What happens if a Landlord serves a rent increase notice when a Tenant’s home is in disrepair?

A section 13 notice is a type of notice served by a landlord on their tenant to notify them of the proposed amount they plan to increase the rent by.

Section 13 notices are used to increase the rent for periodic assured tenancies which do not have any other agreed rent increase mechanism in the contract. Currently, a landlord can serve a section 13 notice giving one month’s notice if the tenancy has a weekly or monthly period. The notice will set out the landlord’s proposed new rent. At the moment, if a tenant wants to challenge the new proposed rent in the s13 notice they can make an application to the First-tier Tribunal (“FTT”) for determination of the market rent

For a section 13 notice to be valid, it must be in the prescribed form (Form 4), it must give the correct notice period and must state both the proposed new rent and when the new rent will take effect. Presently, determining the validity of the section 13 notice falls outside the jurisdiction of the FTT – the County Court has jurisdiction to determine the validity of the notice.

In determining the applicable market rent for the property, the FTT will compare it to similar homes in the area and will set a rent that reflects the true market value. The FTT will therefore consider, amongst other things, the specific location of the property in addition to the facilities and amenities the property offers (e.g. number of bedrooms, outdoor space, ensuite etc.) and the general condition of the property. The FTT will disregard any improvements done by the tenant and any reduction in the value of the property attributable to a tenant’s failure to comply with any terms of the tenancy when determining the applicable market rent for a particular property. The FTT will consider the condition of a property, examining what a reasonable person would pay for the property in its current condition. Its determination could currently result in a market rent figure that is higher than the increase proposed by the landlord in the section 13 notice, meaning the tenant would have to pay even more than expected. However, if the property is generally in a very poor state, for instance where key amenities/facilities within the property are inaccessible (e.g. no central heating), there is an increased likelihood that the tribunal will apply a lower market rent as a result. The market rent might be less than the rent the tenant was paying before the s13 notice was served.

Poor conditions in the Property does not guarantee a reduction in the rent especially where a tenant raises disrepair issues, but the landlord alleges the repair issues and/or poor housing conditions are partially or wholly caused by the tenant’s breach of their obligations under the tenancy, or the tenant’s failure to provide access. However, as per the FTT decision in Custodian Cottages “the Tribunal disregards any improvements made by the tenant but has regard to the impact on rental value of disrepair which is not due to a failure of the tenant to comply with the terms of the tenancy” as set out in section 14(2)(b) and (c) of the Housing Act 1988. Further the Tribunal found in this case that the disrepair of bathroom fittings (broken tap and shower fittings), poor decorative condition and faulty electrics were matters which were relevant to their consideration of the appropriate rental value for the property. The FTT determined that the hypothetical rent (set at £1,200 which was the figure in the section 13 notice) should therefore be reduced by 15% to arrive at the new open market rent that they would set for this property (£1,050). In this case, as the relevant repair issues were not attributable to any breach of the tenancy by the tenant or a refusal to provide access, the FTT did consider the landlords failure to repair the disrepair items in determining the rent. It therefore seems, in practice, that if the landlord raises questions as to whether the repair issues are wholly or partially attributable to the tenant or the tenant has not permitted access, the FTT will be less likely to make any reduction in the rental value for the property due to the presence of the alleged repair issues.

The FFT process for determining market rent is quite different to a disrepair claim which falls outside the FTT jurisdiction and is dealt with by the County Court. Judges in the County Court can award compensation for disrepair and unfitness, but this is calculated in a different way and would not result in the rent being reduced. Further the County Court can make an order for specific performance, forcing the landlord to complete repairs whereas the FTT will simply determine what the applicable market rent for the property should be. The new rent will either take effect on the date specified by the section 13 notice or a later date, being no later than the Tribunal’s decision. As disrepair claims and applications to the FTT achieve different things, a tenant who believes the rent proposed by the Landlord is too high given the condition of the property should consider pursuing both avenues for redress. A tenant living in poor conditions should consider making an application to the FTT to determine the market rent, and a claim in the County Court seeking an order for specific performance and compensation in respect of the disrepair.

The Renters’ Rights Act 2025 (“RRA”) makes some changes to the process by which landlords can increase rent (which will only be via a section 13 notice or by agreement), and we now know that the relevant provisions about rent increases will come into force from 1 May 2026. One of the changes made by the RRA is that 2 months’ notice will need to be provided as opposed to the current 1-month requirement for section 13 notices. Additionally, the FTT will have jurisdiction to determine the validity of the section 13 notice, they will no longer be able to impose a market rent that exceeds the rent proposed in the notice, and the newly determined rent will only be payable from the date of the determination (rather than potentially the date of the section 13 notice which is the current position). Further, as the RRA abolishes section 21 notices, from 1 May 2026, tenants will no longer have to fear being subjected to a ‘no fault eviction’ in retaliation to them referring the section 13 notice to the FTT for determination (or to the County Court to challenge the validity of the notice itself).

The changes to the rent increase process that will be introduced by the RRA from 1 May 2026 means that tenants will have far greater protection from unfair rent hikes, there will be a single clearer route to challenge increases, and any increases will only apply from the date of determinate, which will be at least a few months after the notice is served. Therefore, landlords will need to be more diligent with both completing and serving rent increase notices, particularly as any rent review clauses in their tenancy agreements will become invalid from 1 May 2026. The RRA will make rent increases more regulated and transparent. Although both landlords and tenants will need to adapt, the results should be a fairer, more structured system for increasing rents.