Four Ways Landlords Increase Rent
Published on Wednesday, 27 June 2012
Recently rents have become a topic of discussion, especially with their sudden raises. It is hard for long-term tenants to adjust to these sudden increases in their rent, especially when they have agreed to a much different one initially. Unfortunately, tenants don't have much say in this matter. However, it has to be defined whether landlords have the legal rights to increase rent. There are four ways landlords can raise the rent and they are the following:
1. There is usually a rent review clause in the lease, which tenants don't pay much attention to, until it is used against them by landlords. These clauses allow the landlord to review and change the rent at certain points during the renting period. These are common with commercial leases and not so common in residential ones.
2. By using a new tenancy agreement which incorporates the higher rent. This new tenancy can only be brought up when the original tenancy agreement expires (unless the tenant has agreed to an earlier alteration - see 4 below).
3. By serving a notice of increasing. This can also be done after the initially fixed term contract ends, but the tenant continues their occupation in the place. In this case, the contract turns into a statutory periodic tenancy which has exactly the same terms as the original one, but is being renewed every time rent is due (either weekly or monthly). One should always use the correct form of the increase notice, which can be purchased from many places.
4. One of the most common ways of increasing rent is actually with the agreement of the tenant and this can happen at any time. The lease represents a contract between the landlord and the tenant and it can be altered at any time the landlord wishes. In case that the tenant agrees to the change, the new amount should be documented too. However, some landlords ask tenants to sign entirely new agreements where the new rent is stated.
A rent increase doesn't sound like a good idea to tenants, but there are many reasons for a landlord to take this step. First of all, a landlord never knows what the tenants might do or act like. If the landlord is having a hard time communicating his ways to the tenants, or if there are many damages or wear and tear to the place, an increased rent is only a slight compensation. Nothing can compensate a landlord's stress, so they could even increase rent as a hint.
In most instances, however, this is not the reason for increasing rent. Most landlords increase rent just because they can, or because they get greedy. It is a risky move though, especially with long-term residents. A good tenant-landlord relationship is hard to build and maintain and the landlord shouldn't ruin it for some extra cash, because they might even lose the tenant. Landlords know how hard it is to find good trustworthy tenants who take good care of the property and pay rent on time. Increasing rent for good tenants causes lots of resentment. An increase can also backfire, because a tenant who is suddenly asked to pay more for the same conditions may easily demand something from the landlord in return. All the small issues they have been putting up with until recently, may turn into big problems. The biggest risk is when the tenant gets disappointed and starts looking for a new place. You can be sure that they may find a place with even a lower rent than their original one.