With fixed-term tenancies on the way out, landlords in England will soon need to rely on a Section 13 notice as the only lawful way to raise the rent. This guide explains how and when to use one - and why getting it wrong could cost you time, money, and legal headaches.
Note: These rules will apply when the Renters’ Rights Bill becomes law in England. Until then the current Section 13 of the Housing Act 1988 rules still apply – see our article on how to legally increase the rent for more information.
This guide to Section 13 rent increases applies to landlords proposing a new rent under an assured tenancy (AT) periodic for residential lets in England. This will be the default tenancy under the Renters’ Rights Act when assured shorthold tenancies will disappear, and every tenancy will become periodic. Find out more about this in our article on how rental tenancies are changing.
A Section 13 notice is a formal document used to inform tenants of a proposed rent increase under a periodic assured tenancy in England. It forms part of the Housing Act 1988 and will continue to apply under the Renters’ Rights Act when all tenancies will be periodic.
Landlords can increase rent once per year to a fair market rate - that’s the rent amount that would be achieved if the property was newly advertised to let at a fair market price compared to similar properties in the area - using a Section 13 notice (FORM 4 - Landlord’s Notice proposing a new rent under an Assured Periodic Tenancy of premises situated in England). This must include the proposed rent and provide tenants with at least two months’ notice before it takes effect.
No. Once the new legislation is in force, all rent increases must go through the Section 13 process. Rent review clauses and other contractual mechanisms will no longer be valid.
As set out in its Guide to the Renters Rights Bill, the Government has said it is introducing these changes to “prevent unscrupulous landlords [from] using rent increases as a backdoor means of eviction, while ensuring that landlords can increase rents to reflect market rates.”
Currently, most tenancies are granted for a fixed term – typically 12 months – often with a six-month break clause. Under this type of tenancy, tenants are liable for the full rent during the term, even if they choose to leave early.
Many landlords using the standard assured shorthold tenancy (AST) have historically avoided raising rents regularly. Although Section 13 of the Housing Act 1988 has always provided a mechanism to do so once a tenancy becomes periodic at the end of a fixed term, landlords often choose not to risk unsettling a reliable tenant for a modest rent uplift.
But over time, this approach can lead to rents falling significantly below market value, making it difficult to catch up in one go without impacting tenant affordability or risking a dispute.
Under the new system, tenants will have increased protection to challenge any rent increase they believe is unreasonable, without the risk of ending up in a worse financial position. That’s why landlords need robust evidence that their proposed rent reflects the market rate.
A written valuation from a reputable local letting agent can be valuable evidence. Even if there’s a small fee involved, it’s often worth the peace of mind it brings.
Paul Shamplina, founder of Landlord Action, explains:
“We’re advising landlords to make sure they understand how to use Section 13 correctly. Once the Renters’ Rights Act comes in, it will be the only lawful way to increase rent. Get the date the increase comes into force wrong, or fail to provide evidence of a fair market rent, and you risk the notice being challenged or invalidated.”
With all tenancies becoming periodic under the Renters’ Rights Act, it’s essential to update tenancy agreements accordingly. The new standard tenancy agreement will be revised to reflect these legal changes and should include a clear clause on how notices can be served.
The tenancy agreement should include a ‘document service’ clause, which if needed the court will use to decide whether the notice has been correctly served according to the clause. If it is missing from the tenancy agreement, the party serving the document will need to find another way of proving that the recipient was aware of it. This is not easy to do so it’s important to include it in the tenancy agreement.
Each named tenant on the agreement must receive an individual copy of the notice. Include the full statutory notice, all required guidance notes, and a clear covering letter explaining the purpose.
Where, for example, a Section 13 notice is being served, each tenant should be noted on the form (Form 4) and a copy of the form and a letter explaining what the form is for should be addressed and delivered to each tenant. This action prevents any one tenant from claiming that they did not receive a notice, which could stymie any eviction process.
Digital service is becoming more widely accepted and is often more practical than recorded delivery, which can be delayed if tenants refuse to sign for letters. A combination of first-class post (with proof of postage) and digital follow-up via email or text is a sensible, belt-and-braces approach. Always request confirmation of receipt.
Once the notice is served, there’s nothing more for the landlord to do unless the tenant challenges the notice. If the tenant agrees, they simply begin paying the new rent from the next due date.
Form 4 (Landlord’s Notice proposing a new rent under an Assured Periodic Tenancy of premises situated in England) is available on the Government’s website, along with other tenancy-related forms. Always make sure you’re using the most up-to-date version.
Be meticulous when completing Form 4 of a Section 13 notice. Even small mistakes – such as incorrect dates or missing information – can invalidate the notice and delay the rent increase.
Paul Shamplina adds:
“It’s surprising how many rent increases fail simply because the notice wasn’t served properly. We regularly help landlords at Landlord Action who come to us after the tenant disputes the increase – and a mistake on the form or a missed deadline can mean starting the whole process again.”
See LandlordZONE’s article on the importance of serving statutory notices and other documents correctly for more insight.
Yes, tenants have a right of appeal to the First-tier Property Tribunal at little or no cost to themselves if they think the rent increase is above market rate. This must be before the starting date of the proposed new rent and tenants should notify their landlord that they are doing so.
The tenant will need to complete a form found on GOV.UK or by contacting a regional rent assessment panel. This must be before the starting date of the proposed new rent and tenants should notify their landlord that they are applying to challenge the rent increase.
The tribunal will review the tenant’s application and may decide to proceed with a hearing (oral hearing) or decide based on the tenant’s application alone (paper decision).
Both tenants and landlords can request an oral hearing even if the tribunal initially indicates a paper decision. Landlords must be prepared to provide evidence showing that the proposed rent is in line with comparable local properties.
The Government has promised reforms to make the Tribunal more accessible and less intimidating for tenants. Crucially, the Tribunal will no longer be able to increase the rent above the landlord’s proposed amount, and any increase will apply from the Tribunal’s decision date – not backdated.
In cases of genuine financial hardship, the Tribunal will also have the power to delay the increase by up to two months.
The Government guidance says:
“We will reform how the Tribunal works to ensure tenants feel confident in challenging poor practice and enforcing their rights. Currently, tenants face the risk that the Tribunal may increase rent beyond what the landlord initially proposed – we will end this, so tenants never pay more than what the landlord asked for. We will also end the practice of backdating rent increases – with the new rent instead applying from the date of the Tribunal determination – to ensure tenants are not unexpectedly thrust into debt. And, in cases of undue hardship, we will give the Tribunal the power to defer rent increases by up to a further 2 months.”
Our article on what’s happening with bidding wars and rent increases explains in more detail how tenants will be able to challenge excessive rises.
Landlords have understandably expressed concerns that the Section 13 process under the Renters’ Rights Act could potentially cause considerable delay to the implementation of any proposed rent increase, given that the tenant has a minimum of two months’ notice of an increase.
The rent cannot be increased until the next rent day after the tribunal decides, which means that, given the process costs the tenant little or nothing and the Tribunal could become overloaded, the whole process could take many months. So, plan ahead and allow for potential delays in receiving any increase.
Once the Renters’ Rights Act takes effect, landlords can only raise rents once per year using a Section 13 notice.
Make sure your tenancy agreement includes a ‘documents serving’ clause and follow the Section 13 process carefully. Any mistakes your make in serving the notice could invalidate it, so take extra care and make sure you serve the accompanying statutory information. If in any doubt, use a professional legal specialist such as Landlord Action, who have a team of experienced lawyers and paralegals.
It is vital that you have the evidence needed to show that you are proposing a market rate, should your tenant appeal the increase.
Paul Shamplina concludes:
“This is a technical area of law where small errors can have big consequences. If you’re unsure about how to serve a Section 13 notice or need help responding to a tenant dispute, speak to professionals like our team at Landlord Action. It’s better to get it right the first time.”
