Top Tips for Landlords on Rent
Many landlords are unsure of where they stand when it comes to negotiating rent increases and dealing with tenants who fall into arrears. The law on rent is complex, and governed by a number of rules, stipulations and exceptions. As a landlord, you need to know them, to ensure that you’re operating within the law and that both you and your tenant have a fair deal.
- Increase Rent by Agreement
The most painless way to increase rent is by agreement with the tenant. Ideally this should be done by getting the tenant to sign a new tenancy agreement or a renewal form in order to make it legally binding and avoid future attempts to wriggle out of the updated agreement. If you are loathe to go to the trouble of doing this, at least ensure that you have a written record of the tenant’s agreement to pay the new price. The best method is to write them a letter detailing the rent increase, which they then sign and date to signal their assent. Keep the evidence of your new arrangement somewhere safe in case of disputes.
- Use a Notice of Rent Increase
If a tenant refuses to agree to the new rent, this refusal can be circumvented by assured and assured shorthold landlords by serving a notice of rent increase. Where notice is given in the proper form and this is correctly completed, it will be valid. Where such a procedure is followed, tenants have the right to refer any rent increase to the Rent Assessment Committee/Residential Property Tribunal Service. These bodies have the right to amend the market rent, and will do so if the increase is seen to be unfair, so use the procedure fairly and with caution.
- Ensure That the Increase is Valid
Always be aware that any rent increases implemented without following the proper procedures will be invalid, and the tenant will be entitled to continue paying the existing rent.
- Ensuring a ‘Fair Rent’
Tenants who fall into the category of protected or statutory tenants under the Rent Act 1977 are entitled to a ‘fair rent’. The sum which is deemed as fair is set by the Rent Officer, and in such circumstances you may not charge any more than this amount. This rent is eligible for review every two years, except in circumstances where significant renovations have been made to improve the property or there have been significant changes in the circumstances of the letting. In these cases, an earlier application may be submitted to the Rent Officer.
- Don’t Allow the Tenant to Fall into Arrears
Where the rent is paid late, your first move should be to write a letter informing your tenant of this. If rent continues to go unpaid, consider serving a possession notice and beginning eviction proceedings. Evicting a tenant generally takes between three and five months (you’re unlikely to receive any rent during this period) so you should start the process as early as possible to minimise your losses. To avoid having to deal with these issues, consider employing the services of a company such as Ritehome, which guarantees the payment of rent and deals with administrative actions.
Follow these tips and abide by the rules to ensure that you receive the rent that you’re entitled to without unfairly disadvantaging your tenants.