Failure to Increase Rent Correctly

When is a rent increase invalid?

If a landlord fails to:

  • give the correct notice of increase, or
  • operate a rent review clause strictly in accordance with the agreement,

then the rent being demanded will not be payable. The tenant will be entitled to continue paying rent at the existing levels.

However, if the tenant starts to pay the increased rent, the landlord may be able to argue that the tenant has actually agreed to the increase in which case it will be binding. This would not apply where an assured shorthold rent had previously been set by the Fist-tier Tribunal (Property Chamber) under section 22, in which case it may be necessary to use the section 13 procedure.

An agreement to increase the rent is likely to be implied (even if nothing has been actually said) if the tenant responds to a request for an increased rent by paying the amount requested. In the event of a dispute the tenant could prevent this by making it clear that the payments are being made ‘without prejudice’ while the position is clarified.

Disputes about increases

Disputes about the validity of notices of increase and variation will normally be determined by the First-tier Tribunal (Property Chamber) who can only hear applications where the correct notice has been served.[1] In addition any dispute about an whether an increase is valid could be dealt with by applying to the county court for a declaration.[2]

[1] s.14(1) Housing Act 1988.

[2] s.40 Housing Act 1988.

 

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