UK Landlord Forum / Life

Here's where my mind is wandering to, which in itself may be incorrect....this is an 'in theory' question...

I have a number of properties let through the same agent, and as part of their standard contract there is the following clause in relation to rent increases:

1.7.8 Rent Increase
1.7.8.1 If for any reason the Tenant remains in possession of the Property, or the lawful Tenant of the
Property, for more than 12 months, then the Rent will increase once each year.
1.7.8.2 The first increase will be on the first Rent Due Date more than 364 days after the commencement
date.
1.7.8.3 Subsequent increases will be on the first Rent Due Date more than 364 days since the last rent
increase.
1.7.8.4 In clauses 1.7.8.2 and 1.7.8.3 the Rent will increase by the amount stated for the annual increase
in the CPI (Consumer Prices Index as published by the Office of National Statistics) as quoted for the
month two months prior to the month of the increase.
1.7.8.5 Not applying the rent increase at the first Rent Due Date more than 364 days after the
commencement date, or the last rent increase date, will not then prevent the Landlord applying an
increase on any future Rent Due Date.
1.7.8.6 In clause 1.7.8.5 the Rent will increase by the amount of the increase in the CPI (Consumer
Prices Index) from two months before the start of the tenancy or the last increase, whichever is the later,
to the month two months prior to the month of the increase.

I'm thinking forward, and assuming that Section 21 disappears at some point. Subsequently, if upon trying to apply a rent increase the tenant says no thank you, we'll just stay as we are on our periodic tenancy paying the same amount thank you very much I could I believe use a Section 13 to help the process along. However, I've read that a section 13 can only be used when there is no Rent Review clause in the contract, which clearly we have.

So was section 21 the only thing to change / disappear (humour me....) and using my example above, would I be completely stuck with no ability to enforce a rent increase or remove the tenant?

You would have exactly the same ability to increase the rental by CPI as you have now. You can't use a 13 notice and your tenant can't decline a rent increase that meets the criteria (in fact these terms mean you should increase the rent every 12 months because once you don't you're always behind).

We don't know what the new government intends to do to replace s21, but in Scotland and in the previous government's proposed changes, there were additional routes available to remove a tenant.

The only bit that fundamentally changed was that there has to be a reason to get rid of the tenant (which, to be fair, there usually is in every case anyway, landlords rarely wake up one morning and decide to evict a tenant.

Thanks for that. For sake of argument let's say I want to increase the rent by 6%, but CPI is I think 2.4% right now. With the clause I have in the contract would I be able to use section 13 or am I restricted to the said clause only?

Quote from: jpkeates on July 23, 2024, 05:13:37 PMThe only bit that fundamentally changed was that there has to be a reason to get rid of the tenant...

Is - "Tenant refused to participate in my proposed rent increase and profiteering" - a valid reason?

Quote from: RKF66 on July 23, 2024, 05:40:02 PMThanks for that. For sake of argument let's say I want to increase the rent by 6%, but CPI is I think 2.4% right now. With the clause I have in the contract would I be able to use section 13 or am I restricted to the said clause only?

Section 13 is not available to you. You are restricted to the increase and its effective date that you offered to the tenant and which they agreed to.

Quote from: Hippogriff on July 23, 2024, 06:00:14 PM

Quote from: jpkeates on July 23, 2024, 05:13:37 PMThe only bit that fundamentally changed was that there has to be a reason to get rid of the tenant...

Is - "Tenant refused to participate in my proposed rent increase and profiteering" - a valid reason?

Not presently.

If your Tenancy Agreement is a Contractual Periodic Tenancy that has an initial term but never terminates except under the terms of the break clause then no Statutory Periodic Tenancy will be created and the terms of the agreement will remain in place along with it's terms.

The terms you quote are quoting give you some flexibility but wouldn't you prefer it is be stated upfront and made prominent to the Tenant right from the start.  If the increase was CPI+3% and applied automatically then you would have some security.

The concern I would have is what the Agency agreement says about what happens if you dump them, many have confusing terms but basically mean that you have to keep paying them for 2 years after you dump them if they introduced the Tenant.

Quote from: RKF66 on July 23, 2024, 04:20:49 PMHere's where my mind is wandering to, which in itself may be incorrect....this is an 'in theory' question...

I have a number of properties let through the same agent, and as part of their standard contract there is the following clause in relation to rent increases:

1.7.8 Rent Increase
1.7.8.1 If for any reason the Tenant remains in possession of the Property, or the lawful Tenant of the
Property, for more than 12 months, then the Rent will increase once each year.
1.7.8.2 The first increase will be on the first Rent Due Date more than 364 days after the commencement
date.
1.7.8.3 Subsequent increases will be on the first Rent Due Date more than 364 days since the last rent
increase.
1.7.8.4 In clauses 1.7.8.2 and 1.7.8.3 the Rent will increase by the amount stated for the annual increase
in the CPI (Consumer Prices Index as published by the Office of National Statistics) as quoted for the
month two months prior to the month of the increase.
1.7.8.5 Not applying the rent increase at the first Rent Due Date more than 364 days after the
commencement date, or the last rent increase date, will not then prevent the Landlord applying an
increase on any future Rent Due Date.
1.7.8.6 In clause 1.7.8.5 the Rent will increase by the amount of the increase in the CPI (Consumer
Prices Index) from two months before the start of the tenancy or the last increase, whichever is the later,
to the month two months prior to the month of the increase.

I'm thinking forward, and assuming that Section 21 disappears at some point. Subsequently, if upon trying to apply a rent increase the tenant says no thank you, we'll just stay as we are on our periodic tenancy paying the same amount thank you very much I could I believe use a Section 13 to help the process along. However, I've read that a section 13 can only be used when there is no Rent Review clause in the contract, which clearly we have.

So was section 21 the only thing to change / disappear (humour me....) and using my example above, would I be completely stuck with no ability to enforce a rent increase or remove the tenant?

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Quote from: David on July 24, 2024, 09:25:29 AMIf your Tenancy Agreement is a Contractual Periodic Tenancy that has an initial term but never terminates except under the terms of the break clause then no Statutory Periodic Tenancy will be created and the terms of the agreement will remain in place along with it's terms.

Those terms would also be automatically be carried into any non-contractual periodic tenancy. Why mention a contractual periodic tenancy?

For several reasons, first of all it will prevent the Agent earning money on signing Tenant up for new Tenancy Agreements, secondly because it will remain a single tenancy rather than two if there is a failure to protect deposit or serve PI etc.  Also because it can equalise the notice required to end the lease, so both parties have to give two months notice.

Quote from: jpkeates on July 24, 2024, 09:58:16 AM

Quote from: David on July 24, 2024, 09:25:29 AMIf your Tenancy Agreement is a Contractual Periodic Tenancy that has an initial term but never terminates except under the terms of the break clause then no Statutory Periodic Tenancy will be created and the terms of the agreement will remain in place along with it's terms.

Those terms would also be automatically be carried into any non-contractual periodic tenancy. Why mention a contractual periodic tenancy?

All of those things are true. But they're not relevant to this question.

I've been wondering about this for some time. I seem to remember the housing lawyer David Smith saying that a rent review clause doesn't automatically carry into an SPT and Shelter and a few solicitor websites seem to agree, although in others it's less clear. In the case above the wording of the clause may bind the landlord contractually to the stated increases. However, I think a more basic clause that only mentioned an increase after the first year of a two year fixed term tenancy would be different.

A rent review clause can only not carry forward if it's time limited in some way. Otherwise when an SPT is created, "the other terms are the same as those of the fixed term tenancy immediately before it came to an end, except that any term which makes provision for determination by the landlord or the tenant shall not have effect".

So if, for example, if there's a 12 month fixed term, the rent review term refers to the "first" anniversary or after 12 months, it won't carry forward into any SPT.