Statutory rules for rent increases for assured tenants

Section 13 of the Housing Act 1988 allows a landlord to raise the rent on a periodic assured or assured shorthold tenancy by giving the tenant a notice of increase in the prescribed form.

A landlord can only use this process to increase the rent once every 52 weeks.[1]

A landlord cannot use a section 13 notice during the first 52 weeks of a contractual periodic tenancy. The 52 weeks run from the start of the tenancy, including any fixed term.[2]

A landlord can issue a section 13 notice during the fixed term of an assured or assured shorthold tenancy, but the rent increase must take effect after both the:[3]

• tenancy has become statutory periodic

• minimum period following service of the notice has expired

A tenant who has succeeded to a periodic assured tenancy under the succession provisions of the Rent Act 1977 or the Rent (Agriculture) Act 1976 will be treated as a statutory periodic assured tenant and the section 13 procedure can start immediately.[4]

Where a Tribunal has reduced an excessive rent under section 22, an increase cannot take effect until the anniversary of that determination.

Rent review clause

A section 13 notice cannot be used to increase the rent for a contractual periodic tenancy that contains a rent review clause.[5]

Where a statutory periodic tenancy arises at the end of a fixed-term tenancy, a rent review clause no longer applies. To increase the rent the landlord must use the section 13 procedure or obtain the tenant’s agreement.[6]

Notice of increase

The landlord must serve a notice of increase of rent in the prescribed form (Form 4). The information on the form includes a note to the tenant advising them of their right to refer the increase to a First-tier Tribunal (Property Chamber).[7]

The increase cannot take effect earlier than the minimum period following service of the notice. The period reflects the law governing notice to quit. The length of notice required for a tenancy of a period of:[8]

• a year, is six months

• less than a month, is one month

• a month or more (but less than a year), is one period of the tenancy

The new rent must take effect at the beginning of a new period of the tenancy.[9] The first day of a period of the tenancy can be different from the date the rent is paid.[10] For example, where a weekly tenancy begins on a Monday but rent is paid on a Friday, the notice must specify the new rent starts on a Monday.[11]

The increased rent applies from the expiry of the notice period unless either the:[12]

• tenant refers the notice of increase to the Tribunal

• landlord and tenant agree to a different rent

The Tribunal does not have the power to judge whether a section 13 notice is valid or invalid. The County Court can make a judgment about notice validity.[13]

Referral to the First-tier Tribunal

A tenant who disagrees with the rent increase can refer the notice of increase to the First-tier Tribunal.[14]

The tenant must make the referral:

• before the notice period expires[15]

• on the form prescribed in the relevant regulations[16]

The prescribed form is Form 6. An alternative Form Rents 1 is available on GOV.UK.

The Tribunal has the discretion to direct a tenant to correct any errors in their application as long as the application substantially complies with the requirements.[17]

The Tribunal has the power to require the landlord or tenant to provide information it needs to make its decision.[18] The Upper Tribunal held the First-tier Tribunal can use this power to gather necessary information where the tenant did not use the prescribed form.[19]

The Tribunal does not have the power to extend the time limit for the referral. Referred means received by the Tribunal.[20]

First-tier Tribunal decision

The Tribunal determines a market rent for the property, which is the rent that could reasonably be expected to be obtained in the open market for a similar property let on similar terms.[21]

The new rent applies from the date specified in the landlord's notice of the increase. The Tribunal can decide that the new rent applies from a later date, up to the date of the determination, if this would otherwise cause the tenant undue hardship.[22] It might make a decision some time after the notice period expires. Events that happen after the date the new rent was due to start should not affect the calculation.[23]

Agricultural occupiers

The principles governing rents for assured agricultural occupancies are the same as those covering assured tenancies.[24]

Section 6 Housing Act 1988 allows a landlord to vary the terms of a statutory periodic tenancy.

The procedure can only be used in the first 12 months of the statutory periodic tenancy.[25] It is not available to landlords of contractual periodic tenants.

This procedure is for landlords who want to change the terms of a tenancy because it has become statutory periodic after the expiry of a fixed term.

How notice of variation must be given

The landlord or the tenant may serve a notice proposing a variation in the terms of the tenancy. This must be done on a prescribed Form 1.[26] The notice will take effect three months from its date of service, unless it is referred to the Tribunal.

The application goes to the First-tier Tribunal (Property Chamber) and the Tribunal varies the terms of the tenancy, including the amount of the rent. The rent could go up or down.

Appeals to the First-tier Tribunal (Property Chamber)

Appeals to the First-tier Tribunal (Property Chamber) must be made on a prescribed Form 2.[27]

The Tribunal must make a decision about other proposed variations to the tenancy before determining a market rent. The rent determined reflects those variations. A rent increase takes effect from the date decided by the Tribunal but cannot be earlier than the date specified in the notice.

The Tribunal can consider a landlord's application for variations under section 6 and a rent increase under section 13 together.

Rent increases for tenants of private registered providers of social housing (PRPSH) are regulated by the Social Housing Regulator.

The landlord may be able to increase the rent in line with a rent review clause in the tenancy agreement if the relevant notice has been given to the tenant.

Timing of the rent increase notice

The House of Lords provided some guidance on the process of rent review increases for assured tenancies of registered social landlords.[28] The tenant complained that the landlord had served an ineffective rent increase as the notice was served after the rent variation date. On appeal, the House of Lords held that the notices were valid and that all that was required (as was set out in the agreement) was that the landlord needed to give four weeks' notice.

Section 22 of the Housing Act 1988 allows an assured shorthold tenant to refer the rent to the First-tier Tribunal (Property Chamber) for an assessment as to whether it is excessive.[29]

The tenant can make the application once. The application must be made on a prescribed Form 7.

For tenancies that began before 28 February 1997 an application can only be made during the initial fixed term and is not available for subsequent agreements.

For tenancies that began on or after 28 February 1997 an application can only be made during the first six months of the tenancy.

Section 22 may be of limited use, especially if the fixed term is of short duration or if the tenancy is periodic. The landlord can legally evict the tenant very easily after the first six months or after the fixed term has expired.

Disputes about the validity of notices of increase and tenancy variation are usually determined by the First-tier Tribunal (Property Chamber). No fee is payable and there is no risk of an adverse costs order.

The Tribunal can only hear applications where the correct notice has been served.[30]

A dispute about whether an increase is valid could be dealt with by applying to the County Court for a declaration.[31]

Use of section 21

A section 13 notice or referral to the First-tier Tribunal does not prevent a landlord from giving the tenant a section 21 notice.