Your guide to section 13 & rent increases in the private rented sector
Here's how landlords and agents can currently increase rents - and how it will work under the Renters (Reform) Bill.
Section 13 of the Housing Act (1988) is a way for landlords to increase rents for their tenancies that run on a periodic basis. This notice will be replaced under the Renters (Reform) Bill, with a mechanism that replicates the existing process under the new tenancy system.
How can private landlords currently increase rents on a tenancy?
- Landlords can include a "rent review clause" in an Assured Shorthold Tenancy, which outlines the terms that have to be followed for rents to be increased. The clause will normally include when a review will take place, how much rents may increase, and the notice that the landlord needs to give their tenant.
- At the end of a fixed-term tenancy, rents can be increased in a new fixed-term contract.
- A landlord and tenant can mutually agree to a rent increase during a tenancy - and both parties should keep a written record of that agreement.
- If the fixed-term moves to periodic at the end of the term or if a tenancy is agreed on a periodic basis from the beginning, landlords need to use a section 13 "Landlord’s notice proposing a new rent" form to increase the rent - giving at least one month's notice.
The rent increase needs to be "fair and realistic" - which means it needs to stay in line with the local market rates.
Can a tenant dispute a section 13 notice of a rent increase?
Tenants can dispute a rent increase through the First-tier Property Tribunal, if they think that the increase is unfair. However, they should first speak to the landlord, to explain their concerns. If an agreement can't be reached, a tribunal can then help set a new rent for the tenancy - which could be higher than the original rent requested by the landlord.
What's changing under the Renters (Reform) Bill for rent increases?
Under the new tenancy system, all tenancies will transition to periodic.
This means that a mechanism similar to section 13 will be the only way that landlords and agents will be able to increase rents.
The notice period that landlords will need to give to their tenants to notify them of a rent increase will double, to two months, and - as is the case now - landlords will only be able to increase rents once a year using this process.
We understand that the government will publish a simple form that agents and landlords will need to complete and serve to their tenant to increase rents. Once the tenant has received the form, they will simply need to accept the amount by paying their rent.
If they want to dispute the amount, they can still do this through the First-tier Tribunal, before the date that they should start paying the new rent amount.
If you would like assistance in increasing your tenants rent do not hesitate to make contact with us. We’re here and ready to help in any way we can!