Rent rise with cap

Hi all, the current contract has a cap for 5%. But the local market price has exceeds far higher. We are on rolling contract. I have a good relationship with the Tennant but I simply can’t afford it anymore. Also I can’t raise the rent until August. which is another reason I might need to end the contract, What’s best going forward? I’m thinking to end the contract. and offer tennant a brand new contract. Is it ok to do so? Or if I renew it can I remove the clause with the cap? Any advise?

Is this a Contractual Periodic Tenancy? If its an SPT then the rent review clause probably doesnt now apply and you can either agree a larger increase informally or use a s13 notice. If this is a large increase then I would suggest you have a conversation with the tenant first

It is a shorthold tenancy agreement was drawn when they moved 2020 we didn’t renew since then. It was 6month and 12 month break contract. The clause says that “ no rent increase within 12month and limit to 5percent” last rent was up 6month ago. I would like to put the rent up before a year and more than 5%. I’m a Tennant myself and the rent up for 20%. it doesn’t cover my rent at the moment. We are in good term but I just want to make sure I’m doing the right thing. You reckon the clause is no longer valid?

It depends on the wording of the contract. Without seeing it I can’t really offer more than above. Can you reproduce the exact rent review clause, also the clause covering the term and what happens at the end of the term?

Course, here I attach a pick

Thats a terrible contract template. Where did you get it? The clause about the term automatically renewing is a mess and possibly meaningless. Fixed terms dont renew and the wording isnt clear enough to be enforceable imo. I dont think the wording is enough to make this a CPT either. However the rent increase sentence, although also badly drafted, may be enough to limit the increases to 5% even in a statutory periodic tenancy.

If you do manage to persuade the tenant to sign a new agreement at a different price, then I suggest you use a decent template and ditch this one.

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I think so too. Actually that is the template from open rent years back!!

If you have a recommendation on better contract please pass:)

Thank you for your advise

The Government has a free AST template online, but its very long and gives tenants extra rights to have pets. I use the NRLA template, which is shorter and free to members.

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