X

Sign Up

or

By signing up I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Sign Up

Sign Up With Facebook, Twitter, or Google

or


By signing up, I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Log In

or


Don't have an account? Sign Up

Forgot Password

To reset your password just enter the email address you registered with and we'll send you a link to access a new password.


Already a PT member? Log In

Don't have an account? Sign Up

  • Buy-to-Let

    Rent increase and New Tenant Act

    Hi

    I have a tenant with me since July 2017, it was started as 6 months AST, then periodic tenancy. The tenant paid 6 months as deposit, because he could not pass affordability test at time. Now I would like to increase the rent, but I have two questions.

    (1) If this tenant and me cannot agree the price increase, I want to ask this tenant out. How to terminate existing periodic tenancy? what ground can I based on? how many months notice much I give to the tenant?

    (2) if the tenant agrees the new price, does it meant it is still same old tenancy and not need to return portion of above 5 weeks deposit back to tenant, under new Tenant Act? or will it be counted as new tenancy and under new Tenant Act, cannot  keep more than 5 weeks rent as deposit?

    Sorry, I've never done this before, also I am still confused by New Tenant Act.

    Please help!

    Thank you in advance.

    0
    0

    1. In a nutshell serve them s21 notice and wait two months. If they don't leave then apply to court for possession.


    1
    0

    If you can't agree a rent increase with the tenant, then, as long as

    a) the tenancy isn't still in the fixed term period

    b) a contractual periodic tenancy with a rent rise clause

    c) it is more than 12 months since the tenancy started and 12 months since the last rent increase

    you can serve a section 13 notice to raise the rent to a market rate. This won't create a new tenancy so your deposit won't be affected. I would still serve the notice if you do agree a new rent with the tenant so it is official without amending the current tenancy agreement.

    The tenant can appeal the section 13 notice and the FTP tribunal will set the rent at what they think is a fair market rent which could be the ame, higher or lower than what you set so you should make sure you do some research on what is a fair market rent.

    Has the tenant been paying the rent for the last 2 years? If so, do you need such a big deposit?

    I wouldn't serve a section 13 and 21 notice at the same time as this gives a mixed message.

    0
    0

    You could agree a rent increase with the tenant and simply document it by way of a memorandum stating what you have done.  If tenant will not agree an increase voluntarily you need to then question the wisdom of using s13, perhaps just go straight to ending the tenancy using s21.  If you extend or renew the tenancy you will need to be careful about the deposit - do you think you still need such a big deposit?  Perhaps the tenant will agree a increase in return for repayment of some of the deposit.

    I would always question the merits of a review or termination unless the current market rent is markedly higher than what is being paid.  I reviewed all mine last year and met all my tenants.  Some clearly could not afford an increase, or not as much as I asked (despite me keeping just below market rent so as not to frighten them) so I took a view on each one.  One left under her own steam, some I just parked.  No need to have unnecessary costs of void and re-letting unless there is a big gain.

    0
    0
    A 6 month deposit is illegal, and has been for decades.

    If it really was a deposit .. and what it is is quite a technical question depending on your agreement and 3xactly wha5 you did .. then you need some proper legal advice or you could be for the high jump.
    0
    0

    A premium (more than 2 months rent) was made illegal in 1977. It was made legal again in 1988. Have a look at https://www.landlordlawblog.co.uk/2012/02...-answered/

    Two facts I had forgotten (which there is more info in the liked article) is that it may be harder to end a premium tenancy before 20 years, and also the tenant can assign the tenancy.

    @doubletiger Did you create the tenancy with a deed or just a contract? You should have use a deed to create a tenancy with a deposit of more than 2 months rent.

    0
    0
    thank you everyone for replies.

    the tenant hadn't have good track record at time he started tenancy two years ago, so I took six months deposit. I disagree another post said it was illegal. it is legal!

    I want to avoid to return most part of deposit for now, so do not want to creat a new tenancy. now I know increase rent won't count as new tenancy. thank you very much for your help. much appreciated.
    0
    0