News

Rent Increase Warning

Feb 8, 2023

It is usual (and perfectly acceptable) for a landlord to seek to increase the rent for a property. There are different ways to do this, depending on whether the tenancy is within the fixed term or has become periodic and whether the tenancy agreement specifies how rent can be increased.

For periodic tenancies where there is no valid mechanism for a rental increase within the written agreement, a recent case provides a warning to landlords to get it right or suffer the consequences…

On 01/02/2023, in Mooney v Whiteland [2023] EWCA Civ 67, the Court of Appeal made a decision which is binding on all cases in the County Court and High Court.

The Facts

The case concerned the validity of a rent increase notice under section 13 of the Housing Act 1988 (the only way to increase the rent in certain circumstances).

The landlord had served a notice under section 13 raising the rent from £25 per week to £100 per week. The tenant did not accept the validity of the notice but also did not refer it to the Tribunal for a decision. Instead, the tenant simply continued to pay the £25 per week she believed was due.

As a result, the landlord issued a claim for possession in reliance on the arrears which had supposedly accrued because of the tenant’s position. 

The tenant defended the claim on the basis that the section 13 notice was defective. The tenant stated that, because the notice did not specify the new rent to begin from a ‘new period of the tenancy’, it was invalid and so did not apply. Indeed, the notice did propose a rent increase to take effect on a Friday, whilst the periodic date was a Monday.

The landlord accepted that the notice was technically incorrect on the date but contended that a reasonable recipient would have understood that it was meant to refer to a Monday, not a Friday.

The case ended up going through three sets of hearings: the County Court (where the District Judge found in the landlord’s favour); the High Court (where the Circuit Judge allowed an appeal in favour of the tenant); and the Court of Appeal.

The Court of Appeal Decision

The Court of Appeal dismissed the landlord’s appeal.

It held that the error was not one that was so obvious that a reasonable tenant would have realised it was an error and what the correct period of the tenancy should have been. The notice had therefore been invalid, and it followed that the rent had not been increased.

Conclusion

Landlords must be careful to ensure that the starting date of the new rent given in the section 13 notice states the correct date.

For example, if the periodic tenancy starts on 2nd of each month to the 1st of the next, the date on the notice must be the 2nd. Equally, if the period runs from Monday to Sunday, then the date in the notice must be a Monday. Please note that it is the periodic tenancy date which is key – not the date on which rent is usually paid.

If you need support with a proposed rent increase, then get in touch with us for some free and friendly initial advice followed by fixed fee support throughout your case:

01704 790 532

hello@landlord-support.co.uk

www.landlord-support.co.uk

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