Can a landlord vary the rent?
Landlords can vary the rent under an occupation contract. The process for doing so differs depending on the type of occupation contract.
Fixed-term standard contracts
Under a fixed-term standard contract, the rent can be varied at any time by an agreement between the landlord and the contract holder. This means that the amount of rent payable under a fixed-term standard contract can be varied if the landlord and contract holder agree to the variation.
If a fixed-term standard contract is varied, the landlord must provide the contract holder with either:
a written statement of the term(s) varied, or
a written statement of the contract as varied
This must be provided to the contract holder within 14 days of the date on which the contract is varied.
A fixed-term standard contract may also include a provision outlining how the landlord may vary the rent during the fixed term. Landlords should follow the terms of any such rent review clause and give the contract holder written notice of the new rent amount. It is recommended that rent review clauses ensure landlords give contract holders at least 2 months’ notice of a rent increase.
Secure contracts and periodic standard contracts
A landlord can vary the rent paid under a secure contract or periodic standard contract once every 12 months. They can do this by giving the contract holder notice of the rent variation using Form RHW12. This form should specify the new rent and the date on which the rent is to become payable.
Landlords must give contract holders at least 2 months’ notice of the rent increase.
Note that contract holders renting under a secure contract will only have their rent increased in line with the Welsh Government’s Social Rent Policy.
Ask a lawyer if you have any questions about variations of rent.
What should contract holders do?
If a contract holder receives notice of a rent variation, they should consider whether they can afford the new rent.
Contract holders that are worried that they may not be able to pay the new rent should speak to their landlord as soon as possible and try to come to an agreement. If no agreement can be reached, they should seek further advice (eg from Citizens Advice, Shelter or a lawyer).
If contract holders can afford the varied rent, they should make arrangements to start paying new rent from the date specified in the notice (eg by updating any standing orders).
Negotiating a rent variation
Landlords should always consider whether imposing a rent increase is beneficial to them. With an increased rent, contract holders may no longer wish to rent the dwelling and the landlord will have to invest time and money into finding replacement contract holders. This may be especially inconvenient if the landlord had a good relationship with the previous contract holders.
Generally, contract holders will want their rent to remain the same or have a small increase only. As a result, it may be beneficial to both parties to negotiate the rent increase. For example, by finding an increased level of rent both parties are happy with.