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Landlord and Tenant Law - Varying a Tenancy Agreement to Increase The Rent
The law presumes that any residential tenancy that lasts less than 7 years is an Assured Shorthold Tenancy unless stated otherwise in the tenancy agreement. In an Assured Shorthold Tenancy, the tenant is entitled to an initial fixed period at the originally agreed rent and the rent cannot be increased during this time.
However, at the end of the fixed period the landlord can increase the rent. If there is a written tenancy agreement, this will usually outline the steps which the landlord must follow in order to change the rent, or else if the tenant accepts this increase, the tenancy may be varied by mutual agreement.
If there is no written tenancy agreement setting out the procedure for rent increases, or the tenant refuses to agree to a variation in the rent the landlord may adopt the procedure set out in the Housing Act 1988.
Under section 13 of the Housing Act 1988 the landlord can issue a section 13 notice. This notice must be in the required form, and must contain information on the proposed rent increase, and the date from which the increase will take effect. This notice must be properly given to the tenant and must give them sufficient notice of the change in rent.
Where the tenancy is on a weekly, fortnightly or monthly tenancy, then one month's notice of the increase is required. In the case of an annual tenancy, the landlord will need to give at least six month's notice of the variation.
A section 13 notice may only be used to increase the rent once in each 12 month period. If a notice is issued less than a year since the last increase then it will be invalid and the tenant will not be obliged to pay the new rent.
Effect of Failing to Issue a Section 13 Notice
Unless a section 13 notice is issued, the tenant may continue to pay rent at the originally agreed level and provided that they do so promptly and in accordance with the tenancy agreement, they will not have breached the tenancy.
In a case where the landlord increases the rent but doesn't use a section 13 notice, and the tenant will continue to pay at the old rental rate, the landlord would be unable to obtain a court order requiring payment of the difference between the rent paid and the new rent, and they would be unable to obtain a court order for eviction on the basis of rent arrears.
However, it is important to remember that outside of the initial fixed period of the Assured Shorthold Tenancy, the tenant has no security of tenure. This means that the landlord may terminate the tenancy in accordance with the conditions set out in the tenancy agreement, usually upon one month's written notice. If a tenant refuses to accept a rent increase outside the fixed period the Landlord may choose to end the tenancy.
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