What is Section 13?
If a landlord wants to issue a rent increase after a fixed term tenancy agreement comes to an end or there is a break clause where rent can be open to negotiation in a contract, then a landlord needs to issue a section 13 notice.
When understanding section 13 rent increases, it is first important you understand that section 13 only applies to assured shorthold tenancies and assured tenancies. Specifically, regulated tenancies are excluded from section 13.
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As a landlord, you have to give at least a month’s notice in your section 13 before you can actually increase the rent but it is best practice to give more than a month.
There are regulations around this such as the landlord only having the right to increase rent once per year and it has to be within reason. Typically, landlords take the average of similar properties in the area to find this reasonable amount.
It is important these regulations are followed by landlords because a tenant has the right to challenge a rent increase with a tribunal if they feel it’s out of line with market value or the landlord hasn’t given them enough notice.
How is section 13 for rent increase served?
In order for a landlord to serve a section 13, the landlord must first ensure they are issuing it under the right grounds before they provide a notice.
To issue a section 13 under the right grounds:
- A tenant must be signed with an assured tenancy
- Section 13 must be served only once per year
- The proposed rent change must be in line with market prices
- There must be at least one month before the new proposed rent increase takes place
When the notice is served, a tenant can challenge the notice or alternatively move out of the property altogether if tenant and landlord cannot come to an agreement.
Download your section 13 rent increase
You can download your section 13 rent increase by clicking below
How long does a landlord need to give for a section 13?
The notice for section 13 must be issued at the address of the tenant and be at least one month in advance of when the rent is set to change. Some landlords choose to issue a lot longer time in advance to give tenants more time.
It is also worth noting that a tenant in an assured tenancy who hasn’t come to the end of their tenancy or hasn’t entered a break clause here rent prices are open to negotiation doesn’t have to agree to a section 13.
Is it mandatory to notify the tenant with a rent increase notice?
Yes, it is mandatory to provide a rent increase notice with a section 13 although a lot of tenants will not know the technical name for it. They may just know the notice as a ‘rent increase notice’.
So, if the agreement isn’t clearly labelled as a section 13, this shouldn’t be an issue as it is implied that all rent increases are section 13 notices.
How to Fill in Form 4 to Use Section 13 to Increase the Rent
A form 4 is a rent increase section 13 notice.
Click here to download form 4. The form includes:
- Details about the names and addresses of both landlord and tenant
- The proposed rent increase and the amount already agreed to
- The starting date for the new amount of rent
- Additional charges that are included as part of a tenancy agreement so there is no confusion
Once this form has been signed a tenant must pay the new rent from the date signed and inform their bank of the changes too if they are paying through a standing order.
In addition, if the tenant disagrees with the section 13 notice and thinks it may be invalid or unjust they can bring it to a tribunal and the form contains details of how to do so. It tells tenants to inform their landlords that they plan to take legal action and the correct steps to move forward.
How can a tenant challenge section 13?
If a tenant wants to challenge section 13 in any way, he/she must fill out another form called form 6 which can be found on a download here. A tenant may send it by email or post it to the address on the form to take legal action.
Does issuing a section 13 make a new tenancy agreement?
If a section 13 is issued successfully, rent increases do not create new tenancies, the current agreement can be given an addendum. However, a landlord can insist a tenant sign a new contract, this is a personal choice.
People may get confused because, in the rent act of 1977, concerning regulated tenancies it is true that a rent increase has the effect of terminating a tenancy and moving it into a statutorily regulated tenancy.
These tenancies were signed before 1989 so unless a tenant has been renting under the same agreement for 30+ years to a private landlord, chances are this rule doesn’t apply and for more modern tenancies regulated under the housing act of 1988, no new tenancies are created.
So, in an assured tenancy, if a section 13 is issued successfully, rent increases do not create new tenancies and the current agreement can be given an addendum. However, a landlord can insist a tenant sign a new contract, this is a personal choice.
What should you know about section 13 if you are a landlord?
Section 13 is used as a means for landlords to have some rights to increase their rent under the law. It means if a tenant believes they shouldn’t have a rent increase, even if there are terms in their tenancy agreement that state the tenancy is open for renegotiation.
A landlord can override this decision and have the legal power to set fair prices under market conditions. However, there are other ways to increase rent.
The other ways to increase rent
You don’t have to increase rent strictly with a section 13. Having said this, you have to be careful when operating on this side of the law.
Increasing the Rent by Mutual Agreement or with a rent review clause
Rent review clauses make rent increases more straightforward without having to involve section 13 legislation and with the understanding that any rent increase is within reason. This is the best way for landlords to stay on good terms with their tenants as often, issuing a section 13 can be a long legal process if there are disputes.
Landlords should also understand that tenants may want to have their needs met at the same time if the rent is to be increased so they should stay on top of maintenance and make sure it is done smoothly.
Ensuring cp12 checks are done and the property complies with the building safety fund is the best way to get a good relationship with a lessor and negotiate rent increases as this is a good basis for maintaining a healthy property.
A landlord trying to increase rent by getting a tenant to agree through coercion is entirely legal. At the same time, a landlord should know that if they intend to have any legal backing in the eyes of the law, they must use section 13.
If a tenant disagrees to an informal rent increase where they perhaps offer new features in a property in exchange for additional rent, there is nothing a landlord can do about it unless the went through the formal route of offering a section 13.
When can landlords serve section 13?
A landlord can only serve a section 13 annually. Unlike other sections like section 8 or section 21 which are dependent on the terms of the tenancy agreement or the behaviour of tenants. In this way, landlords use section 13 carefully and only when absolutely needed.
How can you calculate the right rent increase for section 13?
It is important a landlord includes how much rent is going to increase in a section 13 and this must reflect the market value of the area.
A landlord can calculate an average for the area by taking ten houses of a similar size and in the same area and calculating an average of what they rent for.
This average must be within 5% or 10% of the proposed rent increase or the tenant is able to argue that it is too high.
Using legitimate website sources in your research is the best way to get tenants to comply and help them understand.
Are there any restrictions when serving section 13?
Section 13 only holds weight in court if it is issued in a periodic tenancy or a break in a fixed-term tenancy. As well as this, regulated tenancies are exempt from section 13. As a result, a tenant would be well within their right to issue a landlord with an N215 to take them to court if a section 13 was issued within a fixed-term tenancy.
Section 13 for Tenants
If you receive a section 13 as a tenant, it can be the last thing you expect and dealing with a rent increase could cause you a lot of stress. Here’s what you should be aware of.
Check your section 13 notice is valid
First, check your landlord has issued a section 13 in the correct manner. If your landlord has:
- Issued a section 13 more than once this year
- Not given you one month’s notice for the change
- Issued it within a fixed-term of your tenancy
- Priced rents out of market value
If any of those are true, there is a strong chance that section 13 isn’t valid. If you have been issued a section 13 within a fixed term of your tenancy agreement (dependent on your own agreement) then you will not even need to respond to that section 13 notice.
For any other issue, you will need to fill out form 6 here to take section 13 to the tribunal and challenge your rent increase.
How to refer to the Rent Assessment Committee
If a tenant has applied for form 6 and has sent it off. The form will be sent to the rent assessment committee which will decide whether the claim of unfair rent is legitimate. For details on how this works click here.
It is worth noting that the committee will come up with a new rent to be issued under section 13 they deem fair but this doesn’t mean the rent will necessarily decrease. It could go up.
What if you have problems paying your increased rent?
If section 13 gets approved and you cannot afford it, as a tenant you may start to default on your rental payments. As a result, the property may then become repossessed by the landlord under section 8 of the housing act 1988.
Alternatively, before things get this serious, you could inform the council or local authority of your situation who may grant you social housing.
What kind of tenancies are able to be issued with a section 13 rent increase?
A tenancy agreement can either be fixed term or periodic. However, a section 13 can only be issued once the agreement turns into a periodic tenancy and is out of this fexed period.
Other than this, the tenancy must be an assured tenancy rather than a regulated tenancy (tenancies that are over 30 years old) or an excluded tenancy (tenancy agreements for lodgers).
What are fixed-term tenancies?
Fixed tenancies are rental agreements between landlords and tenants for a set period of time in which the contract has protection from being renegotiated legally. This can be an assured tenancy or an assured shorthold tenancy. Typically, both of those agreements start with some form of a fixed term.
What are periodic tenancies?
Periodic tenancies are where tenants pay rent for an indefinite amount of time every week, month or perhaps quarter. These types of tenancies are usually assured shorthold tenancies and have less protection under the law from both section 13 and section 21.
A brief history of section 13
Section 13 was introduced with the housing act of 1988. It gets confused with being classed under the landlord and tenant act 1954 which relates to things like property repairs (section 11) and the notice of a change of landlord (section 3). This is the same act that other regulations like section 21 and section 8 are under in relation to the eviction of tenants. These rights all help protect tenants in their homes.
The housing act of 1988 was introduced after World War One and which created a housing crisis. There simply wasn’t enough property to go around after the UK experienced large-scale infrastructure damage after the blitz.
As a result, tenants were quick to be evicted from their homes with no eviction court costs needing to be paid and lenders also went with whoever was willing to pay the most interest for mortgages.
This made it hard for tenants to have any form of security in their homes and hence the introduction of security tenure was introduced. Many sections were passed under the law with section 13, in particular, minimising how easy it is for landlords to raise rents in a property.
When was section 13 introduced?
In October 1985 the landlord and tenant act and section 13 was issued. It stopped tenants from being kicked out of their homes very effectively, forcing landlords to be more professional in how they raised the price of rent.
To this day there is still debate about whether it is okay or not because landlords will believe they should have the right to rise rents as and when they want as the cost of living increases and inflation goes up. However, at the same time, tenants may struggle with rent increases.
It is therefore important tenants know the laws and that landlords help work with their tenants in order to get a good deal for both parties. Some landlords choose to do rent reviews every year where they send notices to tenants on whether they will use section 13 to increase rents or not, regardless of if there is any change.
Section 13 and Housing Act (1988)
The housing act of 1988 refers to rented accommodation and is one of the leading pieces of legislation regarding property in the UK. Because of the large number of sections of the agreement at 140, there are multiple exceptions to the rule and scenarios where rules don’t apply to all scenarios.
Section 13 is just like this because there are scenarios where a landlord isn’t permitted to raise rents if they are in violation of another section of the law. For example, a landlord has the right to issue a section 13 but not if the tenant is eligible for fair rent in a regulated tenancy. Fair rents are rents started on or before January 1989. There are a few examples like this throughout the housing act of 1988.
Section 13 is the area of the law relating to rent increases and now you know how it works. So, double-check if you’re serving a section 13 notice in the right way as a landlord as well as understand the law surrounding the rights of your tenants before issuing the notice.
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