Increasing rent on a House in Multiple Occupation (HMO)

Increasing rent on a House in Multiple Occupation (HMO) involves several steps to ensure compliance with legal requirements and maintaining good tenant relationships. Here’s a comprehensive guide:

1. Review the Tenancy Agreement

Check the terms and conditions specified in the tenancy agreement regarding rent increases. This document will often outline the procedure and frequency for increasing rent.

2. Know the Legal Requirements

Familiarize yourself with local and national laws regarding rent increases. This includes:

Notice Period: Legally, landlords must provide tenants with sufficient notice before increasing rent. In the UK, this is typically one month for monthly tenancies and six months for yearly tenancies.
Rent Review Clauses: If there’s a rent review clause in the tenancy agreement, follow the procedure outlined.
Fair Market Rate: Ensure the proposed rent increase is in line with local market rates.

3. Provide Proper Notice

Depending on the type of tenancy, different forms of notice may be required:

Assured Shorthold Tenancies (ASTs): Use a Section 13 notice if you do not have a rent review clause. This form must be completed and served to the tenant to formally propose the new rent.
Fixed-Term Tenancies: You can only increase the rent if the tenancy agreement allows it or if the tenant agrees to the increase. If not, wait until the end of the fixed term.

4. Communicate with Tenants

Clear communication is crucial. Write a formal letter or email informing the tenants about the rent increase, including:

• The current rent amount
• The proposed new rent amount
• The effective date of the increase
• The reason for the increase (e.g., increased maintenance costs, inflation, property improvements)
• Information on how to dispute the increase, if applicable

5. Follow Up and Address Concerns

Be prepared to discuss the increase with tenants and address any concerns or objections they may have. Consider negotiating a smaller increase if necessary to maintain a good relationship.

6. Document Everything

Keep detailed records of all communications and notices related to the rent increase. This can help in case of disputes or legal issues later on.

Example Letter to Tenants

[Your Name]
[Your Address]

[Email Address]
[Phone Number]
[Date]

[Tenant’s Name]
[Tenant’s Address]

Dear [Tenant’s Name],

RE: Notice of Rent Increase for [Property Address]

I hope this letter finds you well. I am writing to inform you of a forthcoming rent increase for the property you are currently renting at [Property Address]. As of [Effective Date], the monthly rent for your accommodation will increase from [Current Rent Amount] to [New Rent Amount].

This adjustment reflects current market rates and the increased costs associated with maintaining the property to a high standard. We are committed to ensuring that your living environment remains safe, comfortable, and well-maintained.

Please note that this change will take effect on [Effective Date], providing a notice period of [Number of Days/Months]. If you have any questions or would like to discuss this matter further, please do not hesitate to contact me at [Phone Number] or [Email Address].

Thank you for your understanding and cooperation.

Sincerely,

[Your Name]

By following these steps and maintaining clear communication, you can increase rent in an HMO in a fair and legally compliant manner. If you would like further information complete the form below and one of our advisors will get back to you.