid it comes across in such a way that you are competing with them for credibility. This is particularly inappropriate given that Landlords face many differing circumstances and settle on what has worked for them that might also be useful to people who are asking for the advice on this forum and subject. That inevitably provides the questioner with a range of strategies to consider in their circumstances when dealing with their problem and may also add something for other Landlords too. I know that I have learned a few tips from fellow Landlordsā¦every day is a school day in the constantly changing PRS.
Sorry Mike, but I do believe that landlords will generally be better off not issuing replacement tenancies or holding tenants to contract when the really want to leave, so Iām not going to pull my punches on that. Actually, itās not just my view, Iāve found it to be the view of most experienced landlords. Itās also a view frequently expressed by the NRLA advisors. In fact I suspect youāve just been lucky so far and itās not an approach I would recommend to others.
Sorry David but that makes no sense whatsoever (and Iām still focused on the original question not your drift into contract termination).
Why would a tenant in a fixed AST who refused a rent increase on a new contract not then find another rental at the rent they are happy to pay during their 2 to 3 months notice of repossession (i.e. the issue of Section 21 Form 6a)? During this notice period they have plenty of time to do this particularly as I issue this ā3 monthsā in advance of end of contract in order to write to them to discuss whether they wish to continue with a new contract. Instead according to your view, they agree first, do nothing, sign the contract, wait 3 months until the new contract starts then refuse the rent increase and terminate, thereby risking litigation and losing their deposit, as well as the cost of finding a new rental and putting down a second deposit whilst their original deposit is in dispute ? Easier to shoot yourself in the foot. On top of that their agent or new Landlord will require reference from their previous Landlord who they are in dispute with ! What stupidity. However, you will no doubt once again have some extraneous answer for it without having the experience of doing it. You are suggesting (with such dogma btw that you start to lose credibility) that your methods trump other Landlords methods. I note that you are now representing what you consider to be other Landlords views on the matter rather than a focus on supporting your own view, which can only be seen as a further attempt to try and garner support for a method that works for you. As for luckā¦you make your own luck in the choices you make borne from your own experiences and my tenants have been with me in excess if 5 years with good relations.
I am sure youāll want to come back with further dogma but for my part Iām closing this down. Good luck with your choices.
In my view threatening eviction by serving a s21 notice as a tactic for negotiating a rent increase is manipulative and sets completely the wrong tone in the relationship with the tenant and is likely to lead to a decline in cooperation. It was just this sort of practice that ushered in the changes to s21 in 2015. If you have a rent review clause in your tenancy agreement, its also unnecessary since the tenant is contractually bound by that. For agreements without rent review clauses, agreeing an increase informally with a tenant becomes binding as soon as they start to pay it. Alternatively a landlord can serve a s13 notice to increase the rent and this is legally binding. Whilst a tenant can challenge the notice through the tribunal, in practice this is rare and even more rarely upheld and only if the new rent is way above market levels. In my opinion these are far more appropriate mechanisms for increasing the rent.
landlord /Tenant always try to keep on a friendly note , but businesslike There is enough animosity in the world ā¦ why make life hard for yourself.
What utter rubbishā¦you are legally required to issue a Section 21 notice 2 full months before the end of the contract and therefore what other time do you think you can discuss a rent review !? I have a rent review clause in my contract as stated earlier but you clearly donāt take things in. I have also not raised my rents in the last two years so I donāt need rhetoric from someone clearly lacking in vision and other peoples views. If you donāt close this down I will complain about your antagonistic and obtuse approach to others on this forum. Thereās plenty evidence of it after all.
You previously stated you would close this down . Now you are replying , why donāt you just leave it. Why argue . Every Landlord will have a different view on a subject , right or wrong.
Itās you thatās talking utter rubbish Mike22. The is no requirement to serve notice to end a fixed term tenancy. It ends automatically through the effluxion of time. A new periodic tenancy then begins and a s21 notice cannot prevent that. However, I dont expect you to accept that since you seem averse to learning. However, Colin is right that there is no point continuing the argument, so Iām going to bow out of this one.
Totally agree
A willing tenant is always preferable. Better relationship with each other in the long run. In any case life is difficult and things change at the drop of a hat and I can still remember how tricky it can be. I would not be party to anyone getting in debt or losing a job etc. Do as yoy would be done by is my motto.
Hi all, iām getting a tad confused now so here is the situation:
Long term tenant last Tenancy Agreement expired 21/11/2009. Heās been in the property since 2007, there is nothing in that contract referring to annual rent review.
- My understanding is he has reverted to a Statutory Periodic Tenancy. Is this correct?
- the rent has never changed now wish to review this. My understanding is I use FORM 1 Notice proposing different terms for a Statutory Periodic Tenancy Housing Act 1988 section 6(2).
Is this correct? - within this form I wish to add annual review of rent as well as the current increase to take affect in just over a month on this original rental agreement date. Can I do this?
We have already on several occasions, most recently 2 weeks ago,discussed the requirement for an increase in person however postponed this due to the pandemic. With increasing costs itās now costing me to have the property so been left no alternative but to increase.
Iād rather just give him a new 2 year contract but concerned Iād then be defaulting on my legal requirements??? any advice would be appreciated. thanks
You use a s13 notice, which is form 4. You cant use it to specify annual increases, but thats not in your intetest anyway. You just use it once a year to increase the rent. The Government are proposing to restrict the use of this form in the new White Paper so I would suggest you act quickly to get it somewhere near market levels.