Latest Legal News - Landlords can increase assured tenancy rents (July 2009)

The High Court has confirmed that the provisions of the Housing Act 1988 permit a landlord to increase the rent payable under a statutory periodic tenancy to an amount above that which was stipulated in the rent review clause in the contractual assured tenancy which preceded it. Whilst the decision does not make any new law, it provides some good news for landlords who want to achieve a higher rent review than that provided for on the face of the tenancy documentation. For tenants, the case emphasises the importance of being aware of how the statutory rent review machinery may automatically have a bearing on the operation of the rent review despite what is apparently provided for in the contractual tenancy.  It may also provide a practical means of being able to increase the rent without the time and costs involved in a renewal tenancy agreement having to be drawn up and entered into.

In the case of London District Properties Management Ltd & others v Goolamy & another decided on 16^th June 2009, the three year tenancy provided that the rent would increase by 5% per annum. Following the expiry of the contractual assured tenancy, the tenants continued to occupy the property under a statutory periodic tenancy. The landlord sought to increase the rent to a figure in excess of a 5% per annum increase. The London Rent Assessment Panel decided that the rent increase should be limited to a 5% increase and the landlord appealed. 

The court upheld the landlord's argument that section 13(1)(a) of the Housing Act 1988 applied to import the statutory rent review machinery into the case so as to override the rent review provisions contained in the contractual assured tenancy.

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