The following is an explanation of a residential tenant's legal rights in respect of challenging a rent increase under an Assured Tenancy or an Assured Shorthold Tenancy (commonly called a "Shorthold").

However, it should be borne in mind that a Shorthold tenant can be evicted very easily, so these rights are illusory, because most tenancies are Shorthold, where if the tenant opposes the rent increase the landlord can evict.

Fixed Term Tenancy -v- Periodic Tenancy

Whether the landlord has a right to increase the rent depends on whether the tenancy is a fixed term tenancy or a periodic tenancy.

A fixed term tenancy is one where the tenancy has a specific length, such as six months or one year.

A periodic tenancy is one in which no fixed length is agreed, so it just runs indefinitely. The period of the tenancy is set by the frequency at which the tenant pays rent, e.g. monthly.

When a fixed term tenancy ends, if the tenant remains in occupation after the last day then a periodic tenancy arises automatically.

Rent increase for a Fixed Term tenancy

The rent cannot be increased during the fixed term, unless:-

• the tenancy agreement allows for rent increases; or

• the tenant agrees to a rent increase.

When the fixed term ends, a landlord will often ask an existing tenant to sign a new tenancy agreement, at a higher rent, as this is a common way for the landlord to increase the rent.

That does NOT violate the rule that the rent under a fixed term tenancy can't be increased, because: (a) the increase is taking effect only after the end of the fixed term, not during the fixed term; and (b) the tenant is agreeing to the increase.

Tenancy Agreement allows for rent increases

You must check the tenancy agreement to see what it says, if anything, about rent increases. This might be referred to as the landlord's right to vary the rent.

If the tenancy agreement allows rent increases, the tenant has to pay the increase, as often as the tenancy agreement says the rent can be increased, provided that:

• the clause in question is contractually enforceable, and

• the landlord complies with all the provisions of the clause.

A clause in a contract is not enforceable in court if:

(a) The clause is unfair or unreasonable. For example, a term stating that the landlord has the right to increase the rent "from time to time", without specifying what that means, is not enforceable; or

(b) The wording of the clause is not clear enough for the tenant to be able to tell what the increase will be. It should state the amount of the increase, or give a formula for how the increase will be calculated (e.g. by applying the Retail Prices Index). And it should say how much prior notice of the increase the landlord must give the tenant.

In one case, a clause allowed the rent to be increased to a level which the tenant could not possibly pay. The Court decided that the clause was really a device to force the tenant to run up arrears, so that the landlord could evict him for non-payment of rent. The Court of Appeal decided the clause was unenforceable (Bankway Properties Ltd v Penfold-Dunsford, April 2001).

The tenant can also challenge the rent increase on the basis that the landlord has not complied with the provisions of the clause in question (e.g. has not given the correct period of prior notice).

This is because if the landlord has not complied with the terms of the agreement, then the tenant is not contractually bound to pay the rent increase.

Some examples:

The landlord can increase the rent by:-

• Specifying in the tenancy agreement the intervals at which the rent is to be increased, e.g. every twelve months after the beginning of the tenancy. If this is the case, no further notice is necessary; or

• Specifying in the tenancy agreement that the tenant will be given notice of a rent increase, to take effect after a specified period of time (e.g. one month's notice); or

• A combination of these. For example, the tenancy agreement might say that the landlord can increase the rent annually but must give the tenant one month's notice of the increase.

If the tenant doesn't pay the rent increase, the landlord can start court proceedings for rent arrears. The tenant can challenge the validity of the increase in that court case.

However, where it is the tenancy agreement that allows the landlord to increase the rent there is no right to apply to a Rent Assessment Committee to challenge the increase.

Statutory procedure for increasing the rent

There are two statutory procedures for increasing the rent, in respect of a residential tenancy.

The landlord can use:-

• section 13 of the Housing Act 1988; and/or

• section 6 of the Housing Act 1988.

When to use section 13 of the Housing Act 1988

The landlord can use the procedure under section 13 of the Housing Act 1988 to increase the rent if:

(a) the tenancy is a periodic tenancy, and

(b) there is no clause in the tenancy agreement providing for increase in the rent.

How to use section 13 of the Housing Act 1988

The landlord must give the tenant a notice in writing, entitled "Landlord's Notice Proposing a New Rent Under an Assured Periodic Tenancy or Agricultural Occupancy" (known as a section 13 notice).

The notice must specify the new rent. The notice must also state the date from which the increase is payable. That date must be:

• if the tenant pays rent monthly or more often (e.g. weekly, monthly, or fortnightly), at least one month later;

• if the tenant pays rent less often than monthly, at least one rental period later (e.g. if the tenant pays rent quarterly, he must be given at least one quarter's notice of the increase);

• if the tenant pays rent yearly, at least six months later.

Thus in 99% of cases the tenant will be notified of the increase one month before it takes effect.

The notice must be expressed to end on the day on which the new rent is due; so the notice period is worked out by counting backwards from that date. The tenant should carefully check whether he received the notice at least one clear calendar month before that date.

If the rent is payable less often than monthly, the tenant must check whether he received notice of the increase at least one clear rent period (or six months, where applicable) before that date.

Date of increase

The earliest date on which the rent can be increased under section 13 is 52 weeks (i.e. one year) after the date on which the tenancy began.

Subsequent increases can take place at intervals of not less than one year; but the landlord must properly serve a section 13 notice each time.

To take account of these rules, a landlord might lawfully choose to increase the rent on the same date each year.

Appealing against a Section 13 increase

A dispute about the validity of a section 13 notice will be heard by a Rent Assessment Committee (known as an "RAC"), not by the Court.

If the tenant does not want to pay the increase, he must apply to the Rent Assessment Committee. The application is only valid if it is received by the Committee before the date on which the new rent is payable under the section 13 rules.

The application MUST be made on the statutory form called "Application Referring a Notice Proposing a New Rent Under an Assured Periodic Tenancy or Agricultural Occupancy to a Rent Assessment Committee". This form is available from any Rent Assessment Committee (consult the Telephone Directory for the address of your local one).

The tenant cannot apply to a Rent Assessment Committee if he has already agreed to pay the increased rent.

The tenant can only challenge a rent increase, not a service charge increase, unless the service charge is included in the rent.

Landlord does not follow the correct procedure

If the landlord does not follow the correct procedure, the rent increase is invalid. The tenant is entitled to continue to pay the old rent. Rent arrears will only count as a ground for possession if the rent increase is lawful.

It is important to bear in mind, however, that shorthold tenants have no real security of occupation; so antagonising the landlord may lead him to start eviction proceedings.

If the tenant starts to pay the increased rent, he is deemed to have agreed the increase. The increased rent is then lawful, regardless of any procedural errors the landlord may have made.

A dispute about whether a rent increase is valid can be heard by the County Court.

A dispute about the validity of a notice under section 13 or section 6 of the Housing Act 1988 will normally be heard by a Rent Assessment Committee.

Warning: The rules about rent increases under section 13 are more complicated than can be dealt with in this brief outline, which deals only with the situations most commonly encountered. A tenant who receives a rent increase notice MUST consult a specialist adviser.

It should also be borne in mind that a Shorthold tenant occupying premises under a periodic tenancy can be evicted very easily, so these rights are illusory, because if the tenant opposes the rent increase the landlord can evict.

Advice & opinions on this forum are offered informally, without any assumption of liability. Use your own judgment. Seek advice of a qualified and insured professional if you have any doubts.