Rental Increase Question

[flg728]

We have a rental 3 year rental agreement. The managing agent just phoned that we were due for an increase between 3-7% in May but there was an oversight on their end. We had a verbal agreement to a fixed rent for 3 years and did not realise we signed the lease stating they were able to increase the rent. My question is when can they do the increase if it says annually and we are already 6 months into the second year or tenancy? Thanks for you help

What do you have in writing? Any emails? Lease etc?

Unfortunately the old adage of verbal agreements is true: they’re worth the paper they’re written on.

If you signed a lease that has these terms, that is your terms.

if lease says an annual increase does that mean whenever they want or the annual term dates? do they have to give you notice of this?

I would take it to mean once a year but if no datea are specified they can do it any time

lease just states that both parties agree to negotiate an annual rental increase which shall be between 3-7%. he is saying i need to pay the increase in the next payment which is in 2 weeks. he proposed 3%

are they allowed to give 2 weeks to an increase? that seems quite unfair

If it says you have to agree then he can't just give you a figure and expect you to pay it. You need to arrange to meet to discuss and negitiate what the rise will be and when it will take effect. I would have thought they need to give you a months notice, but if it doesn't specify in your lease then he can do it whenever as nothing was formally agreed.

i found this on gov.uk

How your landlord must propose a rent increase
If the tenancy agreement lays down a procedure for increasing rent, your landlord must stick to this. Otherwise, your landlord can:

renew your tenancy agreement at the end of the fixed term, but with an increased rent
agree a rent increase with you and produce a written record of the agreement that you both sign
use a ‘Landlord’s notice proposing a new rent’ form, which increases the rent after the fixed term has ended
Your landlord must give you a minimum of one month’s notice (if you pay rent weekly or monthly). If you have a yearly tenancy, they must give you 6 months’ notice.

I would assume this would mean they could review the rent annually on the anniversary of the lease commencement date.

The presumption (for commercial leases at least) is that "time is not of the essence" in rent review clauses. This means that even if the lease mentions time limits for giving notice, they are not binding. I'm not aware of anything saying this rule does not apply to residential leases.

So I think it's likely they could implement the review and backdate the increase to May.

Is there any mechanism for determining the rent if negotiations fail? Recourse to a third party? If not, the clause could fail for uncertainty.

However, at least 3% is at the bottom of the range, and it doesn't sound as if they're trying to backdate it?

Are the agents a member of a professional body / do they have a complaints procedure? You could threaten to use that.

I presume you don't have any proof of the verbal agreement not to increase the rent? No email trail referring to it?

I'm looking for the email where we agreed to a fixed term for the 3 years. No, they do not want to backdate the increase to May but I think 2 weeks notice is unreasonable. I find the entire increase irritating as they take forever to do repairs etc

What does the email say exactly? Does it say the rent will be fixed for those three years?

If you have been there over a year they can increase it. There isn’t a set window. Usually it is on the annual basis but not always.

we had agreed to 3 years at a set rent but i sadly think this was a verbal agreement so i don't have a leg to stand on with that. but i do want to know my rights in terms of when the increase can happen and how much notice they need to give us

Contact the shelter advice line.

Rent increases have to be given with a minimum of 1 months notice, via a Section 13 notice. Rent can only be increased annually and increases cannot be backdated

If you have been there over a year they can increase it. There isn’t a set window. Usually it is on the annual basis but not always.

That's if your fixed term contract has expired. The op is mid way through a three year fixed term so the landlord's ability to increase the rent depends on the terms of the lease.

thanks BexleyRae that's what i was thinking after reading the regs on gov.uk. so an increase for december rent is reasonable but not what i want lol

A s13 notice is only needed where the fixed term contract has expired, which is not the case here.

I would second calling Shelter

Ah! Missed the 3 year fixed term, you need to read your agreement, unless it says rent can be increased within the fixed term, then it cannot be increased until the end of the term

my lease clause just states that both parties agree to negotiate an annual rental increase which shall be between 3-7%. that's it no terms etc

flg728

You say no terms but the terms are that it will be negotiated at a rate between 3% and 7%. As they have offered the lowest rate rise I assume you'll accept rather than negotiate it because there is no room to negotiate down.

Did you not read the terms of the lease before signing it?

when i say terms i meant to say procedure. there are no notes regarding when they can increase, how, notice etc.

read the terms of the lease, are you supposed to do that? what a ridiculous question

If that's all the contract says and there is no mechanism for resolving a disagreement e.g. by reference to a third party I think there is a real chance the clause is void for uncertainty and therefore unenforceable.

See e.g. this article which discusses whether an increase linked to a vague reference to inflation would be sufficiently certain. www.landlordlawblog.co.uk/2017/03/16/landlords-interpretation-inflation-rent-review-clause-correct/
Your lease seems even more vague if all it says is that you will agree an increase between 3% and 7%.
An agreement to make an agreement is not sufficiently certain to be enforceable.

Of course, if you refuse to agree to any increase the landlord probably isn't going to get any better at doing repairs and he can serve a s21 notice at the expiry of the three years. So you might want to pick your battles.

read the terms of the lease, are you supposed to do that? what a ridiculous question

Are you joking?

Why would you sign a lease without reading it??? Its a contract!

read the terms of the lease, are you supposed to do that?

Are you for real?

So you just sign any legal document put in front of you without reading?