RPI clause in Tenancy Agreement problem

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  • RPI clause in Tenancy Agreement problem

    All,

    I have the following clause in my AST Tenancy Agreement;

    'If this tenanacy is continued or run on as a periodic tenancy then the Rent will increase each year from the first Rent Due Date more than 364 days after the commencement of the Term, by the amount stated for the annual increase in the Index of Retail Prices (All Items) as quoted for the month two months prior to the month of the renewal'

    I'm a couple of months away from the end of my AST term when the tenancy will then become periodic.

    The landlady runs the property herself without the use of an Agent. To be honest I doubt very much that she will bother imposing any sort of rent increase at the present time.

    I am however worried that I could be happily toodling along for years in her property with the current rent staying as it is and then when I want to leave in say 5 years time she will turn up and present me with a back bill for rent owed covering the last 5 years of RPI rent increases

    What is the likelihood of this happening and do I have any legal leg to stand on if it does?

    What action should I take going foward? The only choices I can think of are:

    1. Insist on a new AST contract being drawn up at end of the first one. This has the disadvantgae of putting me on her radar and thus generating a rent increase I'd rather avoid.

    2. Ignore the whole thing and hope she doesn't present me with a nasty bill at the end of my Periodic tenancy.

    I wish I had negotiated out that clause now before I signed the contract !

    Bumblebee

  • #2
    There are others better able than myself to comment on drafting issues such as this, but my thoughts are:

    a) it is clearly not drafted by an expert
    b) if it has effect to increase the rent, it will have that effect only once, because there can only be one "first Rent Due Date more than 364 days after the commencement of the Term"

    My guess is that a court would give it the meaning I describe under (b) i.e. one rent increase after the end of the first year, but no more. If this is the case then if you do not pay the increase you would indeed build up arrears.

    Only you can judge, but I wonder whether it would be worthwhile contacting the landlady to say that you are happy to remain provided the rent is not increased and ask her to confirm this to you.

    Comment


    • #3
      Ok, you wish you not signed contract, but you did, and you don't need to stay after the fixed term has ended.
      The best way as also is to be upfront and contact your LL 2 months before the end of the year and say if you believe it, that the P is not worth the increase and try and come to an agreement by signing a new contract at the same rate or a little higher and with or without that clause.
      Most LL would not want the hassle and cost of finding a new T, so unless you are paying well below market rate, I would guess they would agree.

      But at least you and your LL know what going on, which normally leads to a much better relationship.

      Hope this helps
      Disclaimer: What I say is either right or wrong. It may be advisable to check what I say with a solicitor. If he says I am right then I am right, unless he is wrong in which case I am wrong; but if he says I am wrong then I am wrong, unless he is wrong in which case I am right

      Comment


      • #4
        Note: that clause's presence may prevent L from using s.13 rights.
        JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
        1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
        2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
        3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
        4. *- Contact info: click on my name (blue-highlight link).

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