When a landlord wishes to increase the rent, they’ll usually try to reach agreement with their renters, or rely on a clause in the tenancy agreement. However, if the landlord can’t agree on a rent increase, they can go ahead an increase the rent using a Section 13 notice on Form 4. However, it’s important they follow the correct process.
Click here to find out how to increase the rent by agreement or using a rent review clause in a tenancy agreement.
Section 13 Rent Increases at a glance
Process for Section 13 rent increase
So long as it’s not during a fixed term tenancy, a landlord can serve a Section 13 notice on the tenants to increase the rent, once every 12 months.
The landlord needs to serve the notice using Form 4 – click here for the version on the government website, which is available free of charge.
Section 13 Housing Act 1988 states that the notice must start on ”the beginning of the new period of the tenancy”.
What is the start date of the tenancy?
To find the start date of each tenancy period, find the start date in the original tenancy agreement. When the the fixed term of that tenancy agreement ends and becomes a statutory periodic tenancy, it is that date that will be the new tenancy period date. Unless of course the agreement is amended, or a contractual periodic tenancy is signed. For some older tenancies, the rent book will record the relevant date.
In most cases, rent is payable on a calendar month basis. Therefore, the landlord needs to give a calendar month’s notice, and start the new rent at the beginning of a tenancy period.
For example, if the monthly periodic tenancy starts on 2nd of each month to the 1st of the next, the date on the notice must be the 2nd. It’s the periodic tenancy date when the rent is due which is key, not the date on which the tenant pays the rent. If the landlord doesn’t use the correct date, the notice will be invalid.
Some older tenancies are on a weekly period. In that case, the notice must start on the relevant day of the week.
As the case of Mooney v Whiteland (2023) shows, it’s important to use the date that the rent is due, rather than when the renters pay. Here, the Section 13 notice was invalid as the notice referred to the day the rent actually paid the rent (the Friday), instead of when the rent was due (the Monday).
Can tenants challenge a Section 13 notice?
If a renter doesn’t agree to the new rent in the Section 13 notice, they can challenge the notice in the Rent Tribunal. However, they need to do this before the date the rent increase is due to start.
To appeal a notice, they need to submit Form Rent 1, which asks form detailed information on the property (rooms, facilities, type of property, furniture, repairs). Click here to download Form Rent 1 from the GOV.uk website.
The tribunal will set a rent for the property. To do this, they will assess what rent the property would reasonably achieve if it were let on the open market under a new tenancy on the same terms. This means that the tribunal may set a rent that is higher, lower or the same as the proposed new rent.
Therefore, it’s risky for a renter to go to a Rent Tribunal if the new rent is below the market. For instance, if the rent is £500 pcm, and the market rent £750, an increase of 20% to £600 is below the market. It’s an above inflation rent increase, but is below the market rent, and the tribunal might increase the rent to £750.
The tribunal can also take into account any repairs that the landlord should have taken care of. Additionally, they can take account of the value of any improvements the tenant has made themselves.
The tenant needs to keep paying the old rent until the tribunal makes a decision.
So long as the proposed rent increase is no more than the average for a similar property in the area, the tribunal is unlikely to decrease the rent.
How will the Renters Reform Bill affect Section 13 Rent Increases?
The draft of the Renters Reform Bill published on 17 May 2023 proposes making Section 13 Notices the only way landlords can increase rents after the Bill comes into force. (Click here for an estimated timetable for the implementation of the Renters Reform Bill).
This means that the only valid route for a private landlord o increase the rent will be using a Section 13 Notice. The notice period for a rent increase will increase from one to two months, and the new rent will only come into effect after the landlord (or agent) issues the Section 13 Notice. A revised Section 13 Notice will be published on the GOV.uk website.
As is the case now, the tenant will be able to challenge the rent increase in the First-tier Tribunal. They will assess the proposed rent against what the landlord could expect to receive if letting to a new tenant on the open market. They may also decide that the market rent is higher than the proposed rent in the Section 13 Notice.
If the tenant doesn’t challenge the rent increase by the time it is due to come into effect, they will be deemed to have accepted it and will have waived their right to challenge it. This means the new rent will come into effect on the date specified in the Section 13 Notice (at least 2 months after the date of the Notice).
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