Landlord and Tenant

Rent control

In some circumstances it is possible for either the tenant or the landlord to apply to have a fair or market rent assessed in relation to a property and this assessed rent may take effect in place of the contractually agreed rent.  Our team of expert landlord and tenant lawyers are on hand to deal with any queries relating to rent control.

Rent control and protected tenancies

Rent control is mostly of interest to landlord and tenants of protected tenancies (i.e. to most properties let before 15th January 1989).  These properties are subject to the Rent Act 1977, and either landlord or tenant has the right to apply to the Rent Service for the assessment of a ‘fair’ rent.  In many cases this fair rent will be at a level significantly below the market rate.  The assessed rent is then the maximum that may be charged, even if the landlord and tenant had previously agreed a higher amount.  However, if the assessed rent is greater than the contractual rent, the rent cannot be increased.  The landlord can increase the rent to the assessed level at the renewal of the tenancy by serving a notice of increase in the prescribed form.  Either the landlord or the tenant can apply for reassessment every two years.  It is possible to appeal the assessment to the Rent Assessment Committee.

It should be noted that the Rent Service’s jurisdiction applies only where the tenancy is protected, and in particular the tenancy will cease to be protected if the tenant ceases to be resident in the property.

Rent control and assured tenancies

Only very limited rent control applies in relation to assured tenancies.  The initial rent will be whatever is agreed between the parties.  However, once the fixed period has expired, and at least 12 months has passed since the start of the tenancy, the landlord may wish to increase the rent.  The parties can simply agree an increase between themselves, or the tenancy may contain a clause providing a mechanism for rent review.  If neither of these applies, the landlord should serve a notice of increase in the prescribed form, proposing a new rent.  This will then take effect automatically after the notice period has expired, unless the tenant refers the matter to the Rent Assessment Committee.  If the matter is referred, the committee will assess the rent on the basis of the prevailing market rate.

Rent control and assured shorthold tenancies

The great majority of modern tenancies are assured shortholds.  Again only very limited rent controls apply.  Within the first six months of the tenancy, the tenant may apply to the rent assessment committee for a determination of the rent, on the market basis.  If the committee’s determination is lower than the contractual rent, the rent will have to be adjusted accordingly.  The landlord may not then serve a notice of increase until at least 12 months after the determination.  This provision is rarely used both because it would be unusual for a rent in excess of the market rent to be agreed in the first place and because the lack of security of tenure in these sorts of tenancy means that the either the tenant or the landlord will usually end the tenancy if they are unhappy with the level of the rent.

Disclaimer

This article is for general information only and shall not be deemed to be or constitute legal advice.  We cannot accept responsibility for any loss or damage suffered as a result of acts or omissions based on this article.

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