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AST to SPT rent increase

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Author Topic: AST to SPT rent increase  (Read 49 times)
Newbie
Posts: 49

I like property

« on: March 21, 2020, 08:02:46 PM »

Hello all,

My tenants of 2 years (two 12 month ASTs) have decided not to sign another 12 month AST and would like to switch to an SPT - I never increased the rent between new contracts as they're good tenants. In order to mitigate my risk however, I did set the expectation that I'd need to increase the rent in the event of an SPT (as I was prepared to keep the rent asis for a 3rd year). (If they choose to vacate in December, for example, it'll be very tough to rent the property quickly thereafter.)

Is there a "standard" percentage increase anyone would recommend when switching from an AST to an SPT? I did some research and a comparable property is, at a minimum, commanding a 14% higher monthly rent (18% higher is the average). Due to personal circumstances (and the C-19 virus), I'm not in a position to remarket the property at current market rates at the moment. Would a 10% increase be fair for switching to the SPT? That would still be well below current rates for a comparable rental property in the area.
Global Moderator
Hero Member
Posts: 3399

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« Reply #1 on: March 24, 2020, 11:51:02 AM »

Is there a "standard" percentage increase anyone would recommend when switching from an AST to an SPT?

I have never contemplated such a thing. You're the first person to ever suggest something like that... a rent increase due to a change like this. Yes, for market rates. Yes, for improvements. Yes, for a established pattern year-to-year. But no to this idea... maybe you've not had any responses because it's as alien to other Landlords as it is to me? Maybe others will pipe-up.

Not increasing the rent year-on-year can often leave you with gaps to fill further down the line. It seems you're already falling behind through conscious inaction. With everything going on it's more likely you want them to stay... and, to be fair, it's more likely they'll want to stay... captive audience... but not one to be taken advantage of. There could be bigger worries coming your way than a rent increase... maybe even a non-payment scenario.

I'd be minded to let sleeping dogs lie and see how things pan-out.
Sr. Member
Posts: 332

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« Reply #2 on: March 24, 2020, 02:06:09 PM »

Well, since you can't actually prevent the arising of SPT, I would say no.

In any event, if you want to increase the rent, either the tenant would have to agree or you serve the appropriate notice, at which point your tenant is free to challenge the increase by going to the FTT for a rent determination.
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