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Last edited 06 Jun 2018
Rent is the payment made by a lessee to a lessor for the temporary use of land, a building, a flat, and so on. It represents an agreement between the two parties, and the payment is usually made periodically during the time the land, etc., is being used or occupied.
The person/party who is renting is often referred to as the 'tenant', whilst the lessor, who may be the owner, is often referred to as the 'landlord'. Almost any kind of real estate can be rented, from a driveway to park a car, to a house, an office building, a shop, a tract of land for agricultural purposes, and so on.
The rent should be agreed prior to the tenancy or period of use beginning. Particularly with regards to rent between a tenant and landlord, payments should not begin until the day the tenant moves into the property.
- Details of what is being rented and how long for.
- Details of the tenant and landlord.
- The amount of rent that should be paid.
- When the rent payment is due (i.e. weekly, monthly).
- The specific day on which rent should be paid.
- How the rent should be paid (i.e. standing order, direct debit, cash, etc.).
- What the rent covers (i.e. council tax, utility bills, etc.).
- Who is responsible for repairs, maintenance, etc.
- What the tenant is permitted to do.
Periodically, landlords will review rent as a means of adjusting the amount payable by the tenant. Virtually all commercial leases contain a provision enabling this. For more information, see Rent review.
The following obligations apply to any tenancy:
- The landlord must get the tenant’s permission before the rent can be increased by more than previously agreed.
- The rent increase must be fair, realistic, and not out of keeping with average local rents.
- The procedure for increasing rent set out in the tenancy agreement must be adhered to.
- Without such a procedure in the tenancy agreement, the rent can only be increased at the end of the fixed term.
- If the tenancy is weekly or monthly the landlord must give a minimum of one month’s notice for rent increases. If the tenancy is yearly then they must give 6 months’ notice.
- Landlords can pursue eviction procedures if a tenant falls behind with rent payments.
Deposits are usually paid by new tenants to landlords to secure the property and provide security in the event of default, or damage to the property. If a home is rented on an assured shorthold tenancy (AST) that started after 6 April 2007, the landlord must put the deposit in a government-backed tenancy deposit scheme (TDP).
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