Rent Reviews

Rent Reviews

Rent reviews – do you know what you can do?

Posted on July 19, 2012 by admin

At Gordon Barker Residential lettings we believe there are 3 main ways to review the rent on your rental property; by agreement between landlord and tenant at anytime, by way of a rent review clause in your tenancy agreement or under section 13 of the Housing act 1988.

By agreement between landlord and tenant is self explanatory and rent review clause the same, but beware that any such review clause must comply with the Unfair Terms in Consumer Contracts Regulations and be seen as fair to both parties, a general clause that allows the landlord to review and increase the rent as he/she sees fit is likely to be unenforceable. However if there is a valid rent review clause in the agreement an increase upon the rent is more likely to be enforceable, especially if it can be justified by a recognised/established factor.

Section 13 of the Housing Act 1988 uses a formal procedure to propose a rent increase, this can only be increased after a fixed term has ended and this facility can only be used once every 12 months. It is advised that should you look to increase the rent through this process you enlist the help of a legal professional as a proposal could be referred to the Rent Assessment Committee and if the proposal is too high or does not follow the prescribed form it could be struck out.

Increasing rent is a risky procedure and should always be done in line with current legislation and also market value for the property. Aim too high and you will lose the good tenant you have which will cost you more in the long term to recoup the lost rent should they vacate. An increase of just £25 on an £800 per month property would take 32 months to recoup should the property be empty for just one month…is that rent increase worth it?? And that’s without the expensive fees you pay to a high street agency to re-let the property for you…

What are your thoughts??

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