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Private landlords need to increase rent at certain times to maintain their investment and ensure that the rent their tenants pay is in line with similar properties in the area. As a landlord, it's important you do this in a legal and proper way so that tenants receive the right amount of notice before a rent increase takes effect.
Increasing the rent during a fixed-term tenancy
Private landlords aren't allowed to increase the rent for their rental property during a fixed term agreement. This means that the rent can't be increased until the fixed term comes to an end.
Landlords can either propose a renewal with a higher rent, following the end of a fixed term, provided that tenants are given the required notice period, which is usually two months for fixed term tenancies.
After the fixed term has ended, landlords can also let the tenancy become a periodic tenancy, which means that the tenancy will now be on a rolling contract from month to month, and increase the rent this way.
Increasing the rent for periodic tenancies
If your tenants are renting a property on a periodic tenancy, then you are able to increase the rent once a year but keep in mind that there are restrictions. You must ensure that any increase is fair and realistic, and is in line with the price of other rental properties in the area.
You also need to serve your tenant with the appropriate notice period. If the rent is paid monthly or weekly, then one month's notice will be required, and if the rent is paid on an annual basis, then you need to give six month's notice.
Rent review clauses for fixed-term tenancies
Landlords can put the rent up during a fixed-term if they have specifically included a clause to review the rent in the original agreement, which states that the rent can be increased.
A rent review clause must set out when an increase will happen, how much notice will be given, and how the rent will be increased, usually by including a formula that will be used to calculate the rent increase.
Using a section 13 notice to increase the rent
Private landlords have the option to serve a section 13 notice to increase the rent on their property. This is particularly useful if a tenancy agreement doesn't include a rent review clause.
A specific form must be used to give tenants valid notice of an increase in their rent. Section 13 can only be used once a year, and tenants should be given at least one month's notice of any increase if the tenancy is periodic one. If the tenancy is for longer than a monthly period, then tenants are entitled to receive more than a month's notice.
As a private landlord, you're able to serve a section 13 notice during the fixed term of a tenancy, but the rent increase can't take effect until the fixed term has ended. If a tenancy doesn't start with a fixed-term, then a section 13 notice cannot be used during the first year of the tenancy.
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