Senior partner and statutory tenancies expert Russell Conway protects vulnerable regulated tenant from a 400% rent increase – a common tactic used by landlords to rid themselves of protected tenants.

Regulated tenancies

The client in question had a regulated tenancy under the Rent Act 1977, which entitled him to the following protections:

• Regulated tenants pay a ‘fair rent’ which is often substantially lower than market value;
• Regulated tenants can only be evicted by court order, and a legal reason for eviction must be proved (such as rent arrears).

Due to the one succession rule, the number of regulated tenancies in the UK is dwindling; there are less than 75,000 remaining. Regulated tenants often live in areas with high property values, paying rents that are substantially below the market value. This can make them targets for landlords and developers who may wish to evict rent act tenants to maximise profit on a property, or to vacate a building to develop it.

Background to the case

Such was the case in this situation. The client had resided happily in his flat since the 1960s, until his building was purchased by a company who were keen to undertake extensive works on the building.

The initial communications from the landlord were friendly. The landlord suggested the client may be happier staying in a hotel for the duration of the building work. They also offered to rehouse the client in a better flat in a building nearby.

However, the elderly client was in poor health and wished to stay in his home, as was his right. At this point, the landlord adopted a less amicable approach; they applied to the Valuation Office Agency (VOA) for a new fair rent to be registered.

What registering a new fair rent means

Registering a new fair rent is the process by which landlords of regulated tenancies can increase the rent on their property. Unlike a standard tenancy, landlords with regulated tenancies are restricted in their ability to change the value of rent. They can only increase rents by applying to the VOA for a new fair rent to be registered, and they can only do this once every two years.

A landlord can suggest what they believe the rent should be, and both parties can present evidence as to why the rent should or should not be increased. This evidence is then considered by a rent officer, who will often inspect the property in person before making a decision. Although applications often result in rent being increased, there have been cases where applications have backfired on landlords and rent officers have lowered the rent instead.

Suggested rent increase

In this situation, the landlord suggested a rent increase of 400%. This would have put the rent for the client’s flat on par with many high-spec modern flats in the area available on the open market. These open market properties suffered none of the defaults of the client’s property, which had not been well-maintained by the previous landlord.

By this time, the landlord’s planned building works were also underway, meaning the flat was beset by dust and noise, which would further reduce its market value. Russell Conway made representations to this effect on the client’s behalf.

Outcome

Following Mr Conway’s representations, the VOA registered a fair rent at a fraction of the increase which had been suggested by the landlord. This will ensure that the client is able to afford his rent payments whilst negotiations are ongoing in relation to the client’s future in the building.

‘The rent that we have achieved here is extremely good’ says Russell Conway. ‘As a result, the client will continue to be able to afford to live in his home of 50 years, which is a great result.’