With the rising cost of living taking hold of the nation, it’s no surprise that many landlords will be considering upping the cost of rent on their properties. But what does this mean for you and your barbershop? What rights do you have? To save you some time, Modern Barber has done some digging – and compiled everything you might need to know about business rent increases…
Make Sure You Read Your Contract
Do you have a fixed-term tenancy? If so, your rent can only go up if you agree to it, if you have a clause in your contract such as a rent review, or you sign a new one. Plus, if you pay your rent on a weekly or monthly basis, then legally your landlord must give one months’ notice before increasing the rent.
What Are Your Options?
When your landlord gives you notice of a rent increase for your business, the reasons they give should be transparent and rational. If you have questions regarding the increase, you can ask them how they calculated it. You should also ensure that their calculation is based on the current/ permitted use of the property, and not what they predict they could achieve from a different use. (e.g, a barbershop would fall under Class E – Commercial, Business and Service. A B&B or guest house would fall under Class C. Changing use class can be a lengthy process, so if your landlord is basing their calculation off of a new use, their justification holds no weight).
Following this, you have various options. Firstly, you can agree to the rent increase – but always make sure you get the new value in writing. If you pay the higher rent, even just once, that counts as you accepting the new fee. It’s worth noting, however, that you don’t have to agree with the new, higher price – you can negotiate, or appeal it in a tribunal.
If you decide to follow the path of negotiation, try to gather any evidence that might support your counter offer. For example, have you made any improvements to the property that might have increased its value? Has your landlord fulfilled all of their duties during your tenancy? Remember, most landlords want a tenant who is successful and likely to stay in the property for a long time, so you might also benefit from highlighting the positive aspects of your tenancy, such always paying your rent on time and your impact on the community.
As part of this process, you could also negotiate a stepped increase – which is when the rent increase is implemented gradually over time. The benefit of this is that it can allow you to plan for, and adjust to, the increase.
If you opt to appeal the rent increase in a tribunal, the process is free. However, make sure you don’t stop paying your current rent, otherwise you’ll get into rent arrears. If this happens, your landlord can try to evict you if they follow the correct process.
If you can’t agree on a new price, you might be issued with something called a Section 21 Notice and asked to leave. If this happens, you don’t need to go immediately. In fact, you normally have a couple of months, which gives you some time to look for support – your local council and Citizens Advice are both good options.
So, while business rent increases can be challenging, the most important thing to remember is to weigh up your options, rather than rushing into anything – and if in doubt, seek additional help.
Discover how one barber transformed his business to provide mental health support.