Question
I have been letting a flat for the past six months. The tenancy agreement is about to come to an end and I would like to increase the rent. Do I have to issue a new tenancy agreement or can I simply charge a higher rent from the end of the current tenancy?
Answer
There are now more than 20 different kinds of residential tenancy in use in England and Wales. However, the overwhelming majority of tenancies granted by private landlords in recent years have been assured shorthold tenancies governed by the provisions of the Housing Act 1988. Two separate procedures are laid down for varying the rent for assured shortholds.
The first procedure deals with the rent during the fixed period of the agreement itself. For example, the landlord and tenant may sign a one-year tenancy stating that the rent will be £200 a week. During the first six months the tenant has the right to challenge the agreed rent under Section 22 of the Housing Act 1988 — despite the parties having signed the agreement. The tenant simply applies to the local rent assessment committee to decide whether the rent set out in the agreement is “significantly higher” than the rental for other assured shortholds in the same locality. If it is excessive, the committee can reduce the rent to a market rate. Section 22 applications are comparatively uncommon, mainly because the landlord may respond to an application by ending the tenancy as soon as possible.
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Once the fixed period of the tenancy agreement ends, the landlord and the tenant are always free to draw up a fresh assured shorthold tenancy that sets out an agreed new rent.
If the tenant stays on with no new agreement, a second procedure governs any increase in rent. In this situation, the tenant continues under an arrangement known as a “statutory periodic tenancy”. The rent payable under this type of tenancy can be increased only if the landlord first serves a notice of increase in accordance with Section 13 of the Housing Act 1988. The notice has to be in a special form, and it will have to specify the proposed rent and the date by which the tenant should respond. If the tenant fails to reply by the deadline, the landlord’s proposed rental figure becomes the new rent. However, before the time limit expires the tenant may refer the Section 13 notice to the local rent assessment committee and the committee will decide the appropriate market rent.
In your case, you should either get the tenant to sign a new tenancy agreement with a higher rent or serve a notice of increase under Section 13 of the Act.
The writer is a barrister at Tanfield Chambers. E-mail your questions to: