Agreeing Rent Increases on Residential Property

At the outset of a tenancy, the landlord should agree with the tenant the rent and arrangements for paying it, and if the landlord wishes, arrangements for reviewing it before the tenancy begins and the details should be included in the tenancy agreement.

If the tenancy is for a fixed term Assured Shorthold Tenancy (AST), the agreement should say either that the rent will be fixed for the length of the term or that it will be reviewed at regular intervals and how it will be reviewed.

If the tenancy is a fixed term AST and the agreement does NOT say when the rent will go up, the landlord can only put the rent up if the tenant agrees. If the tenant does not agree, the landlord has to wait until the end of the fixed term before he can raise the rent.

When the fixed term AST ends and the tenancy lapses into a Statutory Periodic Tenancy (SPT), the landlord can agree a rent increase with the tenant, or formally propose a rent increase as soon as the SPT starts under a procedure in the Housing Act 1988.

The formal procedure for proposing a rent increase is for the landlord to notify the tenant of the proposed rent increase using a special form called "Landlord's Notice Proposing a New Rent under an Assured Periodic Tenancy of Premises".

If the tenant agrees with the rent increase (formally proposed or informally), he or she should simply pay it from the date given in the notice.

If the tenant does NOT agree with the proposed increase, he or she must apply to the Residential Property Tribunal (RPT). The RPT will then consider the information at it's rent assessment committee and determine what the rent should be. The tenant must do so before the date on which the new rent would be due. Details of the RPT are at http://www.justice.gov.uk/tribunals/residential-property

There is no appeal against a committee's decision except on a point of law, and there is no ability to award costs.

At Affirmed Choice Letting, the Chichester Letting Agent, we are passionate about the principles of personal customer care, and our guarantee is to provide a unique 'Peace Of Mind' property management service to tenants and landlords. Click here to find out how we help landlords to protect their investment.

Six Vital Steps To Property Letting Peace Of Mind

Tenancy Agreement 

It is vital to create a binding tenancy agreement. If you have not invested in the services of a Lettings Agent to manage this, you may wish to pay a solicitor to draw one up. Even if you have had a Tenancy Agreement from a previous letting, you may need to up-date it. There have been numerous legal changes in the buy-to-let industry, such as the Tenancy Deposit Protection Scheme, which need to be reflected in the agreement.

In addition, the majority of mortgage lenders require landlords to have an Assured Short-hold Tenancy (AST) agreement in order to take out a buy-to-let mortgage. Contracts with tenants usually run for 12 months, although break clauses are commonly inserted into the agreement to allow earlier termination of the contract.

References

References from your tenant's employer and/or previous landlord can help you to assure that the tenant is the sort of person you want to live in your property. It is recommended that you instruct a Lettings Agency to do this for you, but if you would rather gather the references yourself, make sure you allow plenty of time for chasing the potential tenant and following up on their references. A Letting Agency will generally conduct much more rigorous referencing, so much so that some will guarantee the rent and remove the tenant if as result, you still have problems 

Deposits

A deposit from a tenant covers you against both damage to the property and unpaid rent. However, landlords are legally obliged to place the deposit in a Government-approved tenancy deposit scheme. Failure to do so could result in a fine of up to three times the original deposit, plus the deposit itself. In addition, should you wish to evict a tenant at a later date, this will be much harder if the deposit has not been properly protected. Letting Agents will be registered with a government approved scheme, and it is important that you use such a scheme.

Inventory

A robust inventory at the start and end of tenancy are important in avoiding any disputes over the return of deposits. Many prolonged disputes are as a result of a failure to properly assess the property at check in. Taking the time to conduct a thorough inventory using either an inventory company or a letting agent using proprietary software, can save time and hassle later.

Building and Contents Insurance

Most mortgage lenders insist on buildings insurance - so remember to calculate this into your costs! Contents insurance should also be seriously considered. Carpets, appliances, fixtures and fittings can all be insured against tenant damage. It is also possible to insure against payment default from tenants, which may be prudent in the current economic climate. 

Regular Property Checks 

In our experience, many private landlords can be lax when it comes to regularly checking their buy-to-let property. Checks can reveal problems that could become more costly if left to fester. Remember, you are legally obliged to give tenants 48 hours notice before your visit. A letting Agent will usually offer comprehensive visual inspections (at agreed intervals).

At Affirmed Choice Letting, the Chichester Letting Agent, we are passionate about the principles of personal customer care, and our guarantee is to provide a unique 'Peace Of Mind' property management service to tenants and landlords. Click here to find out how we help landlords to protect their investment.