PDA

View Full Version : s51 Rent Act 1977 increase of rent



Grange
30-10-2005, 13:23 PM
Does anybody have a proforma for increasing a protected tenant's rent using theformulae under s51 of the Rent Act 1977?

Thanks

lucid
30-10-2005, 19:38 PM
Do you mean a to create a new rent agreement with a statutory tenant where there has never been a registered rent whatsoever on the property with any previous tenant? as this is S51 i think.

Remember you have to follow the guidelines for these things and it is totally voluntary on the tenant. Also you are not allowed to make the amount any higher than what the rent officer would set.

Thats why its much better just to apply for a fair rent. If the tenant objects later on down the line and refers it to the rent office and they set it lower you may get into an overpayment situation.

Or do you mean an RR22a notice of increase form??

Grange
30-10-2005, 22:16 PM
Yes, thanks, Lucid I mean to create an agreement with a tenant where there is no registered rent.

It takes 4 months to get a new registered rent in place (where there's never been one beforehand).

We're already in an overpayment situation... we want to stop it asap!

>>Also you are not allowed to make the amount any higher than what the rent officer would set.


Welllllll... ish. You are allowed to set the rent at whatever level you wish. But either party is allowed to go straight to the rent officer afterwards to agree a fair rent... :D

lucid
31-10-2005, 01:45 AM
Why would the tenant voluntarily opt for a rent increase to reduce the time it takes for the overpayment to be cleared? They are under no obligation to sign/agree any new agreement and I’m sure even if you could do this the agreement would have to say so.

Firstly look at Part 3 section 45 subsection (1)

“Except as otherwise provided by this Part of the Act, where the rent payable for any statutory period of a regulated tenancy of a dwelling-house would exceed the rent recoverable for the last contractual period thereof, the amount of the excess shall, notwithstanding anything in the agreement, be irrecoverable from the tenant.”

Key point here are that the tenancy is statutory now.

Also note that Section 51 (1) (a) specifically refers to a protected tenancy which is a regulated tenancy.

In several sections of the act, it distinguishes the contractual period by referring to it as a protected tenancy, referring specifically to the statutory tenancy as to the period after the contractual period has ended. This is mentioned in the notes.

This may mean that you may not be able to have any agreement whatsoever as the tenancy is now obviously a statutory one and not in the contractual stage. Meaning Section 51 refers to increasing the rent by agreement only in the contractual period where there is no previous registration on the property with any existing or previous rent act tenant. The only other option being to opt for a new fair rent, which I’m sure can be done in less than 4 months.

You can apply 3 months before an existing registration runs out. In a similar case I know where the last registration was about 10 years ago, the Rent office completed a new registration from application in less than 4 weeks.

I would get specialist legal advice from a barrister on this one as I’m not sure any agreement is legal or valid and could be construed as coercment, opening up a whole other can of worms so to speak!

Grange
31-10-2005, 15:22 PM
Because there is not, and never has been, a registered rent on the property.

The allegedly protected tenant might consider it in his better interest to agree to the rent being raised to a level lower than the likely fair rent. Not least because it may be that the protected tenant isn't... and any visit by a rent officer will be preceded by an investigation as to whether or not the tenant is protected.

'But that's not in the Landlord's interest,' I hear you say... well, I shall say no more on that point.

The man from the council tenancy relations department suggested that it was a good way of an interim increase in the rent until a rent officer could be brought in (in 4 months' time...). He said that the church commissioners do it all the time.

I do take your point on coercement.

Grange
31-10-2005, 15:23 PM
51 Protection of tenants with security of tenure
(1) In this Part of this Act a “rent agreement with a tenant having security of tenure” means—
(a) an agreement increasing the rent payable under a protected tenancy which is a regulated tenancy, or
(b) the grant to the tenant under a regulated tenancy, or to any person who might succeed him as a statutory tenant, of another regulated tenancy of the dwelling-house at a rent exceeding the rent under the previous tenancy.
(2) Where any rates in respect of the dwelling-house are borne by the landlord or a superior landlord, any increase of rent shall be disregarded for the purposes of the definition in subsection (1) above if the increase is no more than one corresponding to an increase in the rates borne by the landlord or a superior landlord in respect of the dwelling-house.
(3) If—
(a) a rent agreement with a tenant having security of tenure takes effect on or after the commencement of this Act, and was made at a time when no rent was registered for the dwelling-house under Part IV of this Act, . . .
(b) . . .
the requirements of subsection (4) below shall be observed as respects the agreement.
(4) The requirements are that—
(a) the agreement is in writing signed by the landlord and the tenant, and
(b) the document containing the agreement contains a statement, in characters not less conspicuous than those used in any other part of the agreement—
(i) that the tenant’s security of tenure under this Act will not be affected if he refuses to enter into the agreement, and
[(ia) . . . ]
(ii) that entry into the agreement will not deprive the tenant or landlord of the right to apply at any time to the rent officer for the registration of a fair rent under Part IV of this Act,
or words to that effect, and
(c) the statement mentioned in paragraph (b) above is set out at the head of the document containing the agreement.

lucid
31-10-2005, 18:43 PM
Yes I understand what your saying, but the 1st hurdle is to definitively establish whether you can even have a rent agreement when the tenancy is statutory. I would not take the advice of the man from the council as they are generally not well versed in the rent act. Nor would I rely on that of the Rent office either here. I'm referring to the point I made in my last post about section 51 which may only apply in the contractual stage of the tenancy as this is what "protected" normally refers to.

When I get the chance I'll check the notes more thoroughly, but it does mention the distinction between the two and refers to another section with definitions of the exact meaning of what it applies to when the act mentions "protected" and "statutory".

(a) an agreement increasing the rent payable under a protected tenancy which is a regulated tenancy, or
(b) the grant to the tenant under a regulated tenancy, or to any person who might succeed him as a statutory tenant, of another regulated tenancy of the dwelling-house at a rent exceeding the rent under the previous tenancy

Also remember section (b) was written when Regulated tenancies were still in existence and could be created. This refers to succession and also you can no longer create another contractual regulated tenancy to a regulated statutory tenant within the same property, the tenant remains a statutory one.

With regard to your point about the validity of the regulated tenancy you should again consult an expert. Many fully regulated tenancies were created accidentally because landlords didn't follow correct procedure. For example when creating protected shortholds, the rules were strict, the tenancies had to be at least a year and special notices had to be issued before the tenancy began. If that was not done the tenancy created was automatically a fully protected one.

If you go ahead with an agreement without having the proper advice on this from a specialist barrister or solicitor you could be crying later, with another overpayment on your hands. Also who told you the 4 months figure? Have you contacted the Rent office directly? Just fill in the application form straight away.

Grange
01-11-2005, 10:10 AM
Also who told you the 4 months figure? Have you contacted the Rent office directly? Just fill in the application form straight away.

The Rent Office: There is a 2 month lead time for the rent officer to make a visit and determine a fair rent. You then have to serve 4 weeks' notice on your tenant that the rent will increase w/e from the first day of the following month. That probably takes us to 1st March!

lucid
01-11-2005, 20:52 PM
The 2 month lead in time must be specific to the administration and how busy they are in your area as there doesn't appear to be any legislation about this.

Once the tenant receives the RR1 application he/she has 14 days to respond then a consultation/inspection is arranged where necessary. Then the rent officer sets a fair rent, which takes effect on "the effective day" indicated on the certificate of fair rent. (Has to be at least 2 years from the last one if there is a previous registration.) So theoretically the whole process could be done in under 4 weeks.

Then the landlord issues a notice of increase on a special form. Regarding your last post with reference to the notice you must give the tenant, you have it back to front. The dates are 4 weeks but it's back dateable by 4 weeks. If the notice of increase form is correctly filled in and dated right and served within 4 weeks of the effective date of the rent registration, the increases takes effect from the effective date of registration.

So whenever you serve the notice you cannot backdate the increase by more than 4 weeks (not including the day of service). Get it wrong and your notice is invalid. No Increase. If an increase is paid on an invalid notice it can be claimed back by the tenant. You could go to county court at your own expense and a judge may correct an invalid notice, but can only backdate the correction for a period of 6 months from the judgement. On the other hand the judge could say tough you should know your own business or get better advice. Assuming it's not a "slip of the pen" error. :cool:

You still need to address the legality of any Rent Agreement on a statutory tenant. Additionally on application to the rent office they look at the facts surrounding the tenancy, to establish if the tenancy is a regulated one. If there is a dispute here on point of law they take no further part in the proceedings and the matter would be referred to the courts to decide.