Rental Increase

[Hadleyiam]

• unsure if this is the right thread please move if necessary*

I am looking for some advice if possible.

I recently received a letter from out letting agents saying our tenancy is due for renewal and the rent will be increased, I dont have a problem with paying the extra amount but after speaking with the landlord (family member) I have been told he has not instructed this rent increase and the lettings agent have done it off their own back, first question is this legal?

Second question is after a quick bit of reading online shouldn't they have issued me a form for the rental increase under section 13 of the housing act 1998

I have been on an AST (assured shorthold tenancy) for the last year (2 6monthly agreements) I only ask as the lettings agents havent been the best and something about this seems underhanded but I'm not sure.

I understand they are a business and are just trying to make as much as possible, but they work on behalf of the landlord so surely he has the last say.

Any advice would be great.

[NickCQ]

If the letting agent actually manages the property then I would expect that increasing the rent where it makes commercial sense is part of their remit. The landlord not being aware doesn’t matter as he has delegated management.

However, if the letting agent is trying something dodgy (ie charging you more rent but not remitting it to the landlord), then they are effectively charging you tenancy fees, which are now illegal.

Either way they need to send you the correct forms so don’t pay up until they cross the t’s and dot the i’s.

[Hadleyiam]

Thanks for the input I'll get back in touch and see what paperwork they send across.

They have been pretty useless so far, we have paid rent ontime every month but the landlord has had to chase them for his payment and they also lost the key to the house that they had within a week of us moving in!

[Tyre Smoke]

If the landlord is a family member, why don't you deal with them directly?

[JulianPH]

Tyre Smoke said:

If the landlord is a family member, why don't you deal with them directly?

^^^ This.

[NickCQ]

Missed the bit about LL being a family member. Presumably they feel a bit awkward about asking for more money so have got the agent to do it so they can preserve deniability.

[nicklaus1988]

Hadleyiam said:

*unsure if this is the right thread please move if necessary*

Second question is after a quick bit of reading online shouldn't they have issued me a form for the rental increase under section 13 of the housing act 1998

I have been on an AST (assured shorthold tenancy) for the last year (2 6monthly agreements) I only ask as the lettings agents havent been the best and something about this seems underhanded but I'm not sure.

As you're still in an AST and the tenancy hasn't gone periodic, no need for a section 13 form and the agent or landlord can ask for a rent increase.

Nothing sounds particularly underhand, rather that your family member doesn't want to ask directly for the extra rent.

[Sir Bagalot]

Don't sign a new agreement. Advise the agent you're quite happy moving to statutory periodic tenancy, they will push you as no doubt will charge you and the LL.

Increase in rent should be given with a S13 although you can ignore it if you wish

[anonymous-user]

Sir Bagalot said:

Don't sign a new agreement. Advise the agent you're quite happy moving to statutory periodic tenancy, they will push you as no doubt will charge you and the LL.

Increase in rent should be given with a S13 although you can ignore it if you wish

This, they can only increase the rent if you sign a new agreement or have issued an S13. If you are at the end of the agreement just tell them you want to go period now.

I suspect the agent will huff and puff and tell you that the Landlord wants the security of another 12 month agreement and if you don't sign will look for new tenants. Obviously there is no way a land lord would go through the expense and hassle of this, especially if you are good tenants.

[Hadleyiam]

Thanks for all the replies everyone, basically its family member got divorced, met new partner and wanted to move in with them, I was in a tough situation and needed somewhere so me and my girlfriend have moved into his place and are paying cheap rent (basically to cover the mortgage) while we are trying to save up for our own mortgage, so I dont mind the rent going up. Just means saving for a little longer.

I dont think ignoring a S13 would be a good idea because I imagine they will serve a S21 aswell and it will basically be pick one or the other. I agree with the periodic tenancy and think that will be best for us, they would have to give us 2 months notice before eviction I believe? (Someone can correct me if I am wrong)

Thanks for the advice its given me something to think about and discuss.

[superlightr]

Joey Deacon said:

This, they can only increase the rent if you sign a new agreement or have issued an S13. If you are at the end of the agreement just tell them you want to go period now.

I suspect the agent will huff and puff and tell you that the Landlord wants the security of another 12 month agreement and if you don't sign will look for new tenants. Obviously there is no way a land lord would go through the expense and hassle of this, especially if you are good tenants.

obviously! ???

It is upto the landlord at the end of the day.
Our advice to the landlords we look after as Letting Agents is to recommend to the owner what the open market rent should be and to suggest an increase each year to this amount or just below. The owner can decide to do this or not.

If a tenant does not want to sign a new TA for 12 mth then the LL should increase the rent as the landlords have now less security so to compensate by increasing the rent. If a tenant is happy for a new fixed term then its worth negotiating the rent increase to a lesser amount so that both sides get what they want.

If tenant wanted a roll on and no increase then they want their cake and to eat it. There is no security for the LL and no extra rent. worse of both worlds.
Obviously we then recommend to the landlord that we re-let at a realistic market rent and get the security of a new fixed term for the LL at the market rent.

Its balancing keeping good tenants and getting the best rental returns - some landlords will discount the rent to keep a good tenant. In my experience it does no one any favours by not increasing the rent each year even if its a small amount as otherwise you end up with £0 increase for 3 years and then a big jump when the LL realises they are loosing a lot each a year and the tenant then is upset at being asked to pay a large increase.


s13 !!?? we never have to issue a s13 - its all by negotiation. either its agreed or its not.
a s13 is not really the best way forward or good business practice. its forcing something.

Edited by superlightr on Tuesday 14th January 18:56

[anonymous-user]

superlightr said:

If tenant wanted a roll on and no increase then they want their cake and to eat it. There is no security for the LL and no extra rent. worse of both worlds.
Obviously we then recommend to the landlord that we re-let at a realistic market rent and get the security of a new fixed term for the LL at the market rent.

So you would advise a landlord who has a good tenant who always pays on time to evict them and get new tenants who are prepared to sign a new 12 month contract to gain a slight rent increase.

You would advise them to evict the tenants and risk having a void with no tenants?
You would advise them to evict tenants and then lose over 50% of the first months rent in fees?
You would advise them to evict the tenants and get new tenants who are an unknown entity?

All of that hassle for an extra £20,£30 or £40 a month?

Personally I think having tenants who always pay the rent, look after the property and don't complain too much are worth their weight in gold, if they want to go periodic then I have no problem at all.

[dai1983]

Why is he using a letting agent if he’s related to you and letting it to you below market value? The only reason we used one was because we were 2-4 hours away.

[superlightr]

Joey Deacon said:

superlightr said:

If tenant wanted a roll on and no increase then they want their cake and to eat it. There is no security for the LL and no extra rent. worse of both worlds.
Obviously we then recommend to the landlord that we re-let at a realistic market rent and get the security of a new fixed term for the LL at the market rent.

So you would advise a landlord who has a good tenant who always pays on time to evict them and get new tenants who are prepared to sign a new 12 month contract to gain a slight rent increase.

You would advise them to evict the tenants and risk having a void with no tenants?
You would advise them to evict tenants and then lose over 50% of the first months rent in fees?
You would advise them to evict the tenants and get new tenants who are an unknown entity?

All of that hassle for an extra £20,£30 or £40 a month?

Personally I think having tenants who always pay the rent, look after the property and don't complain too much are worth their weight in gold, if they want to go periodic then I have no problem at all.

If wasn't very clear in what we recommend ill try and expand ;
We would give the owner the current open market rent and view as to how easy to relet and let them decide. Its their property. Some properties are easy to let some take longer. its a balancing act.

We would make recommendations but yes a roll on and no rent increase is not generally that good for the landlord. You are giving away 2 negotiation aspects. Security of tenancy is often high on our landlords aim ie 12/24mth lets a good rent is 2nd. Yes we also want good tenants but there comes a point when their rent lag behind way too much if you don't keep gently increasing the rent each year.

We took on a property the landlord had a tenant in paying £750pcm I think for a 2 bed house 5 years ago. They didn't increase the rent. We took it on and recommended the current market rent should be about £1000pcm. but to offer the tenant £950 renewal. The tenant did not want to pay the increase to £950 and left. We relet it at £1050 with new tenant moving in with a 2 week gap (some decorating was done). easy house to re-let.

so yes for a year its fine to do what you suggest but how long do you keep not putting up the rent? and not have security of a fixed term?

We also try and make sure our tenancies avoid renewals in Nov and December as they are harder to let at that time of year.

We look after about 300 properties so deal with rent increases/renewals daily. Its also good practice to have the tenancy renewed to be kept up-to-date with current legislation - there has been a lot of changes with regards to the tenant fee act hence changes to the TA to help protect the landlord.

Edited by superlightr on Tuesday 14th January 20:04

[dmahon]

Thank god I could buy early and wasn’t exposed to that attitude for too long ^

OP situation sounds strange. Why would you use an agent for a family member who you were charging under market rent?

[Condi]

If you're also just paying the mortgage it doesn't sound like someone is paying tax on the income, else you need to be 20% + agents fees at least more than the mortgage costs.

[Hadleyiam]

We used a letting agent to cover both of our backs.

We are paying a little bit more than the mortgage to cover the fees and he has just received his tax bill, everything is above board.

[superlightr]

dmahon said:

Thank god I could buy early and wasn’t exposed to that attitude for too long ^

OP situation sounds strange. Why would you use an agent for a family member who you were charging under market rent?

seriously eh? What attitude? Its a balancing act to get the best rent, renewal and to keep good tenants. We work for the landlord. -

Are you saying a landlord should not get the best rent they can and subsidise a tenant renting?

We try to ensure our landlords get either a renewal on a fixed term or a rent increase on a periodic or ideally fixed and increase for the landlord WITHOUT losing good tenants. if a landlord does not want to increase and is happy with a periodic - that's fine- its their option. We just don't recommend doing this for too long from our experience as its bad for both. Its negotiation. I find that strange why you find that concept as an attitude?

It is always the owners choice a what they want to do we just give them the best advice on the current market so they can be informed. We are successful agents and work well with our tenants and landlords. We want tenants to stay. That why I keep saying its by negotiation and we want to keep good tenants.

Edited by superlightr on Wednesday 15th January 07:48

Edited by superlightr on Wednesday 15th January 07:50

[Tyre Smoke]

Superlightr I hope you are just terrible at expressing yourself, but suspect you are not and are all that is wrong with letting agents.

I broke up with my wife and ended up with a letting agent just like you. The tennant (me) was treated like a workshy criminal and every opportunity to side with the landlord was taken.

I have now settled in a lovely barn conversion paying £1550 a month rent. I have a great letting agent who are well aware I am not a workshy criminal and look after the place well. It's in the middle of nowhere which suits me perfectly but is not for everyone. I will have been there three years at the end of my current agreement and will look to renew on a longer lease if possible. I have not had a rent increae at all since moving in. Why? Because the previous tennants didn't pay the rent and disappeared overnight. The place was empty for six months (like I said not to everyone's taste) until I moved in.

My landlord lives miles away, but I'm pretty sure come renewal time my letting agent will be doing their level best to keep me there as I'm a good tennant who looks after the place and always pays on time. I would expect an increase after three years, but not a massive hike. The landlord knows this and also knows that it might take a long time to re-let.

[superlightr]

Tyre Smoke said:

Superlightr I hope you are just terrible at expressing yourself, but suspect you are not and are all that is wrong with letting agents.

I broke up with my wife and ended up with a letting agent just like you. The tennant (me) was treated like a workshy criminal and every opportunity to side with the landlord was taken.

I have now settled in a lovely barn conversion paying £1550 a month rent. I have a great letting agent who are well aware I am not a workshy criminal and look after the place well. It's in the middle of nowhere which suits me perfectly but is not for everyone. I will have been there three years at the end of my current agreement and will look to renew on a longer lease if possible. I have not had a rent increae at all since moving in. Why? Because the previous tennants didn't pay the rent and disappeared overnight. The place was empty for six months (like I said not to everyone's taste) until I moved in.

My landlord lives miles away, but I'm pretty sure come renewal time my letting agent will be doing their level best to keep me there as I'm a good tennant who looks after the place and always pays on time. I would expect an increase after three years, but not a massive hike. The landlord knows this and also knows that it might take a long time to re-let.

perhaps im not good as explaining. I keep saying we want good tenants to stay and its upto the landlord if they wish us to negotiate a rent increase/renewal etc. Its a balancing act. Tyresmoke why would you think if we were managing the property you are in we would want a "massive" hike based upon the history you mentioned and you are a good tenant? We would not. We would recommend to the owner what the current market rent should be weighing that up with possible void periods and disruption. So there may be no increase but we would recommend that a new tenancy is signed for 12/24 mths even of no increase - which you have said that what you want to do. So everyone is happy?