No contract, no rights?
Question
I currently rent a flat from a friend of a friend. I've been here for more than a year but we don't have a written agreement, rent book or contract. He now wants to increase the rent by more than £20 a month. Is he allowed to do this without a suitable notice period? He says that the market rate is now more than I pay and someone else is interested in the flat so I don't really have a choice. As there's no contract, do I have any rights?
Answer
Your rights will depend on the type of tenancy you have. If you rent privately and your landlord doesn't live with you it's likely you have an assured shorthold tenancy. The following information is based on this assumption so if you think you have a different type of tenancy, it's important to seek further advice.
Verbal tenancy agreements are as legally binding as those in writing. However, if there are any disputes, it can be more difficult to prove what has been agreed.
If your landlord wants to put the rent up, he has to follow a set procedure. If you have a fixed term tenancy, your landlord can't increase the rent during the first fixed term. Fixed term tenancies are ones that are for a set length of time, usually for six or twelve months. Once the first fixed term ends, your landlord may grant you a new fixed term agreement and you and your landlord should agree the rent. If you don't make a new agreement but your landlord allows you to stay, you'll become a 'statutory periodic tenant'.
Periodic tenancies are tenancies that are not fixed term and usually run from month to month. Statutory periodic tenancies are tenancies that continue after a fixed term has ended. For both types of tenancy, the rent can only be increased by using the rent review clause in a written agreement or by issuing a formal 'notice of increase'.
The 'notice of increase' must be in a certain form and say how much the new rent is and when it comes into effect. If the landlord doesn't follow the correct procedure for the notice and you have not agreed to any increases, you are entitled to continue paying rent at your existing level. Because of this, it would be helpful to get further advice if you do receive a notice from your landlord.
If you don't accept the proposed rent then - before the notice expires - you may be able to refer it to a Rent Assessment Committee (RAC), which will set the rent.
It's worth thinking carefully before applying to the RAC because rent assessments can increase, as well as decrease, the rent. One thing you might like to do is compare rents in your area so you can assess yourself whether the rent you're paying is around the market rate or not. Once a rent assessment committee has set a rent, your landlord can't increase the rent for 12 months, unless you agree to a further increase. For further information, and to find out if you can refer your rent to the RAC, you can call the Residential Property Tribunal Service (RPTS) on 0845 600 3178.
It's important you know that some landlords choose to evict tenants who won't agree to a rent increase. So it's worth thinking through your options before negotiating with your landlord or taking action.
If your rent does increase and you receive housing benefit, you should immediately inform the housing benefit department. They may not be able to meet the increase if the rent is too high.
For further information and advice about any of the options or issues outlined here visit your local Housing Advice Centre or Citizens Advice Bureau (CAB). Or you can call Shelter on 0808 800 4444.
Question answered by Shelter
