What You’ll Learn
- How Section 13 rent increase notices work today
- What the Renters’ Rights Bill will change about how you increase rent
- When and how to issue a notice correctly (a step by step guide)
- How to prepare now so you’re ready when the new rules arrive
If you were not currently aware, the Renter’s Right’s Bill is due to become law imminently and will have multiple consequences for tenants and landlords alike. As part of the bill, the rules around how to raise rent will be changing and landlords should be up to speed on what this means for them going forward.
If you’re asking yourself, what is a Section 13 notice? We’ll explain what that currently means, what it will mean after the introduction of the Renters’ Rights Bill, and how you might use it in your day to day life as a landlord.
What Is a Section 13 Notice?
Under the current law, a Section 13 notice is the legal mechanism a landlord uses to introduce a rent increase during a periodic tenancy (i.e. where the initial fixed term has lapsed and there’s no fixed end date).
Key points under today’s rules (before the introduction of the Renters’ Rights Bill):
- You cannot use Section 13 during a fixed term (unless there is a rent review clause in the agreement).
- You must wait until at least 52 weeks have passed since the tenancy started, or the last increase occurred.
- The minimum notice period depends on how rent is paid: 1 month (for monthly/weekly), 3 months (for quarterly), or 6 months (for annual).
- The notice must be issued using a specific format and correct wording, this is often called “Form 4”– simply because it is form number 4 on the government’s tenancy website.
- If the tenant accepts the increase (or chooses not to respond), the new rent starts on the date given. If they dispute, they can refer it to the First-tier Tribunal, which will determine what is “fair market rent.”
Because of these constraints, many landlords use rent review clauses (if there is one ) or negotiate an increase with tenants directly when renewing a tenancy at the end of a fixed term. But once the Renters’ Rights Bill becomes law, those routes will disappear.
How the Renters’ Rights Bill Will Change Section 13
The Renters’ Rights Bill is intended to revamp the private rental sector’s framework – as per the title of the bill – renters are largely seeing changes which benefit them over landlords, and this is true when it comes to Section 13.
Regarding rent increases specifically, here’s what the Bill proposes and how it affects Section 13:
Section 13 becomes the only legal method
All other mechanisms (rent review clauses, informal mid-term increases) in assured shorthold tenancies will no longer apply. While some landlords will be tempted to ignore the rules and offer a more casual arrangement, this could cause legal issues further down the line – our advice is to always follow the rulebook.
Mandatory periodic tenancies
The Bill abolishes fixed-term assured tenancies. All tenancies become periodic from the moment the law takes effect, meaning the Section 13 regime always applies.
Only one rent increase per year
Landlords can only issue a Section 13 notice once in any 12-month period, this is the same as the current setup, but different if you were previously working with fixed term agreements. Should you wish to review rent each year, it would be wise to issue a Section 13 annually.
Longer minimum notice period (2 months)
The Bill proposes that landlords must provide at least two months’ notice of a rent increase.
Tribunal power and constraints
Tenants will retain the right to challenge increases. The Tribunal can set a lower rent if it finds the landlord’s proposal excessive relative to market comparables, but unlike the current tribunal system the rent cannot be raised above the landlord’s Section 13 figure.
Alignment with market rents
Any proposed increase must be justified by comparables in the local area and reflect what the property could command in the open market. Evidence to support the new rental figure must be researched and made available to the tenant if required.
Implementation to existing tenancies
When the Bill commences, existing tenancies will convert to the new framework – meaning even your current leases will fall under the new rules.
Because of these changes, Section 13 will go from being one tool among several, to being the only tool for rent rises – and with stricter procedural and evidential demands.
How to Issue a Valid Section 13 Notice (to be compliant with the new law)
Once the Renters’ Rights Bill is in force, this is a compliant manner in which to apply a Section 13 Notice to increase the rent on your tenanted property:
- Check the tenancy status
All tenancies will become periodic. Should your tenancy agreement state otherwise, it would be good practice to issue a new tenancy document and inform your tenants of the legal changes. Check the last time a rent increase was applied, as the new rules require at least 52 weeks to have passed – no matter what the old agreement stated. - Download the latest Form 4
Always use the current version from the government website; wording changes over time, and the accuracy is critical if challenged. - Complete all required fields
Include the tenant’s legal name, property address, current and proposed rent, proposed start date (must align with a rent period), and the date of your last Section 13 increase (or indicate you’ve never used one). - Choose the correct notice period
A 2-month notice period will be required under the new rules, once the bill has passed. - Serve the notice to the tenant
This can be via post, in person, or email (if your tenancy agreement allows it). Keep proof of service (signed receipt, tracked mail, timestamped email) and ask your tenants to confirm receipt – this allows far less ambiguity should they wish to challenge the increase. - Allow for tenant response or challenge
Happy tenants are good tenants to have, so always try to be understanding should they wish to negotiate on the rental increase. If the tenant objects and applies to the Tribunal before the increase takes effect, this is a far more complex path to travel down. - Implement or adjust
If your tenants are happy to proceed, the new rent takes effect. If they ask the Tribunal to intervene, any amount they set is legally binding
Ensure that you double check you’ve followed the correct process and your paperwork is delivered correctly with no errors. The responsibility is on you as the landlord to abide by the rules and any mistakes could invalidate your notice – forcing you to start over again.
What Landlords Should Do Now (Before the Bill Takes Effect)
If you are an active landlord who wishes to remain professional and increase your rent regularly, then don’t wait until the law changes to begin preparing. Here are practical steps to take now so you’re ready to hit the ground running.
Audit your tenancy agreements
Identify clauses related to rent increases or reviews. Prepare to phase out or remove those clauses (where that’s legal) since they will be invalid under the new regime. Issue tenants with a new agreement and highlight why the changes are required by law.
Track your past increases
Know when your last Section 13 notice was served (if ever). That tells you when you’ll next be able to issue one, and helps avoid mis-dating in future.
Check local market rents
Begin collecting local market data: recent lets of similar properties, rents in your area, condition, amenities, etc. You should only increase rent in line with the market or you could face challenges from tenants.
Plan your timing carefully
Don’t leave rent reviews to the “last minute.” Set reminders and mark proposed rental increase dates in your calendar. Calculate an estimated increase and check against the market when the time comes.
Communicate with tenants
Let tenants know about your intention to review rent (informally) ahead of formal notice. Transparent communication can reduce objections and renters need to plan their future finances. When the Bill takes effect, consider including a short explanation in your first Section 13 notice under the new regime, so tenants understand why they are getting a new, potentially more formal notice.
If in doubt, speak to the experts.
If you’d like help reviewing your tenancy agreements, checking your processes, or preparing for the upcoming changes, speak to Grace Miller today. We can help make sure you stay compliant every step of the way.
