Tenant has negotiated a 2 year contract and after 1st year, a rent increase in 2nd year

Landlord Discussion
1

Hi, I had the flat originally on for a ££ then the new prospective tenant negotiated down, I accepted as I liked her as a tenant. She wants a 2 year contract. Can I the AST put a clause in saying in year 2, the rent goes up by X pcm? Any thoughts please would be great, or should I complete a 1 year AST for the first years amount instead?!

2

Any rent review clause will be invalidated when the Renters Rights Bill is introduced, and any future price increase will need to be via issuing a Section 13 notice.

Also, when the RRB comes in, any fixed term will also be invalidated, and the contract will become periodic, and can be terminated by either party subject to required notice.

So personally, I would just issue the standard 6 or 12m AST at the price agreed.

3

Thank you Karl11 yes I thought this too, ugh. I hear what you’re saying, that basically it makes no difference what I give them. Shame I didn’t hold back on what I wanted which I thought was fair already.

4

Well it does make a difference. Rather than being stuck in a 2 year AST where you can’t increase the rent, you’ll almost definitely be able to issue a rent increase after 1 year via a S13. You’re probably the only landlord here who will be looking forward to the RRB becoming law sooner rather than later!

1 Like
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Haha quite! Or maybe the most ‘naive’ landlord , as have issued a 2 year with rent increase clause for year two. We agreed it and I’d like to think they will stick to their word. As Karl said looks like it doesn’t matter what I issue anyways :squinting_face_with_tongue::sob:

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Thats fine & still valid currently, but likely once the RRB comes it, the rent review clause will be invalidated. You will still be able to increase the rent as planned though. Just remember to serve the Section 13 notice in the run up to the increase to push that through.

7

Id give a 6 month term and then look to review the rent at the end of it. If youre lucky that will be just before the RRB becomes law and you can increase it easily if you need to.

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